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

Accounting Policies of Jaysynth Dyestuff (India) Ltd. Company

Mar 31, 2015

A) Basis of Preparation :

i) These Financial Statements have been prepared in accordance with Generally Accepted Accounting Principles in India under the historical cost convention on accrual basis. Pursuant to Section 133 of the Companies Act ,2013 read with Rule 7 of Companies (Accounts) Rules,2014, till the standards of accounting or any addendum thereto are prescribed by Central government in consultation and recommendation of National Financial Reporting Authority, the existing Accounting Standards notified under The Companies Act, 1956 shall continue to apply. Consequently, these financial statements have been prepared to comply in all material aspects with Accounting standards notified under section 211 (3C) of Companies Act, 1956 (Companies (Accounting Standards) Rules, 2006, as amended ) and other relevant provisions of the Companies Act 2013.

ii) Use of Estimates : The preparation of the financial statement in conformity with Generally Accepted Accounting Principles (GAAP) requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of financial statements and reported amounts of revenue and expenses during the reporting period. Differences between actual results and estimates are recognised in the period in which the results are known or materialised.

B) Fixed assets :

i) Tangible assets

Tangible Assets are stated at cost net of recoverable taxes, less accumulated depreciation and impairment losses,if any. The cost of tangible assets comprises its purchase price and any cost directly attributable to bringing the asset to its working condition.

Subsequent expenditure related to an item of tangible asset are added to its book value only if they increase the future benefits from the existing asset beyond its previously assessed standard of performance.

Loss arising from the retirement of and gain or losses arising from disposal of fixed assets which are carried at cost are recognised in the Statement of Profit and Loss.

The cost of assets not ready for use as at the Balance sheet date are disclosed under Capital Work-In-Progress.

ii) Intangible Assets

Intangible Assets are stated at acquisition cost net of recoverable taxes, less accumulated amortisation and impairment losses, if any. The cost of intangible assets comprises its purchase price and any cost directly attributable to bringing the asset to its working condition. Intangible assets are amortized on straight line basis over their estimated useful life.

C) Depreciation :

i) Depreciation on Factory building , Plant & Machinery, Electrical Installation, Equipment, Vehical and Computer is provided on a straight line method, over its useful life.

ii) Effective from 1st April,2014, the company depreciates its fixed assets over the useful life in the manner prescribed in Schedule II of the Companies Act, 2014 as against the earlier practice of depreciating at the rate prescribed in Schedule XIV of the Companies Act, 1956.

iii) Cost of Software capitalised is amortised over a period of three years.

iv) Depreciation on addition of assets or on sales/discardment of assets, is calculated pro rata from the month of such addition or upto the month of such sale/ discardment, as the case may be.

D) impairment of assets :

The Company assesses at each Balance Sheet date whether there is any indication that an asset, including intangible, may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of 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 recognised in the Profit and Loss Account. There is no impairment loss on fixed assets on the basis of review carried out by the management in accordance with Accounting Standard 28 issued by the Institute of Chartered Accountants of India.

E) investment :

i) Current Investments are valued at lower of cost or market value.

ii) Long term Investments are valued at cost. Appropriate provision has been made in the accounts for diminution in the value of long term investments in accordance with AS-13 issued by the Institute of Chartered Accountants of India.

F) inventories :

Inventories are valued after providing for obsolescence as follows:

i) Stock of Raw materials, packing materials and stores & fuel are valued at lower of cost or net realisable value. Cost Formulae used is first in first out.

ii) Semi-Finished Goods are valued at lower of cost or net realisable value. Cost for the purpose includes material cost and related overheads.

iii) Stock of manufactured and traded finished goods are valued at lower of cost or net realisable value. Cost for the purpose includes material cost, related overheads and excise duty paid/payable. Excise duty on manufactured finished goods forming part of the inventory is included in cost of finished goods.Goods In transit are stated at cost.

iv) Due allowance is estimated and made for defective and obsolete items, wherever necessary, based on the past experience of the company.

G) Receivab!es and !oans & advances :

Receivables and loans & advances are stated after making adequate provision for bad debts and doubtful debts.

H) Revenue Recognition :

Revenue is recognized only when it can be reliably measured and it is reasonable to expect ultimate collection.

i) Sa!e of goods :

Revenue is recognized when the significant risks and rewards of ownership of goods have passed to the buyer which generally coincides with delivery. Sales for the year include sale value of goods, excise duties and other recoveries, such as insurance, transport and packing charges excluding VAT/CST.

