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Accounting Policies of Kopran Ltd. Company

Mar 31, 2015

(a) Basis of preparation of financial statement.

The financial statements have been prepared in accordance with the generally accepted accounting principles in india (''Indian GAAP") to comply with the accounting standards specified under section 133 of the Companies Act,2013, read with Rule 7 of the Companies (Accounts) rules, 2014 and relevant provisions of the Companies Act, 2013 and other accounting pronouncements of the Institute of Chartered Accountants of India. The financial statements have been prepared under historical cost convention and on accrual basis. The accounting policies have been consistently applied by the company and are consistent with those used in the previous year except for change in the accounting policy for depreciation in respect of tangible assets other than factory building and plant and machinery as mentioned in note no 10.

(b) Uses of estimates

The presentation of financial statements in conformity with the generally accepted accounting principles requires the management to make estimates and assumptions that affect the reported amount of assets and liabilities, revenues and expenses and disclosure of contingent liabilities. Such estimates and assumptions are based on management''s evaluation of relevant facts and circumstances as on the date of financial statements. The actual outcome may diverge from these estimates.

(c) Fixed assets and depreciation

i) Fixed assets :

Fixed assets are stated at cost less accumulated depreciation/amortisation. Cost comprises of the purchase price and any attributable cost of bringing the assets to its working condition for its intended use.

ii) Depreciation :

Depreciation on tangible fixed assets has been provided on the straight-line method as per the useful life prescribed in Schedule II to the Companies Act, 2013 except in respect of the plant and machinery, in whose case the estimated useful life has been assessed to be 20 years based on technical advice, taking into account the nature of the asset, the estimated usage of the asset, the operating conditions of the asset, past history of replacement, anticipated technological changes, etc.

(d) Investments

1. Investments intended to be held for not more than a year are classified as current investments. These are valued at lower of cost or fair value.

2. Long term investments are stated at cost. Provision for diminution in value is made only if, in the opinion of management such a decline is other than temporary.

(e) Inventories

Items of inventories are measured at lower of cost or net realisable value. Cost of raw materials, stores & spares and packing materials is determined using first in first out (FIFO) method. Cost of work-in-process and finished goods is determined on absorption costing method.

(f) Research and development expenses

1. Revenue expenditure on research and development is charged to profit and loss account under respective heads of account in the year in which it is incurred.

2. Capital expenditure is included in fixed assets under the respective heads.

(g) Foreign exchange transactions

1. Transactions in foreign currency are recorded at the exchange rate prevailing as on the date of transaction.

2. Foreign currency assets / liabilities as on the balance sheet date are translated at the exchange rate prevailing on the date of balance sheet.

3. The exchange difference arising out of settlement and restatement of foreign currency monetary items including those arising on repayment and translation of liabilities relating to fixed assets are taken to statement of profit and loss account.

4. Forward exchange contracts outstanding as at the year end on account of firm commitment transactions are marked to market and the losses, if any, are recognised in the statement of profit and loss and gains are ignored in accordance with the announcement of the Institute of Chartered Accountants of India on ''Accounting for Derivatives'' issued in March 2008.

(h) Revenue recognition

1. Sales of products and services

Sales comprise of sale of goods and services, net of trade discounts and include excise duty.

2. Export benefits

The unutilised export benefits under DEPB scheme / advance license against export as on the balance sheet date are recognised as income on accrual basis.

3. Dividend

Dividend is recognised when the company''s right to receive the payment is established .

4. Other income

Other income is accounted on accrual basis except where the receipt of income is uncertain, it is accounted on receipt basis.

(i) Employee benefits :

1. Defined contribution plan : Company''s contribution paid/payable during the year to ESIC and labour welfare fund are charged to statement of profit and loss account. Company''s provident fund contribution, in respect of certain employees, is made to a government administered fund and charged as an expense to the statement of profit and loss. The above benefits are classified as ''Defined contribution schemes'' as the company has no further defined obligations beyond the monthly contributions.

