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Accounting Policies of Jullundur Motor Agency (Delhi) Ltd. Company

Mar 31, 2018

1 Significant accounting policies

A Basis of Preparation of financial statements

The financial statements have been prepared to comply in all material respects with the notified accounting standard under Section 133 of the Companies Act, 2013 (‘the Act’) read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards)Amendment Rules, 2016. The financial statements have been prepared in accordance with IndianAccounting Standards (referred to as “Ind AS”) under the historical cost convention on an accrual basis except for certain financial instruments which are measured as fair values at the end of each reporting year as explained in the accounting policies below.

The accounting policies have been consistently applied by the Company except where a newly-issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hit her to in use.

Upto the year ended 31st March, 2016, the company prepared the financial statements in accordance with the requirements of previous GAAP, which includes standards notified under the Companies (Accounting Standards) Rules, 2006 and other relevant provisions of the Act. These are the Company’s first Ind AS financial statements. The date of transition to Ind AS is 1st April, 2016. Refer to Note 4.1.1 for the details of first-time adoption exemptions availed by the company.

The company has adopted all the IndAS standards and the adoption was carried out in accordance with Ind AS 101, First Time Adoption of Indian Accounting Standards. The transition was carried out from Indian Accounting Principles generally accepted in India as prescribed under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 (IGAAP), which was the previous GAAP. Reconciliations and descriptions of the effect of the transition have been summarized in Note 2.

B Use of Estimates:

The preparation of financial statements in conformity with Ind AS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting year end. Difference between the actual results and estimates are recognised in the year in which the results materialise.

C Property Plant and Equipments (PPE):

(i) Tangible Assets

Property plant and Equipments are stated at cost less accumulated depreciation and impairment losses, if any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use. Borrowing costs relating to acquisition of PPE which takes substantial year of time to get ready for its intended use are also included to the extent they relate to the year till such assets are ready to be put to use. Improvement to PPE which has the effect of increasing the future benefits from the existing assets beyond their previously assessed standard of performance is included in the gross block.

Tangible assets not ready for the intended use on the date of the Balance Sheet are disclosed as “ capital work in progress”.

Transition to Ind AS

On transition to Ind AS, the Company has elected to continue with the carrying value of all its property, plant and equipment recognised as at 1 April, 2016 measured as per the previous GAAP and use that carrying value as the deemed cost of the property, plant and equipment.

(ii) Intangible assets

Intangible assets are recognised when it is probable that the future economic benefits that are attributable to the assets will flow to the Company and the cost of the assets can be measured reliably.

Intangible assets are stated at original cost less accumulated amortisation and impairment losses, if any

D Depreciation and amortisation

Depreciation on PPE except buildings and plant and equipments is provided on the written down value basis at the rates as derived, based on the useful life of the assets as specified in Schedule II to the Companies Act, 2013.

Depreciation on buildings and plant and equipment is provided on straight line basis at the rates as derived, based the useful life of the assets as specified in Schedule II to the Companies Act, 2013.

Intangible assets being software licenses are amortised on straight line method over their estimated useful life.

E Financial Instruments

(i) Initial recognition

Financial assets and financial liabilities are recognised in the Company’s statement of financial position when the Company becomes a party to the contractual provisions of the instrument. The Company determines the classification of its financial assets and liabilities at initial recognition. All financial assets and liabilities are initially recognised at fair value plus directly attributable transaction costs in case of financial assets and liabilities not at fair value through profit or loss. Financial assets and liabilities carried at fair value through profit or loss are initially recognised at fair value, and transaction costs are expensed in the income statement.

(ii) Subsequent Measurement

a) Financial assets carried at amortized cost

A financial asset is subsequently measured at amortized cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows, and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

b) Financial assets carried at fair value through other comprehensive income

A financial asset is subsequently measured at fair value through other comprehensive income if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payment of principal and interest on the principal amount outstanding. Further, in cases where the company has made an irrevocable “election based, on its business model, for its investments which are classified as equity instruments, the subsequent changes in fair value are recognised in other comprehensive income.

c) Financial assets carried at fair value through profit or loss

A financial asset which is not classified in any of the above categories is subsequently fair valued through profit or loss.

d) Financial liabilities

Financial liabilities are subsequently carried at amortized cost using the effective interest method. For trade and other payables maturing within one year from the Balance sheet date, the carrying amount approximate fair value due to the short maturity of these instruments.

e) Equity Instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Company are recognized at the proceeds received, net of direct issue costs.

f) Investment in subsidiaries

Investment in subsidiaries is carried at cost in the financial statements.