Export Incentives under the "Duty Entitlement Pass Book Scheme","Duty Drawback Scheme", etc. are accounted for as and when admitted by the appropriate authorities/ in the year of export.

ii) interest & Dividend income :

Interest Income is recognized on a time proportion basis taking into account the amount outstanding & rate applicable. Dividend Income is recognised in the year in which the right to receive is established.

Overdue interest from debtors, insurance claim , etc have been considered to the extent the amount is accepted/ ascertainable by the parties. i) Excise duty :

Excise duty is accounted on the basis of both, payment made in respect of goods cleared and also provisions made for goods lying in bonded warehouses.

J) Research and deve!opment :

Revenue expenses are charged to Profit & Loss Account in the year in which it is incurred while the capital expenditure is shown as addition to Fixed Assets.

K) Emp!oyee benefits :

i) Short-term employee benefits are recognized as an expense at the undiscounted amount in the Profit & Loss A/c. in the year in which the related services are rendered.

ii) Contribution to Provident Funds / Employee Pension Scheme are accounted on accrual basis.

iii) Provision for gratuity liability has been made in the accounts based on actuarial valuation as at the year end which

is in accordance with Accounting Standard 15.

iv) Company's liabilities towards compensated absences to employees are determined on the basis of valuations as at balance sheet date, carried out by an independent actuary using Projected Unit Credit Method. Actuarial gains & losses comprise experience adjustments and the effect of changes in actuarial assumptions are recognised immediately in the Profit and Loss Account.

L) Foreign currency transactions :

i) Transaction denominated in foreign currency are converted into Indian rupees at the exchange rate prevailing on the date of transaction.

ii) Gains or losses on settlement of the transactions are recognised in the Profit & Loss A/c.

iii) Monetary assets & liabilities in foreign currency at the year end are restated by applying the closing rate and the difference arising out of such conversion is recognised in Profit & Loss A/c.

iv) In case of items which are covered by forward exchange contracts, the difference between the year end rate and the rate on the date of the contract is recognised as exchange difference.

M) Provisions, contingent !iabi!ities and contingent assets :

i) A provision is recognised when the company has a present obligation as a result of past events, for which it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made. Provisions are reviewed regularly and are adjusted where necessary to reflect the current best estimate of the obligation. When the Company expects a provision will be reimbursed, the reimbursement is recognised as a separate asset only when reimbursement is virtually certain.

ii) A disclosure for contingent liabilities is made where there is a possible obligation arising from past events, the existence of which will be confirmed only by occurrence or non occurrence of one or more uncertain future events not wholly within the control of the company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made.

iii) Contingent assets are neither recognised nor disclosed in the financial statements.

N) Taxation :

Income Tax expenses comprises current and deferred tax charge or credit. Provision for current tax is made on the basis of the assessable income at the tax rate applicable to the relevant assessment year. The deferred tax asset and deferred tax liability is calculated by applying tax rate and tax laws that have been enacted or substantively enacted by the balance sheet date. Deferred Tax Asset arising mainly on account of brought forward losses under tax laws are recognised, only if their is a virtual certainty of its realisation, supported by convincing evidence. Deferred tax asset on account of other timing differences are recognised only to the extent there is a reasonable certainty of its realisation. At each balance sheet date, the carrying amount of deferred tax asset are reviewed to reassure realisation. Minimum alternate tax credit is recognised as an asset only when and to that extent there is convincing evidence the company will pay normal tax during the specified period.

O) Earnings per share :

The basic and diluted earnings per share is computed by dividing the net profit after taxes attributable to equity shareholders for the year, by the weighted average number of equity shares outstanding during the year.


Mar 31, 2014

A) Method of accounting :

i) The Financial Statement are prepared under the historical cost convention or on the basis of going concern and as per applicable Indian Accounting Standards. The Company follows the mercantile system of accounting and recognises income and expenditure on accrual basis and for this purpose certain items of income such as insurance claims, overdue interest from debtors etc., have been considered to the extent the amount is ascertainable / accepted by the parties.

ii) Use of Estimates : The preparation of the financial statement in conformity with Generally Accepted Accounting Principles (GAAP) requires the management to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to contingent liabilities as at the date of the financial statements and reported amounts of income and expenses during the period. Examples of such estimates include provision of doubtful debts, future obligations under employee''s retirement''s benefits plans, income taxes and useful lives of fixed assets and intangible assets.

Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as the management becomes aware of changes in circumstances surroundings the estimates. Any revision to accounting estimates is recognised prospectively in current and future periods.

iii) Inflation : Assets and Liabilities are recorded at historic cost as a going concern basis. These costs are not adjusted to reflect the changes in the purchasing power of money.