2. Defined Benefit Plan : Company''s liabilities towards gratuity and leave encashment are determined using the projected unit credit method which considers each period of service as giving rise to an additional unit of benefit entitlement and measures each unit separately to build up the final obligation. Past services are recognised on a straight line basis over the average period until the amended benefits become vested. Actuarial gain and losses are recognised immediately in the statement of profit and loss account as income or expense. Obligation is measured at the present value of estimated future cash flow using a discounted rate that is determined by the reference to market yields at the balance sheet date on government bonds where the currency and terms of government bonds are consistent with the currency and estimated terms of the defined benefit obligation.

(j) Excise and customs duty

1. Excise and customs duty payable in respect of finished goods lying at factory / bonded premises are provided for and included in the valuation of inventory.

2. CENVAT credit of excise duty availed during the year is accounted for by reducing purchase cost of the materials and is adjusted against excise duty payable on clearance of goods produced.

(k) Borrowing costs

Borrowing costs directly attributable to the acquisition or construction of fixed assets are capitalised as part of the cost of the assets, upto the date the asset is put to use. Other costs are charged to the statement of profit and loss account in the year in which they are incurred.

(l) Prior period items

Prior period expenses / income is accounted under the respective head of expenses / income account, material items, if any, are disclosed separately by way of a note.

(m) Earning per share

In accordance with the Accounting Standard -20 (AS-20) "Earning Per Share" issued by the Institute of Chartered Accountants of India, earning per share is computed by dividing the profit after tax with the weighted average number of shares outstanding at the year end. For the purpose of calculating diluted earnings per share, the net profit for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares.

(n) Income tax

Tax expense comprises of current tax, deferred tax charge or credit. Current tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act. The deferred tax charged or credit is recognised using prevailing enacted or substantatively annexed tax rate where there is unabsorbed depreciation or carried forward losses, deferred tax assets are recognised only if there is virtual certainty of realisation of such assets. Other deferred tax assets are recognised only to the extent there is reasonable certainty of realisation in future. Deferred tax assets / liabilities are reviewed as at each balance sheet date based on developments during the period.

(o) Intangible assets

Intangible assets are recognised only when it is probable that the future economic benefits that are attributable to the asset will flow to the Company and the cost of such assets can be measured reliably. Intangible assets are stated at cost less accumulated amortization and impairment loss, if any. All costs relating to the acquisition are capitalized. Intangible assets are amortized over the useful life of the asset.

(p) Impairment of assets

In accordance with Accounting Standard (AS-28) on impairment of assets, at each balance sheet date, the management reviews the carrying amount of assets in each cash generating unit to determine whether there is any indication that those assets were impaired, if any such indication exists, the recoverable amount of the asset is estimated in order to determine: i. The provision for impairment loss, if the carrying amount of an asset exceeds its recoverable amount or ii. The reversal, if any, required of impairment loss recognised in previous years.

(q) Contingencies and provisions

A provision is recognised when the company has a present obligation as a result of past event. It is probable that an outflow of resources embodying economic benefit will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on the best estimate of the expenditure required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimate.

(r) Cash and cash equivalents

The company considers all highly liquid financial instruments, which are readily convertible into known amount of cash that are subject to an insignificant risk of change in value and having original maturities of three months or less from the date of purchase, to be cash equivalents.

(s) Operating lease

Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments under such leases are charged to the statement of profit and loss on a straight line basis over the primary period of the lease.

(t) Other accounting policies

These are consistent with the generally accepted accounting principles in India.


Mar 31, 2014

(a) Basis of preparation of financial statement

The accounts have been prepared under the historical cost convention on the basis of going concern and comply in all material aspects with applicable accounting principles in India and relevant provisions of the Companies Act,1956.

(b) System of accounting

The Company follows the Mercantile System of accounting and recognises Income and Expenditure on accrual basis.

(c) Uses of Estimates

The presentation of financial statements in conformity with the generally accepted accounting principles requires the management to make estimates and assumptions that affect the reported amount of assets and liabilities, revenues and expenses and disclosure of contingent liabilities. Such estimates and assumptions are based on management''s evaluation of relevant facts and circumstances as on the date of financial statements. The actual outcome may diverge from these estimates.