(iii) Derecognition of financial instruments

The company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire or it transfers the financial asset and the transfer qualifies for derecognition under Ind AS 109. A financial liability (or a part of financial liability) is derecognized from the Company’s Balance Sheet when the obligation specified in the contract is discharged or cancelled or expires.

(iv) Fair value of financial instruments

In determining the fair value of its financial instruments, the Company uses a variety of methods and assumptions that are based on market conditions and risks existing at each reporting date. The method used to determine fair value include available quoted market prices and discounted cash flow analysis. All methods of assessing fair value result in general approximation of value, and such value may never actually be realized.

For financial assets and liabilities maturing within one year from the Balance Sheet date and which are not carried at fair value, the carrying amounts approximates fair value due to the short maturity of these instruments.

F Inventories

Finished goods and Goods in transit are valued at cost or estimated realizable value whichever is lower. Cost of inventories also include all other costs incurred in bringing the inventories to their present location and condition. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.

Slow moving, damaged, unsalable or obsolete inventories are identified at the each reporting date on the basis of technical evaluation and valued at estimated realizable value.

G Revenue Recognition

Revenue is measured at fair value of consideration received or receivable and recognised to the extent that it is probable that economic benefits will flow to the company and the revenue can be reliably measured.

(i) Sale of products

The Company recognises revenue on the sale of products, net of discounts, sales incentives, customer bonuses, applicable tax and rebates granted, when substantial risks and rewards of ownership are transferred to the buyer usually on delivery of goods.

The Company recognises revenue when (or as) a performance obligation is satisfied, i.e. when ‘control’ of the goods or services underline the particular performance obligation is transfered to the customer.

(ii) Other operating revenue

Other operational revenue represents income earned from activities incidental to the business and is recognised when right to receive the income is established.

(iii) Other Income

Interest income from a financial asset is recognised using the effective interest rate.

Dividend income is recognised in the year in which the right to receive the same is established.

H Purchases

Purchases are net of incentive and commission received from suppliers and adjusted for claims rejected and goods short received. Incentive and commission from suppliers are recognised when no significant uncertainty exists regarding their collectability.

I Trade and other payables

These amounts represent liabilities for goods and services provided to the Company prior to the end of financial year which are unpaid. The amounts are unsecured and are usually paid in accordance with the terms with the vendors. Trade and other payables are presented as current liabilities unless payment is not due within 12 months after the reporting year. They are recognised initially at their fair value and subsequently measured at amortised cost using the effective interest method.

J Foreign Exchange Transactions Functional currency

The functional currency of the Company is the Indian Rupee. These financial statements are presented in Indian rupees (rounded off to rupee) which is the company’s functional and presentation currency.

K Employee benefits

(i) Short term employee benefits :

All employee benefits due wholly within twelve months of rendering of services are classified as short term employee benefits. Benefits like salaries, wages, leave salary, contribution to Provident Fund/ Employee State Insurance contributions etc. paid or payable during the reporting year and the expected bonus expense are recognised as an expense on an undiscounted basis in the year in which the employee renders the related service.

(ii) Post-employment benefits

a) Defined Contribution Plan

The State governed Provident Fund Scheme, Employees’ State Insurance Scheme and Employees Pension Scheme are defined contribution plans. The Company has no obligation, other than the contribution payable to the Provident Fund Scheme, Employees’ State Insurance Scheme and Employees Pension Scheme. The contribution paid /payable under the schemes is recognised during the year in which employee renders the related service.

b) Defined Benefit Plan

The liability is provided based on actuarial valuation certified by consulting actuary. The Company recognizes the net obligation of a defined benefit plan in its balance sheet as an asset or liability. Remeasurements comprising of actuarial gains and losses, the effect of the asset ceiling (excluding amounts included in net interest on the net defined benefit liability) and the return on plan assets (excluding amounts included in net interest on the net defined benefit liability) relating to retirement benefit plans are recognised in Other Comprehensive Income which are not reclassified to profit or loss in subsequent years.