B) Fixed assets (Tangible assets) :

Fixed assets are stated at cost less depreciation/ amortization and impairment losses, if any. Cost includes expenses incidental to the installation of assets and attributable borrowing costs, if any.

C) Depreciation :

i) The Company has provided depreciation on straight line method at the rates prescribed under schedule XIV of the Companies (Amendment) Act, 1956.

ii) Depreciation has been provided on fixed assets net of cenvat credit taken during the year.

D) Impairment of assets :

The Company assesses at each Balance Sheet date whether there is any indication that an asset, including intangible, may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of 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 recognised in the Profit and Loss Account. There is no impairment loss on fixed assets on the basis of review carried out by the management in accordance with Accounting Standard 28 issued by the Institute of Chartered Accountants of India.

E) Investment :

i) Current Investments are valued at lower of cost or market value.

ii) Long term Investments are valued at cost.

iii) Appropriate provision has been made in the accounts for diminution in the value of long term investments in accordance with AS-13 issued by the Institute of Chartered Accountants of India.

F) Inventories :

Inventories are valued after providing for obsolescence as follows:

i) Stock of Raw materials, packing materials and stores & fuel are valued at lower of cost or net realisable value. Cost Formulae used are first in first out.

ii) Semi-Finished Goods are valued at lower of cost or net realisable value. Cost for the purpose includes material cost and related overheads.

iii) Stock of manufactured and traded finished goods are valued at lower of cost or net realisable value. Cost for the purpose includes material cost, related overheads and excise duty paid/payable. Excise duty on manufactured finished goods forming part of the inventory is included in cost of finished goods as required under AS -2 (Revised) issued by the Institute of Chartered Accountants of India. Goods In transit are stated at cost.

G) Receivables and loans & advances :

Receivables and loans & advances are stated after making adequate provision for bad debts and doubtful debts.

H) Revenue Recognition :

Revenue is recognized only when it can be reliably measured and it is reasonable to expect ultimate collection.

i) Sale of goods :

Revenue is recognized when the significant risks and rewards of ownership of goods have passed to the buyer which generally coincides with delivery. Sales for the year include sale value of goods, excise duties and other recoveries, such as insurance, transport and packing charges excluding VAT/CST.

ii) Interest & Dividend Income :

Interest Income is recognized on a time proportion basis taking into account the amount outstanding & rate applicable. Dividend Income is recognised in the year in which the right to receive is established.

I) Excise duty :

Excise duty is accounted on the basis of both, payment made in respect of goods cleared and also provisions made for goods lying in bonded warehouses.

J) Research and development :

Revenue expenses are charged to Profit & Loss Account in the year in which it is incurred while the capital expenditure is shown as addition to Fixed Assets.

K) Employee benefits :

i) Short-term employee benefits are recognized as an expense at the undiscounted amount in the Profit & Loss Account. in the year in which the related services are rendered.

ii) Contribution to Provident Funds / Employee Pension Scheme are accounted on accrual basis.

iii) Provision for gratuity liability has been made in the accounts based on actuarial valuation as at the year end which

is in accordance with Accounting Standard No. 15 issued by the Institute of Chartered Accountants of India.

iv) Company''s liabilities towards compensated absences to employees are determined on the basis of valuations as at balance sheet date, carried out by an independent actuary using Projected Unit Credit Method. Actuarial gains & losses comprise experience adjustments and the effect of changes in actuarial assumptions are recognised immediately in the Profit and Loss Account.

L) Foreign currency transactions :

i) Transaction denominated in foreign currency are converted into Indian rupees at the exchange rate prevailing on the date of transaction.

ii) Gains or losses on settlement of the transactions are recognised in the Profit & Loss A/c.

iii) Monetary assets & liabilities in foreign currency at the year end are restated by applying the closing rate and the

difference arising out of such conversion is recognised in Profit & Loss A/c.

iv) In case of items which are covered by forward exchange contracts, the difference between the year end rate and the rate on the date of the contract is recognised as exchange difference.

M) Provisions, contingent liabilities and contingent assets :

i) A provision is recognised when the company has a present obligation as a result of past events, for which it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made. Provisions are reviewed regularly and are adjusted where necessary to reflect the current best estimate of the obligation. When the Company expects a provision will be reimbursed, the reimbursement is recognised as a separate asset only when reimbursement is virtually certain.

ii) A disclosure for contingent liabilities is made where there is a possible obligation or a present obligation that may probably not require an outflow of resources. When there is a possibility of a present obligation where the likelihood of outflow of resources is remote, no provision or disclosure is made.

iii) Contingent liabilities are disclosed in the notes.

iv) Contingent assets are neither recognised nor disclosed in the financial statements.