(d) Fixed Assets and Depreciation i) Fixed Assets :

1. Fixed Assets are stated at cost of acquisition less accumulated depreciation. Cost is inclusive of borrowing cost, pilot plant batch expenses and other incidental charges incurred upto the date of installation /put to use.

2. Cenvat Credit availed on purchase of fixed assets is reduced from the cost of respective assets.

3. Adjustments arising from foreign exchange rate fluctuation relating to liabilties atttributable to fixed assets are taken to the Profit and Loss account.

ii) Depreciation :

1. Depreciation on plant & machinery and factory building is provided on straight line method (SLM) at the rates specified in Schedule XIV to the Companies Act,1956.

2. Depreciation on other assets is provided on written down value method (WDV) at the rates specified in Schedule XIV to the Companies Act,1956.

3. Depreciation on fixed assets added / disposed off during the year is provided on pro - rata basis with reference to the month of addition /disposal.

(e) Investments

1. Investment intended to be held for not more than a year are classified as current Investment. These are valued at Lower of cost or fair value.

2. Long term Investments are stated at cost. Provision for diminution in value is made only if, in the opinion of management such a decline is other than temporary.

(f) Inventories

Items of inventories are measured at lower of cost or net realisable value. Cost of raw materials, stores & spares and packing materials is determined using first in first out (FIFO) method. Cost of work-in-process and finished goods is determined on absorption costing method.

(g) Research and development expenses

1. Revenue expenditure on research and development is charged to profit and loss account under respective heads of account in the year in which it is incurred.

2. Capital expenditure is included in fixed assets under the respective heads.

(h) Foreign exchange transactions

1. Transactions in foreign currency are recorded at the exchange rate prevailing as on the date of transaction.

2. Foreign currency assets / liabilities as on the balance sheet date are translated at the exchange rate prevailing on the date of balance sheet.

3. The exchange difference arising out of settlement and restatement of foreign currency monetary items including those arising on repayment and translation of liabilities relating to fixed assets are taken to statement of profit and loss account.

(i) Revenue recognition

1. Sales of products and services

Sales comprise of sale of goods and services, net of trade discounts and include excise duty.

2. Export benefits

The unutilised export benefits under DEPB Scheme / advance license against export as on the balance sheet date are recognised as income on accrual basis.

3. Dividend

Dividend is recognised when the company''s right to receive the payment is established .

4. Other Income

Other Income is accounted on accrual basis except where the receipt of income is uncertain, it is accounted on receipt basis.

(j) Employee Benefits :

1. Defined Contribution Plan : Company''s contribution paid/payable during the year to provident fund, ESIC and labour welfare fund are charged to statement of profit and loss account.

2. Defined Benefit Plan : Company''s liabilities towards gratuity and leave encashment are determined using the projected unit credit method which considers each period of service as giving rise to an additional unit of benefit entitlement and measures each unit separately to build up the final obligation. Past services are recognised on a straight line basis over the average period until the amended benefits become vested. Actuarial gain and losses are recognised immediately in the statement of Profit and Loss account as income or expense. Obligation is measured at the present value of estimated future cash flow using a discounted rate that is determined by the reference to market yields at the balance sheet date on government bonds where the currency and terms of government bonds are consistent with the currency and estimated terms of the defined benefit obligation.

(k) Excise and customs duty

1. Excise and customs duty payable in respect of finished goods lying at factory / bonded premises are provided for and included in the valuation of inventory.

2. CENVAT credit of Excise duty availed during the year is accounted for by reducing purchase cost of the materials and is adjusted against excise duty payable on clearance of goods produced.

(l) Borrowing Costs

Borrowing costs directly attributable to the acquisition or construction of fixed assets are capitalised as part of the cost of the assets,upto the date the asset is put to use. Other costs are charged to the Statement of Profit and Loss account in the year in which they are incurred.

(m) Prior period Items

Prior period expenses / income is accounted under the respective head of expenses / income account, material items, if any, are disclosed separately by way of a note.

(n) Earning per share

In accordance with the Accounting Standard -20 (AS-20) "Earning Per Share" issued by the Institute of Chartered Accountants of India, Earning per share is computed by dividing the profit after tax with the weighted average number of shares outstanding,at the year end.