The Company’s Gratuity is Defined Benefit Retirement Plan. The Company ‘s liability towards Gratuity is determined using the Projected Unit Credit Method which recognises each year of service as giving rise to additional unit of employee benefit entitlement.

In respect of Directors, the liability for gratuity is unfunded and in respect of other eligible employees, the Gratuity scheme is operated through Group Gratuity Scheme of Life Insurance Corporation of India.

L Income taxes

The accounting treatment followed for taxes on income is to provide for Current Income Tax and Deferred Income Tax. Income tax expense is recognized in the Statement of Profit and Loss except to the extent that it relates to items recognized directly in equity, in which case it is recognized in other comprehensive income. Current income tax for current and prior year is the aggregate amount of income tax determined as payable in respect of taxable income for the year, using the tax rates and tax laws that have been enacted or substantially enacted by the Balance Sheet date. Deferred Income Tax asset and liability are recognized for all temporary differences arising between the tax base of assets and liabilities and their carrying amounts in the financial statements except when the deferred income tax arises from the initial recognition of an asset or liability in a transaction that is not a business combination and affects neither accounting nor taxable profit or loss at the time of the transaction. Deferred Income tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized. Deferred tax assets and liabilities are measured using tax rates and tax laws that have been enacted or substantively enacted by the Balance Sheet date and are expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. A deferred tax asset is recognized to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences and tax losses can be utilized. Deferred tax is not provided on the undistributed earnings of subsidiaries where it is expected that the earnings of the subsidiary will not be distributed in the foreseeable future. The company offsets current tax asset and current tax liabilities, where it has a legally enforceable right to set off the recognized amounts and where it intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.

M Provision and Contingencies

i) Provision is recognised (for liabilities that can be measured by using a substantial degree of estimation) when:

a) the company has a present obligation as a result of a past events.

b) a probable outflow of resources embodying economic benefits is expected to settle the obligation ; and

c) the amount of the obligation can be reliably estimated.

ii) Contingent liability is disclosed in case there is ;

a) possible obligation that arises from past events and the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the company : or

b) a present obligation arising from past events but is not recognised because :

(i) it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation : or

(ii) a reliable estimate of the amount of the obligation cannot be made.

N Impairment

(i) Financial assets

The company recognizes loss allowances using the expected credit loss (ECL) model for the financial assets which are not fair valued through profit or loss. Loss allowance for trade receivables with no significant financing components is measured at an amount equal to lifetime ECL. For all other financial assets, ECLs are measured at an amount equal to the 12-month ECL, unless there has been a significant increase in credit risk from initial recognition in which case those are measured at lifetime ECL. The amount of ECLs (or reversal) that is required to adjust loss allowance at the reporting date to the amount that is required to be recognized is recognized as an impairment gain or loss in profit or loss.

(ii) Non-financial assets

Intangible assets and property, plant and equipment

Intangible assets and property, plant and equipment are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the Cash Generating Unit to which the asset belongs.

If such assets are considered to be impaired, the impairment to be recognized in the Statement of Profit and Loss is measured by the amount by which the carrying value of the assets exceeds the estimated recoverable amount of the asset. An impairment loss is reversed in the Statement of Profit and Loss if there has been a change in the estimates used to determine the recoverable amount. The carrying amount of the asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of any accumulated amortization or depreciation) had no impairment loss been recognized for the asset in prior years.

O Earning per share (EPS)

“Basic EPS are computed by dividing the net profit or loss for the year attributable to equity shareholders of the Company by the weighted average number of equity shares outstanding the during the year. Diluted earning per equity share are computed by dividing the net profit attributable to the equity holders of the company by the weighted average number of equity shares considered for deriving basic earnings per equity share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares. The dilutive potential equity shares are adjusted for the proceeds receivable had the equity shares been actually issued at fair value (i.e. the average market value of the outstanding equity shares). Dilutive potential equity shares are deemed converted as of the beginning of the year, unless issued at a later date. Dilutive potential equity shares are determined independently for each year presented.