N) Taxation :

Income Tax expenses comprises current and deferred tax charge or credit. Provision for current tax is made on the basis of the assessable income at the tax rate applicable to the relevant assessment year. The deferred tax asset and deferred tax liability is calculated by applying tax rate and tax laws that have been enacted or substantively enacted by the balance sheet date. Deferred Tax Asset arising mainly on account of brought forward losses under tax loss are recognised, only if their is a virtual certainty of its realisation, supported by convincing evidence. Deferred tax asset on account of other timing differences are recognised only to the extent there is a reasonable certainty of its realisation. At each balance sheet date, the carrying amount of deferred tax asset are reviewed to reassure realisation. Minimum alternate tax credit is recognised as an asset only when and to that extent there is convincing evidence the company will pay normal tax during the specified period.

O) Earnings per share :

The basic and diluted earnings per share is computed by dividing the net profit after taxes attributable to equity shareholders for the year, by the weighted average number of equity shares outstanding during the year.

B) Rights, Preferences and restrictions attached to shares

The company has one class of equity shares having a par value of Rs. 1/- per share. Each shareholder is eligible for one vote per share held. The Dividend when proposed by the Board of Directors is subject to the approval of the shareholders in the Annual General Meeting except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the assets of the company remaining after distribution of all preferential amounts in proportion of their shareholding.

2.1 The Company is in the process of identifying suppliers falling under the Micro, Small and Medium Enterprises Development Act, 2006. However, no confirmation as regards to the status has been received by the Company.

In the absence of information as regard to the status/ classification of the relevant enterprises into Micro, Small and Medium Enterprises, information as required under Notification No. G.S.R. 719 (E) dated 16.11.2007 issued by the Department of Company Affairs in respect of the total amount payable and amount of interest thereon paid during the year and payable at the end of the year to the Sundry Creditors could not be disclosed.


Mar 31, 2012

A) Method of accounting :

i) The Financial Statement are prepared under the historical cost convention or on the basis of going concern and as per applicable Indian Accounting Standards. The Company follows the mercantile system of accounting and recognises income and expenditure on accrual basis and for this purpose certain items of income such as insurance claims, overdue interest from debtors etc., have been considered to the extent the amount is ascertainable / accepted by the parties.

ii) Use of Estimates : The preparation of the financial statement in conformity with Generally Accepted Accounting Principles (GAAP) requires the management to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to contingent liabilities as at the date of the financial statements and reported amounts of income and expenses during the period. Examples of such estimates include provision of doubtful debts, future obligations under employee's retirement's benefits plans, income taxes and useful lives of fixed assets and intangible assets.

Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as the management becomes aware of changes in circumstances surroundings the estimates. Any revision to accounting estimates is recognised prospectively in current and future periods.

iii) Inflation : Assets and Liabilities are recorded at historic cost as a going concern basis. These costs are not adjusted to reflect the changes in the purchasing power of money.

B) Fixed assets :

Fixed assets are stated at cost less depreciation/ amortization and impairment losses, if any. Cost includes expenses incidental to the installation of assets and attributable borrowing costs.

C) Depreciation :

i) The Company has provided depreciation on straight line method at the rates prescribed under schedule XIV of the Companies (Amendment) Act, 1956.

ii) Depreciation has been provided on fixed assets net of cenvat credit taken during the year.

D) Impairment of assets :

The Company assesses at each Balance Sheet date whether there is any indication that an asset, including intangible, may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of 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 recognised in the Profit and Loss Account. There is no impairment loss on fixed assets on the basis of review carried out by the management in accordance with Accounting Standard 28 issued by the Institute of Chartered Accountants of India.

E) Investment :

i) Long term Investments are valued at cost.

ii) Current Investments are valued at lower of cost or market value.

iii) Appropriate provision has been made in the accounts for diminution in the value of investments in accordance with AS-13 issued by the Institute of Chartered Accountants of India.

F) Inventories :

i) Stock of Raw materials, packing materials and stores & fuel are valued at lower of cost or net realisable value. Cost Formulae used are first in first out, average cost or specific identification as applicable.

ii) Semi-Finished Goods are valued at lower of cost or net realisable value. Cost for the purpose includes material cost and related overheads.

iii) Stock of manufactured and traded finished goods are valued at lower of cost or net realisable value. Cost for the purpose includes material cost, related overheads and excise duty paid /payable. Excise duty on manufactured finished goods forming part of the inventory is included in cost of finished goods as required under AS -2 (Revised) issued by the Institute of Chartered Accountants of India

G) Receivables and loans & advances :

Receivables and loans & advances are stated after making adequate provision for doubtful debts and advances.