(o) Income Tax

Tax expense comprises of current tax, deferred tax charge or credit. Current tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act. The deferred tax charged or credit is recognised using prevailing enacted or substantatively annexed tax rate where there is unabsorbed depreciation or carry forward losses, deferred tax assets are recognised only if there is virtual certainty of realisation of such assets. Other deferred tax assets are recognised only to the extent there is reasonable certainty of realisation in future. Deferred tax assets / liabilities are reviewed as at each Balance Sheet date based on developments during the period.

(p) Intangible assets

Intangible assets are recognised only when it is probable that the future economic benefits that are attributable to the asset will flow to the Company and the cost of such assets can be measured reliably. Intangible assets are stated at cost less accumulated amortization and impairment loss, if any. All costs relating to the acquisition are capitalized. Intangible assets are amortized over the useful life of the asset.

(q) Impairment of assets

An Asset is treated as impaired as and when the carrying cost of the asset exceeds its recoverable value. Recoverable amount is higher of an asset''s net selling price and its value in use. Value in use is the present value of estimated future cashflows expected to arise from the continuing use of the asset and from its disposal at the end of its useful life. Net selling price is the amount obtainable from sale of the asset in an arm''s length transaction between knowledgeable, willing parties , less cost of disposal. An impairment loss is charged off to the statement of Profit and Loss account in the year in which the asset is identified and impaired. The impaired loss recognised in prior accounting periods is reversed if there has been a change in the estimate of the recoverable value.

(r) Contingencies and provisions

A provision is recognised when the Company has a present obligation as a result of past event. It is probable that an outflow of resources embodying economic benefit will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on the best estimate of the expenditure required to settle the obligation at the balance sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimate.

(s) Other accounting policies

These are consistent with the generally accepted accounting practices.

a) Terms / Rights attached to Equity Shares

The Company has only one class of equity shares having a par value of Rs.10/- per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in the proportion to the number of equity shares held by the shareholders.

b) Terms of redemption of preference shares

55,80,000 10% Non Convertible Non Cumulative Redeemable Preference Shares of Rs.10 each are redeemable at par on 15th March, 2025 or at any time after one year from 31st March, 2012 at the option of the company.

10,00,000 10% Non Convertible Non Cumulative Redeemable Preference Shares of Rs. 10 each are redeemable at par on 28th June, 2019 or at any time after one year from 31st March, 2012 at the option of the company.

20,00,000 10% Non Convertible Non Cumulative Redeemable Preference Shares of Rs. 10 each are redeemable at par on 22nd June, 2019 or at any time after one year from 31st March, 2012 at the option of the company.

c) Shares held by holding/ultimate holding company and/or their subsidiaries/associates

None of the shares of the Company are held by the Subsidiaries, Associates or Joint Ventures of the Company.

(a) Term loans from Banks include Term Loan of Rs. 1,00,00,101/-(Balance Outstanding ) which carries interest base rate 3.50% p.a. and is repayable in 10 equal quarterly installments of Rs. 50 lacs from April, 2012. current maturities of Rs.1,00,00,101/- have been shown under current liabilities. The loan is secured by first mortgage charge on the company''s entire fixed assets on pari-passu basis with other working capital consortium banks and second charge on current assets of the company on pari-passu basis.

(b) Term loans from Banks include Term Loan of Rs. 2,66,45,713/- (Balance Outstanding) which carries interest base rate 3.50% p.a. and is repayable in 10 equal quarterly installments of Rs. 50 lacs from June, 2013. current maturities of Rs. 2,00,00,000/- have been shown under current liabilities The loan is secured by first mortgage charge on the company''s entire fixed assets on pari-passu basis with other working capital consortium banks and second charge on current assets of the company on pari-passu basis.

(c) Term loans from Banks include Term Loan of Rs. 2,11,08,302/-(Balance Outstanding) which carries interest base rate 3.50% p.a. and is repayable in 8 equal quarterly installments of Rs. 75 lacs from june, 2014, and Last Installment of Rs.50 lacs. current maturities of Rs. 2,11,08,302/-- have been shown under current liabilities The loan is secured by first mortgage charge on the company''s entire fixed assets on pari-passu basis with other working capital consortium banks and second charge on current assets of the company on pari- passu basis.