Items of “Other Comprehensive Income” are not considered for calculation of EPS (Basic or Diluted).

P Dividends

The final dividend on shares is recorded as a liability on the date of approval by the shareholders, and interim dividends are recorded as a liability on the date of declaration by the Company’s Board of Directors.

Q Leases

Lease under which the risks and rewards incidental to ownership are not transferred to lessee is classified as operating lease.

Company as a lessor

Rental income from operating leases is recognized on a straight line basis over the term of the relevant lease unless another systematic basis is more representative of the time pattern of the users’ benefits or the payments to the lessor are structured to increase in line with expected general inflation.

Company as a lessee

Lease payments under an operating lease are recognised as an expense in the statement of profit and loss on straight line basis over the lease term unless another systematic basis is more representative of the time pattern of the users’ benefits or the payments to the lessor are structured to increase in line with expected general inflation.

R Cash and cash equivalents

For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to know amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities in the balance sheet.


Mar 31, 2016

1. Significant accounting policies

A. Basis of Preparation of financial statements

The Company maintains its accounts on accrual basis following the historical cost convention in accordance with generally accepted accounting principles (GAAP) in compliance with the provisions of The Companies Act 2013 (the Act) and the applicable Accounting Standards.

B Use of Estimates:

The preparation of financial statements, in conformity with the generally accepted accounting principles, requires estimates and assumptions to be made that affect the reported amount of assets and liabilities as on the date of financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimate are recognized in the period in which the results materialize.

C. Fixed Assets

a. Tangible, Noncurrent Fixed Assets

(i) Fixed assets are shown in accounts at historical cost less depreciation. Improvement to fixed assets which have the effect of increasing the future benefits from the existing assets beyond its previously assessed standard of performance is included in the gross block

(ii) Leasehold land : land acquired under long term lease is classified under "tangible assets".

(iii) Tangible assets not ready for the intoned use on the date of the Balance Sheet are disclosed as " capital work in progress".

b. Intangible assets

(i) Intangible assets are recognized when it is probable that the future economic benefits that are attributable to the asset will flow to the enterprise and the cost of the asset can be measured reliably.

(ii) Intangible assets are stated at original cost less accumulated amortization.

D. Depreciation and amortization

Depreciation on tangible assets except building and plant and machinery is provided on the written down value basis at the rates as derived, based on the useful life of the assets as specified in Schedule II to the Companies Act, 2013.

Depreciation on building and plant and machinery is provided on straight line basis at the rates as derived, based the useful life of the assets as specified in Schedule II to the Companies Act, 2013.

Land acquired under long term lease is amortized over the period of lease.

Intangible assets are amortized on straight line method over the estimated useful life.

E. Investments

Long term investments are carried at cost. However if there is a decline other than temporary in the value of such investments, the carrying amount is reduced to recognize the decline. Current investments are carried at lower of cost and fair value.

F. Inventories

Finished goods and Goods in transit are valued at cost or estimated realizable value whichever is lower. Cost includes related overheads.

G. Revenue Recognition

a. Revenue from sale of goods is recognized when substantial risks and rewards of ownership are transferred to the buyer. The sales are reflected net of applicable tax, returns and trade discounts.

b. Others operational revenue represents income earned from activities incidental to the business and is recognized when right to receive the income is established.

c. Other Income

Interest income is accrued at the applicable interest rate.

Dividend and other income is recognized in the period in which the right to receive the same is established

H. Purchases

Purchases are net of incentive and commission received from suppliers and include claims rejected and goods short received. Incentive and commission from principals are recognized as and when no significant uncertainty exists regarding their collectability.

1. Foreign Exchange Transactions

Transactions in foreign currencies are recorded at exchange rates prevailing on the date of respective transactions.

J. Employees Benefits

a. Short term employee benefits : All employee benefits due wholly within twelve months of rendering of services are classified as short term employee benefits. Benefits like salaries, wages, leave salary, contribution to Provident Fund/ Employee State Insurance contributions etc. paid or payable during the reporting period and the expected cost of bonus are recognized in the period in which the employee renders the related service. b . Post -employment benefits

(i). Defined Contribution Plan : The State governed provident fund scheme, employee state insurance scheme and employee pension scheme are defined contribution plans. The contribution paid /payable under the schemes is recognized during the period in which employee renders the related service.