H) Recognition of income and expenditure :

i) Revenue is recognized when the significant risks and rewards of ownership of goods have passed to the buyer which generally coincides with delivery. Sales for the year include sale value of goods, excise duties and other recoveries, such as insurance, transport and packing charges excluding VAT/CST.

ii) In respect of exports made under Duty Entitlement Pass Book Scheme (DEPB), in terms of Para 7.25 of the exim policy, and the goods are covered by standard input output norms notified by the Ministry of commerce in hand book procedure. DEPB are issued to the company giving duty credit to be utilised for the purpose of payment of custom duty at the time of Imports. Duty credit so received and receivable on the basis of exports of the current year has been included in the export incentives.

iii) Revenue is recognised and expenditure is accounted for on their accrual.

iv) The cenvat credit is accounted by crediting the amount to cost of purchases on receipt of goods and is used on dispatch by debiting excise duty account.

v) Dividend Income is recognised in the year in which the right to receive dividend is established.

vi) Income from interest on deposits,loan and interest bearing securities is recognized on the time proportion basis.

I) Excise duty :

Excise duty is accounted on the basis of both, payment made in respect of goods cleared and also provisions made for goods lying in bonded warehouses.

J) Research and development :

Revenue expenses are charged to Profit & Loss Account in the year in which it is incurred while the capital expenditure is shown as addition to Fixed Assets.

K) Employee benefits :

i) Short-term employee benefits are recognized as an expense at the undiscounted amount in the Profit & Loss A/c. in the year in which the related services are rendered.

ii) Contribution to Provident Funds / Employee Pension Scheme are accounted on accrual basis.

iii) Provision for gratuity liability has been made in the accounts based on actuarial valuation as at the year end which is in accordance with Accounting Standard No. 15 issued by the Institute of Chartered Accountants of India.

iv) Company's liabilities towards compensated absences to employees are determined on the basis of valuations as at balance sheet date, carried out by an independent actuary using Projected Unit Credit Method. Actuarial gains & losses comprise experience adjustments and the effect of changes in actuarial assumptions are recognised immediately in the Profit and Loss Account.

L) Foreign currency transactions :

i) Transaction denominated in foreign currency are converted into Indian rupees at the exchange rate prevailing on the date of transaction.

ii) Gains or losses on settlement of the transactions are recognised in the Profit & Loss A/c.

iii) Monetary assets & liabilities in foreign currency at the year end are restated by applying the closing rate and the difference arising out of such conversion is recognised in Profit & Loss A/c.

iv) In case of items which are covered by forward exchange contracts, the difference between the year end rate and the rate on the date of the contract is recognised as exchange difference.

M) Provisions and contingent liabilities :

i) A provision is recognised when the company has a present obligation as a result of past events, for which it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made. Provisions are reviewed regularly and are adjusted where necessary to reflect the current best estimate of the obligation. When the Company expects a provision to be reimbursed, the reimbursement is recognised as a separate asset only when reimbursement is virtually certain.

ii) A disclosure for contingent liabilities is made where there is a possible obligation or a present obligation that may probably not require an outflow of resources. When there is a possibility of a present obligation where the likelihood of outflow of resources is remote, no provision or disclosure is made.

iii) Contingent liabilities are disclosed in the notes.

N) Taxation :

Income Tax expenses comprises current and deferred tax charge or credit. Provision for current tax is made on the basis of the assessable income at the tax rate applicable to the relevant assessment year. The deferred tax asset and deferred tax liability is calculated by applying tax rate and tax laws that have been enacted or substantively enacted by the balance sheet date. Deferred Tax Asset arising mainly on account of brought forward losses under tax loss are recognised, only if their is a virtual certainty of its realisation, supported by convincing evidence. Deferred tax asset on account of other timing differences are recognised only to the extent there is a reasonable certainty of its realisation. At each balance sheet date, the carrying amount of deferred tax asset are reviewed to reassure realisation. Minimum alternate tax credit is recognised as an asset only when and to that extent there is convincing evidence the company will pay normal tax during the specified period.

O) Earnings per share :

The basic and diluted earnings per share is computed by dividing the net profit after tax attributable to equity shareholders for the year, by the weighted average number of equity shares outstanding during the year.


Mar 31, 2011

A) Method of accounting :

i) The Financial Statements are prepared under the historical cost convention or on the basis of going concern and as per applicable Indian Accounting Standards. The Company follows the mercantile system of accounting and recognises income and expenditure on accrual basis and for this purpose certain items of income such as insurance claims, overdue interest from debtors etc., have been considered to the extent the amount is ascertainable / accepted by the parties.

ii) Use of Estimates : The preparation of the financial statement in conformity with Generally Accepted Accounting Principles (GAAP) requires the management to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to contingent liabilities as at the date of the financial statements and reported amounts of income and expenses during the period. Examples of such estimates include provision of doubtful debts, future obligations under employee's retirement's benefits plans, income taxes and useful lives of fixed assets and intangible assets.

Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as the management becomes aware of changes in circumstances surroundings the estimates. Any revision to accounting estimates is recognised prospectively in current and future periods.

iii) Inflation : Assets and Liabilities are recorded at historic cost as a going concern basis. These costs are not adjusted to reflect the changes in the purchasing power of money.

B) Fixed assets :

Fixed assets are stated at cost less depreciation/ amortization and impairment losses, if any. Cost includes expenses incidental to the installation of assets and attributable borrowing costs.

C) Depreciation :

i) The Company has provided depreciation on straight line method at the rates prescribed under schedule XIV of the Companies (Amendment) Act, 1956.

ii) Depreciation has been provided on fixed assets net of cenvat credit taken during the year.

D) Impairment of assets :

The Company assesses at each Balance Sheet date whether there is any indication that an asset, including intangible, may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of 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 recognised in the Profit and Loss Account. There is no impairment loss on fixed assets on the basis of review carried out by the management in accordance with Accounting Standard 28 issued by the Institute of Chartered Accountants of India.

E) Investment :

i) Long term Investments are valued at cost.

ii) Current Investments are valued at lower of cost or market value.

iii) Appropriate provision has been made in the accounts for diminution in the value of investments in accordance with AS-13 issued by the Institute of Chartered Accountants of India.

F) Inventories :

i) Stock of Raw materials, packing materials and stores & fuel are valued at lower of cost or net realisable value. Cost Formulae used are first in first out, average cost or specific identification as applicable.

ii) Semi-Finished Goods are valued at lower of cost or net realisable value. Cost for the purpose includes material cost and related overheads.

iii) Stock of manufactured and traded finished goods are valued at lower of cost or net realisable value. Cost for the purpose includes material cost, related overheads and excise duty paid /payable. Excise duty on manufactured finished goods forming part of the inventory is included in cost of finished goods as required under AS -2 (Revised) issued by the Institute of Chartered Accountants of India.

G) Sundry debtors and loans & advances :

Sundry debtors and loans & advances are stated after making adequate provision for doubtful debts and advances.

H) Recognition of income and expenditure :

i) Revenue is recognized when the significant risks and rewards of ownership of goods have passed to the buyer which generally coincides with delivery. Sales turnover for the year include sale value of goods, excise duties and other recoveries, such as insurance, transport and packing charges excluding VAT/CST.

ii) In respect of exports made under Duty Entitlement Pass Book Scheme (DEPB), in terms of Para 7.25 of the exim policy, and the goods are covered by standard input output norms notified by the Ministry of commerce in hand book procedure. DEPB are issued to the company giving duty credit to be utilised for the purpose of payment of custom duty at the time of Imports. Duty credit so received and receivable on the basis of exports of the current year has been included in the export incentives.

iii) Revenue is recognised and expenditure is accounted for on their accrual.

iv) The cenvat credit is accounted by crediting the amount to cost of purchases on receipt of goods and is used on dispatch by debiting excise duty account.

v) Dividend Income is recognised in the year in which the right to receive dividend is established.

vi) Income from interest on deposits , loan and interest bearing securities is recognized on the time proportion basis.

I) Excise duty :

Excise duties recovered are included in the sale of products. Excise duty paid on dispatches are shown separately as an item of Manufacturing Expenses.

J) Research and development :

Revenue expenses are charged to Profit & Loss Account in the year in which it is incurred while the capital expenditure is shown as addition to Fixed Assets.