2. Defined Benefit Plan

(a) The Company''s Gratuity is Defined Benefit Plan. The Company ''s Liability towards Gratuity is determined using the Projected Unit Credit Method which recognizes each period of service as giving rise to additional unit of Employee Benefit Entitlement. The Gratuity scheme is operated through Group Gratuity Scheme of LIC.

(b) The liabilities are provided based on Actuarial Valuation certified by LIC. Actuarial gains and losses are recognized in statement of profit and loss.

K. Taxes on Income

The accounting treatment followed for taxes on income is to provide for Current Tax and Deferred Tax. Current Tax is the aggregate amount of income tax determined to be payable in respect of taxable income for the period. Deferred tax is the tax effect of timing differences between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

L. Provision and Contingencies Liabilities

i) Provision is recognized (for liabilities that can be measured by using a substantial degree of estimation) when:

a) the company has a present obligation as a result of a past event.

b) a probable outflow of resources embodying economic benefits is expected to settle the obligation ; and

c) the amount of the obligation can be reliably estimated.

Contingent liability is disclosed in case there is ;

ii) a) possible obligation that arises from past events and existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the enterprise ; or

b) a present obligation arising from past events but is not recognized

(i) it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligations ; or

(ii) a reliable estimate of the amount of the obligation cannot be made.

M. Impairment of Assets

At each Balance Sheet date an assessment is made whether any indication exists that an asset has been impaired. If any such indication exists, an impairment loss, if material, i.e. the amount by which the carrying amount of an asset exceeds its recoverable amount is provided in the books of account.

N. Earnings per share (EPS)

Basic EPS is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding the during the year.

O. Leases

Lease payments under an operating lease are recognized as an expense in the statement of profit and loss on straight line basis over the lease term unless another systematic basis is more representative of the time pattern of the users'' benefits.

b) Terms/rights attached to equity shares

The company has one class of shares referred to Equity Shares having par value of Rs.10/- each. Each holder of equity share is entitled to one vote per share. The dividend declared by the Board of directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

During the year March 31, 2016 the amount of dividend per share recognized as distribution to equity shareholders was Rs. 4/- (Previous year Rs.4/-)

In the event of liquidation of the company, the holders of equity shares will be entitled to receive any part of the remaining assets of the company. The distribution will be in proportion to the number of equity shares held by the shareholders.

c) Shares held by holding company or ultimate holding company or subsidiaries or associates of the holding company or the holding company

There is no holding or ultimate holding company of the company

d) Aggregate number of bonus shares issued, share issued for consideration other than cash and shares bought back during the period of five years immediately preceding the reporting date:

Equity Shares allotted as fully paid up by way of bonus shares 2981805 equity shares of Rs. 10/- each allotted by way of bonus shares

Equity Shares allotted as fully paid up pursuant to contract(s) without payment being received in cash -

Equity Shares bought back by the company -


Mar 31, 2015

A. Basis of Preperation of financial statements

The Company maintains its accounts on accrual basis following the historical cost convention in accordance with generally accepted accounting principles (GAAP) in compliance with the provisions of The Companies Act 2013 (the Act) and the applicable Accounting Standards.

B Use of Estimates:

The preparation of financial statements, in conformity with the generally accepted accounting principles, requires estimates and assumptions to be made that affect the reported amount of assets and liabilities as on the date of financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and restimate are recognised in the period in which the results materialise.

C. Fixed Assets

a. Tangible, Non current Fixed Assets

(i) Fixed assets are shown in accounts at historical cost less depreciation. Improvement to fixed assets which have the effect of increasing the future benefits from the existing assets beyond its previously assessed standrad of performance is included in the gross block

(ii) Leasehold land : land acquired under long term lease is classified under "tangible assets".

(iii) Tangible assets not ready for the intened use on the date of the Balance Sheet are disclosed as " capital work in progress".

b. Intangible assets

(i) Intangible assets are recognised when it is probable that the future economic benefits that are attributable to the asset will flow to the enterprise and the cost of the asset can be measured reliably.

(ii) Intangible assets are stated at original cost less accumulated amortisation.