K) Employee benefits :

i) Short-term employee benefits are recognized as an expense at the undiscounted amount in the Profit & Loss A/c. in the year in which the related services are rendered.

ii) Contribution to Provident Funds / Employee Pension Scheme are accounted on accrual basis.

iii) Provision for gratuity liability has been made in the accounts based on actuarial valuation as at the year end which is in accordance with Accounting Standard No. 15 issued by the Institute of Chartered Accountants of India.

iv) Company's liabilities towards compensated absences to employees are determined on the basis of valuations as at balance sheet date, carried out by an independent actuary using Projected Unit Credit Method. Actuarial gains & losses comprise experience adjustments and the effect of changes in actuarial assumptions are recognised immediately in the Profit and Loss Account.

L) Foreign currency transactions :

i) Transaction denominated in foreign currency are converted into Indian rupees at the exchange rate prevailing on the date of transaction.

ii) Gains or losses on settlement of the transactions are recognised in the Profit & Loss A/c.

iii) Monetary assets & liabilities in foreign currency at the year end are restated by applying the closing rate and the difference arising out of such conversion is recognised in Profit & Loss A/c.

iv) In case of items which are covered by forward exchange contracts, the difference between the year end rate and the rate on the date of the contract is recognised as exchange difference.

M) Provisions and contingent liabilities :

i) A provision is recognised when the company has a present obligation as a result of past events, for which it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made. Provisions are reviewed regularly and are adjusted where necessary to reflect the current best estimate of the obligation. When the Company expects a provision to be reimbursed, the reimbursement is recognised as a separate asset only when reimbursement is virtually certain.

ii) A disclosure for contingent liabilities is made where there is a possible obligation or a present obligation that may probably not require an outflow of resources. When there is a possiblity of a present obligation where the likelyhood of outflow of resources is remote, no provision or disclosure is made.

iii) Contingent liabilities are disclosed in Notes to Accounts.

N) Taxation :

i) Current Tax is the amount of the tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961.

ii) Deferred Tax is recognised on timing differences between the income accounted in financial statements and the taxable income for the year, quantified using the tax rates and laws enacted or substantively enacted as on the balance sheet date.

iii) Deferred Tax Assets in respect of unabsorbed depreciation and carry forward of losses are recognised and carried forward to the extent there is virtual certainty that sufficient future taxable income will be available against which such deferred tax asset can be realised. Other deferred Tax Assets are recognised and carried forward to the extent there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax asset can be realised.

iv) The carrying amount of deferred tax assets are reviewed at each Balance Sheet date and written down or written- up to reflect the amount that is reasonable/virtually certain (as the case may be) to be realised.

O) Earnings per share :

The basic and diluted earnings per share is computed by dividing the net profit after tax attributable to equity shareholders for the year, by the weighted average number of equity shares outstanding during the year.


Mar 31, 2010

A) Method of accounting :

i) The Financial Statement are prepared under the historical cost convention, on the basis of or going concern and as per applicable Indian Accounting Standards. The Company follows the mercantile system of accounting and recognises income and expenditure on accrual basis and for this purpose certain items of income such as insurance claims, overdue interest from debtors etc., have been considered to the extent the amount is ascertainable / accepted by the parties.

ii) Use of Estimates : The preparation of the financial statement in confirmity with Generally Accepted Accounting Principles (GAAP) requires the Management to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to contingent liabilities as at the date of the financial statements and reported amounts of income and expenses during the period. Examples of such estimates include provision of doubtful debts, future obligations under employeess retirements benefits plans, income taxes and useful lives of fixed assets and intangible assets. Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as the Management becomes aware of changes in circumstances surroundings the estimates. Any revision to accounting estimates is recognized prospectively in current and future periods.

iii) Inflation : Assets and Liabilities are recorded at historic cost as a going concern basis. These costs are not adjusted to reflect the changes in the purchasing power of money.

B) Fixed assets:

Fixed assets are stated at cost less depreciation/ amortization and impairment losses, if any, Cost includes expenses incidental to the installation of assets and attributable borrowing costs.

C) Depreciation:

i) The Company has provided depreciation on straight line method at the rates prescribed under schedule XIV of the Companies (Amendment) Act, 1956.

ii) Depreciation has been provided on fixed assets net of modvat credit taken during the year.

D) Impairment of assets :

The Company assesses at each Balance Sheet date whether there is any indication that an asset, including intangible, may be impaired. If any such indication exists, the Company estimates the recoverrable amount of the asset. If such recoverable amount of the asset or the recoverable amount of 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 recognised in the Profit and Loss Account. There is no impairmant Loss on Fixed Assets on the basis of review carried out by the Management in accordance with Accounting Standard 28 issued by the Institute of Chartered Accounts of India.

E) Investment:

i) Long term Investments are valued at cost.

ii) Current Investments are valued at lower of cost or market value.

iii) Appropriate provision has been made in the accounts for diminution in the value of investments in accordance with AS-13 issued by the Institute of Chartered Accountants of India.