(iii) Intangible assets not ready for the intended use on the date of the Balance Sheet are disclosed as " Intangible assets under development"'

D. Depreciation and amortisation

Depreciation on tangible assets except building and plant and machinery is provided on the written down value basis at the rates as derived, based on the useful life of the assets as specified in Schedule II to the Companies Act, 2013.

Depreciation on building and plant and machinery is provided on straight line basis at the rates as derived, based the useful life of the assets as specified in Schedule II to the Companies Act, 2013.

Land acquired under long term lease is amortised over the period of lease.

Intangible assets are amortised on straight line method over the estimated useful life.

E. Investments

Long term investments are carried at cost. However if there is a decline other than temporary in the value of such investments, the carrying amount is reduced to recongnise the decline. Current investments are carried at lower of cost and fair value.

F. Inventories

Finished goods and Goods in transit are valued at cost or estimated realizable value whichever is lower. Cost includes related overheads.

G. Revenue Recognition

a. Revenue from sale of goods is recognised when substantial risks and rewards of ownership are transferred to the buyer. The sales are reflected net of applicable tax, returns and trade discounts.

b. Others operational revenue represents income earned from activities incidental to the business and is recognised when right to receive the income is established.

c. Other Income

Interest income is accrued at the applicable interest rate.

Dividend and other income is recognised in the period in which the right to receive the same is established

H. Purchases

Purchases are net of incentive and commission received from suppliers and include claims rejected and goods short received. Incentive and commission from principals are recognised as and when no significant uncertainty exists regarding their collectability.

1. Foreign Exchange Transactions

Transactions in foreign currencies are recorded at exchange rates prevailing on the date of respective transactions.

J. Employees benefits

a. Short term employee benefits : All employee benefits due wholly within twelve months of rendering of services are classified as short term employee benefits. Benefits like salaries, wages, leave salary, contribution to Provident Fund/ Employee State Insurance contributions etc. paid or payable during the reporting period and the expected cost of bonus are recognised in the period in which the employee renders the related service. b . Post -employment benefits

(i). Defined Contribution Plan : The State governed provident fund scheme, employee state insurance scheme and employee pension scheme are defined contribution plans. The contribution paid /payable under the schemes is recognised during the period in which employee renders the related service.

2. Defined Benefit Plan

(a) The Company's Gratuity is Defined Benefit Plan. The Company 's Liability towards Gratuity is determined using the Projected Unit Credit Method which recognises each period of service as giving rise to additional unit of Employee Benefit Entitlement. The Gratuity scheme is operated through Group Gratuity Scheme of LIC.

(b) The liabilities are provided based on Actuarial Valuation certified by LIC. Actuarial gains and losses are recognised in statement of profit and loss.

K. Taxes on Income

The accounting treatment followed for taxes on income is to provide for Current Tax and Deferred Tax. Current Tax is the aggregate amount of income tax determined to be payable in respect of taxable income for the period. Deferred tax is the tax effect of timing differences between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

L. Provision and Contingencies Liabilities

i) Provision is recognised (for liabilities that can be measured by using a substantial degree of estimation) when:

a) the company has a present obligation as a result of a past event.

b) a probable outflow of resources embodying economic benefits is expected to settle the obligation ; and

c) the amount of the obligation can be reliably estimated.

Contingent liability is disclosed in case there is ;

ii) a) possible obligation that arises from past events and existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the enterprise ; or

b) a present obligation arising from past events but is not recognised

(i) when it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligations ; or

(ii) a reliable estimate of the amount of the obligation cannot be made.

M. Impairment of Assets

At each Balance Sheet date an assessment is made whether any indication exists that an asset has been impaired. If any such indication exists, an impairment loss, if material, i.e. the amount by which the carrying amount of an asset exceeds its recoverable amount is provided in the books of account.

N. Earning per share (EPS)

Basic EPS is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding the during the year.

O. Leases

Lease payments under an operating lease are recognised as an expense in the statement of profit and loss on straight line basis over the lease term unless another systematic basis is more representative of the time pattern of the users' benefits.