F) Inventories:

i) Stock of Raw material, packing material, stores & fuel and trading finished goods are valued at cost. Cost Formulae used are first in first out .average cost or specific identification as applicable.

ii) Semi-Finished Goods are valued at chemical cost plus overheads.

iii) Stock of manufactured finished goods is valued at, lower of, chemical cost plus overheads or net realisable value. Excise duty on manufactured finished goods remaining in inventory is included apart of valuation of finished goods as required under AS -2 (Revised) issued by the Institute of Chartered Accountant of India.

G) Sundry debtors and loans & advances :

Sundry debtors and loans & advances are stated after making adequate provision for doubtful debts and advances.

H ) Recognition of Income and expenditure :

I) Revenue is recognized when the significant risks and rewards of ownership of goods have passed to the buyer which generally coincides with delivery. Sales turnover for the year include sale value of goods, excise duties and other recoveries, such as insurance, transport and packing charges excluding VAT/CST.

ii) In respect of exports made under duty entitlement Pass Book Scheme (DEPB), in terms of Para 7.25 of the exim policy, and the goods are covered by standard input output norms notified by the Ministry of commerce in hand book procedure. DEPB are issued to the company giving duty credit to be utilised for the purpose of payment of custom duty at the time of Imports. Duty credit so received and receivable on the basis of exports of the current year has been included in the export incentives.

iii) Revenue is recognised and expenditure is accounted for on their accrual.

iv) The Modvat Credit is accounted by crediting the amount to cost of purchases on receipt of goods and is used on dispatch by debiting excise duty account.

I) Excise duty:

Excise duties recovered are included in the sale of products. Excise duty paid on dispatches are shown separately as an item of Manufacturing Expenses.

J) Research and development:

Revenue expenses are charged to Profit & Loss Account in the year in which it is incurred while the capital expenditure is shown as addition to Fixed Assets.

K) Employee benefits:

i) Short-term employee benefits are recognized as an expense at the undiscounted amount in the Profit & Loss A/c in the year in which the related services is rendered.

ii) Contribution to Provident Funds/Employee Pension Scheme are accounted on accrual basis.

iii) Provision for Gratuity Liability has been made in the accounts based on actuarial valuation as at the year end which is in accordance with Accounting Standard No. 15 issued by the Institute of Chartered Accountants of India.

iv) Companys Liabilities towards compensated absences to employees are determined on the basis of valuations as at balance sheet date , earned out by an independent actuary using Projected Unit Credit Method.Acturial gains & losses comprise experience adjustments and the effect of changes in actuarial assumptions and are recognised immediately in the Profit and loss Account.

L) Foreign currency transactions :

i) Transaction denominated in foreign currency are converted into Indian rupees at the exchange rate prevailing on the date of transaction.

ii) Gains or losses on settlement of the transactions are recognised in the Profit & Loss A/c.

iii) Monetary assets & liabilities in foreign currency at the year end are restated by applying the closing rate and the difference arising out of such conversion is recognised in Profit & Loss A/c.

iv) In case of items which are covered by forward exchange contracts, the difference between the year end rate and the rate on the date of the contract is recognised as exchange difference.

M) Provisions and contingent liabilities :

i) A provision is recognised when the company has a present obligation as a result of past events, for which it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made. Provisions are reviewed regularly and are adjusted where necessary to reflect the current best estimate of the obligation. When the Company expects a provision to be reimbursed, the reimbursement is recognised as a separate asset only when reimbursement is vertually certain. v

ii) A disclosure for contigent liablities is made where there is a possible obligation or a present obligation that may probably not require on outflow or resources. When there is a possible of a present obligation where the likehood of outflow of resources is remote, no provision or disclosure is made.

iii) Contingent liabilites are disclosed in Notes to Accounts.

N) Taxation:

i) Current Tax is the amount of the tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961. ii) Deferred Tax is recognised on timing differnces, being the diffences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

Deferred Tax Assets in respect of unabsorbed depreciation and carry forward of losses are recognised if there is virtual cetainty that there will be sufficient furute taxable income available to realise such losses.

Other Deferred Tax Assets are recognised if there is reasonable certainty that there will be sufficient future taxable income to realise such assets.

O) Earnings per share :

The basic and diluted earnings per share is computed by dividing the net profit after tax attributable to equity shareholders for the year, by the weighted average number of equity shares outstanding during the year.

 
Subscribe now to get personal finance updates in your inbox!