Mar 31, 2014

A) Accounting convention:

The accounts are prepared on accrual basis under the historical cost convention in accordance with the accounting standards referred to in section 211 (3C) of the Companies Act, 1956 and other relevant provisions of the said Act. ''

b) Use of Estimates:

The preparation of financial statements, in conformity with the generally accepted accounting principles, requires estimates and assumptions to be made that affect the reported amount of assets and liabilities as of the date of financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognised on the period in which the results materialise.

c) Fixed assets

Fixed assets are shown in accounts at historical cost less depreciation. Improvement to fixed assets which have the effect of increasing the future benefits from the existing assets beyond its previously assessed standard of performance are included in the gross block.

d) Depreciation

Depreciation on building,plant and machinery is provided for on Straight Line basis and on other fixed assets on Written Down Value basis as per the rates specified in Schedule XIV to the companies Act, 1956.

e) Intangible assets

Intangible Assets are stated at cost less accumulated amount of amortisation.

f) Amortisation

Lease hold Land is amortised over the period of lease. Intangible assets are amortised on straight line method over the estimated useful life.

g) Inventories

Finished goods and Goods in Transit are valued at cost or estimated realizable value whichever is lower.

h) Investments

Long Term Investments are carried at Cost. However if there is a decline other than temporary in the value of long term investments, the carrying amount is reduced to recognise the decline. Current investments are carried out at lower of cost and fair value.

i) Employees benefits

1. Defined Contribution Plan

The Company''s Provident Fund Scheme and ESI plans are defined Contribution Plans and the Company''s Contribution paid/ payable is recognised as expense in the Statement of Profit and Loss during the period in which the employees render the related service.

2. Defined Benefit Plan

(a) The Company''s Gratuity is Defined Benefit Plan. The Company ''s Liability towards Gratuity is determined using the Projected Unit Credit Method which recognises each period of service as giving rise to additional unit of Employee Benefit Entitlement. The Gratuity scheme is operated through Group Gratuity Scheme of Lie.

(b) The liabilities are provided based on Actuarial Valuation certified by LIC. Actuarial gains and losses are charged to Profit and Loss Account.

j) Sales and other income

Revenue from sale of goods is recognised when the property in the goods is transferred to the buyer. The Sales are reflected net of sales tax, returns and trade discount. Cash discount received is recognised in the books at the time of making the payments to suppliers. Dividend from investments is recognised when the Company in which they are held declares the dividend and when the right to receive is established.

k) Purchases

Purchases are net of incentive and commission received from suppliers and include claims rejected and goods '' short received. Incentive and commission from principals are recognised as and when no significant uncertainty exists regarding their collectability.

l) Leases:

The company has leased facilities under cancellable operating lease arrangements with a lease term raging from one year to three years, which are subject to renewals at mutual consents thereafter. The cancellable arrangements can be terminated by either party after giving due notices. The Company does not have any non cancellable lease arrangements therefore no disclosure is required as per AS 19. Company has given some portion of the building on rent and it is not possible to segregate the cost of rented protion of the building.

m) Foreign Exchange Transactions

Transactions in foreign currencies are recorded at exchange rates prevailing on the date of respective transactions.

n) Impairment of Assets

At each Balance Sheet date an assessment is made whether any indication exists that an asset has been impaired. If any such indication exists, an impairment loss, if material, i.e. the amount by which the carrying amount of an asset exceeds its recoverable amount is provided in the books of account.

o) Accounting forTaxes on Income

The accounting treatment followed for taxes on income is to provide for Current Tax and Deferred Tax. Current Tax is the aggregate amount of income tax determined to be payable in respect of taxable income for the period. Deferred tax is the tax effect of timing differences between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

p) Provision and Contingencies Liabilities

i) Provision is recognised (for liabilities that can be measured by using a substantial degree of estimation) when:

a) the company has a present obligation as a result of a past event.

b) a probable outflow of resources embodying economic benefits is expected to settle the obligation ; and

c) the amount of the obligation can be reliably estimated.

ii) Contingent liability is disclosed in case there is;

a) possible obligation that arises from past events and existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the enterprise; or

b) a present obligation arising from past events but is not recognised

(i) when it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligations; or

(ii) a reliable estimate of the amount of the obligation cannot be made.


Mar 31, 2013

A) Accounting convention:

The accounts are prepared on accrual basis under the historical cost convention in accordance with the accounting standards referred to in section 211 (3C) of the Companies Act, 1956 and other relevant provisions of the said Act.

b) Use of Estimates:

The preparation of financial statements, in conformity with the generally accepted accounting principles, requires estimates and assumptions to be made that affect the reported amount of assets and liabilities as of the date of financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognised on the period in which the results materialise.

c) Fixed assets

Fixed assets are shown in accounts at historical cost less depreciation improvement to fixed assets which have the effect of increasing the future benefits from the existing assets beyond its previously assessed standard of performance are included in the gross block.

d) Depreciation

Depreciation on building .plant and machinery is provided for on Straight Line basis and on other fixed assets on Written Down Value basis as per the rates specified in Schedule XIV to the companies Act, 1956.

e) Intangible assets

Intangible Assets are stated at cost less accumulated amount of amortisation.

f) Amortisation

Lease hold Land is amortised over the period of lease. Intangible assets are amortised on straight line method over the estimated useful life.

g) Inventories

Finished goods and Goods in Transit are valued at cost or estimated realizable value whichever is lower.

h) Investments

Long Term Investments are carried at Cost. However if there is a decline other than temporary in the value of long term investments, the carrying amount is reduced to recognise the decline. Current investments are carried out at lower of cost and fair value.

i) Employees benefits

1. Defined Contribution Plan

The Company''s Provident Fund Scheme and ESI plans are defined Contribution Plans and the Company''s Contribution paid/ payable is recognised as expense in the Statement of Profit and Loss during the period in which the employees render the related service.

2. Defined Benefit Plan

(a) The Company''s Gratuity is Defined Benefit Plan. The Company ''s Liability towards Gratuity is determined using the Projected Unit Credit Method which recognises each period of service as giving rise to additional unit of Employee Benefit Entitlement. The Gratuity scheme is operated through Group Gratuity Scheme of LIC.

(b) The liabilities are provided based on Actuarial Valuation certified by LIC. Actuarial gains and losses are charged to Profit and Loss Account.

j) Sales and other income

Revenue from sale of goods is recognised when the property in the goods is transferred to the buyer. The Sales are reflected net of sales tax, returns and trade discount. Cash discount received is recognised in the books at the time of making the payments to suppliers. Dividend from investments is recognised when the Company in which they are held declares the dividend and when the right to receive is established.

k) Purchases

Purchases are net of incentive and commission received from suppliers and include claims rejected and goods short received. Incentive and commission from principals are recognised as and when no significant uncertainty exists regarding their collectability.

l) Leases:

The company has leased facilities under cancellable operating lease arrangements with a lease term raging from one year to three years, which are subject to renewals at mutual consents thereafter. The cancellable arrangements can be terminated by either party after giving due notices. The Company does not have any non cancellable lease arrangements therefore no disclosure is required as per AS 19. Company has given some portion of the building on rent and it is not possible to segregate the cost of rented protion of the building.

m) Foreign Exchange Transactions

Transactions in foreign currencies are recorded at exchange rates prevailing on the date of respective transactions.

n) Impairment of Assets

At each Balance Sheet date an assessment is made whether any indication exists that an asset has been impaired. If any such indication exists, an impairment loss, if material, i.e. the amount by which the carrying amount of an asset exceeds its recoverable amount is provided in the books of account.

o) Accounting for Taxes on Income

The accounting treatment followed for taxes on income is to provide for Current Tax and Deferred Tax. Current Tax is the aggregate amount of income tax determined to be payable in respect of taxable income for the period. Deferred tax is the tax effect of timing differences between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

p) Provision and Contingencies Liabilities

i) Provision is recognised (for liabilities that can be measured by using a substantial degree of estimation) when:

a) the company has a present obligation as a result of a past event.

b) a probable outflow of resources embodying economic benefits is expected to settle the obligation ; and

c) the amount of the obligation can be reliably estimated.

ii) Contingent liability is disclosed in case there is;

a) possible obligation that arises from past events and existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the enterprise; or

b) a present obligation arising from past events but is not recognised

(i) when it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligations; or

(ii) a reliable estimate of the amount of the obligation cannot be made.

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