(d) Vehicle finance loan carries interest @ 10.73 to 12.40 % p.a. and is repayable in 35 equal monthly installments. The loans is secured by hypothecation of Vehicles.

( e) * Loans from others carries Interest @ 13.50% p.a. and is repayable in 10 equal quarterly Installments from December, 2013. The Loan is secured by personal guarantee and mortgage/ pledge of certain assets of promoters and directors

*Cash credit / Packing credit facilities availed from banks are secured by hypothecation of inventories and book debts (present and future) also second charge by way of mortgage on all immoveable properties and by way of hypothecation on all the moveable fixed assets of the company both present and future and guaranteed by director / promoter jointly and severally. The said facility is repayable on demand.

"The company has not received information from vendors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 ("the Act"), hence disclosures required to be made under the Act has not be given."


Mar 31, 2013

(a) Basis of preparation of financial statement.

The accounts have been prepared under the historical cost convention on the basis of going concern and comply in all material aspects with applicable accounting principles in India and relevant provisions of the companies Act,1956.

(b) System of accounting

The company follows the mercantile system of accounting and recognises income and expenditure on accrual basis.

(c) Uses of Estimates

The presentation of financial statements in conformity with the generally accepted accounting principles requires the management to make estimates and assumptions that affect the reported amount of assets and liabilities, revenues and expenses and disclosure of contingent liabilities. Such estimates and assumptions are based on management''s evaluation of relevant facts and circumstances as on the date of financial statements. The actual outcome may diverge from these estimates.

(d) Fixed Assets and Depreciation

i) Fixed Assets :

1. Fixed Assets are stated at cost of acquisition less accumulated depreciation. Cost is inclusive of borrowing cost, pilot plant batch expenses and other incidental charges incurred upto the date of installation /put to use.

2. Cenvat Credit availed on purchase of fixed assets is reduced from the cost of respective assets.

3. Adjustments arising from foreign exchange rate fluctuation relating to liabilties atttributable to fixed assets are taken to the Profit and Loss account.

ii) Depreciation :

1. Depreciation on plant & machinery and factory building is provided on straight line method (SLM) at the rates specified in schedule xiv to the companies act,1956

2. Depreciation on other assets is provided on written down value method (WDV) at the rates specified in schedule xiv to the companies act,1956

3. Depreciation on fixed assets added / disposed off during the year is provided on pro - rata basis with reference to the month of addition /disposal.

(e) Investments

1. Investment intended to be held for not more than a year are classified as current Investment. These are valued at lower of cost or fair value.

2. Long term Investments are stated at cost. Provision for diminution in value is made only if, in the opinion of management such a decline is other than temporary.

(f) Inventories

Items of inventories are measured at lower of cost or net realisable value. Cost of raw materials, stores & spares and packing materials is determined using first in first out (FIFO) method. Cost of work-in-process and finished goods is determined on absorption costing method.

(g) Research and development expenses

1. Revenue expenditure on research and development is charged to profit and loss account under respective heads of account in the year in which it is incurred.

2. Capital expenditure is included in fixed assets under the respective heads.

(h) Foreign exchange transactions

1. Transactions in foreign currency are recorded at the exchange rate prevailing as on the date of transaction.

2. Foreign currency assets / liabilities as on the balance sheet date are translated at the exchange rate prevailing on the date of balance sheet.

3. The exchange difference arising out of settlement and restatement of foreign currency monetary items including those arising on repayment and translation of liabilities relating to fixed assets are taken to statement of profit and loss account.

(i) Revenue recognition

1. Sales of products and services

Sales comprise of sale of goods and services, net of trade discounts and include excise duty.

2. Export benefits

The unutilised export benefits under DEPB scheme / advance license against export as on the balance sheet date are recognised as income on accrual basis.

3. Dividend

Dividend is recognised when the company''s right to receive the payment is established .

4. Other Income

Other Income is accounted on accrual basis except where the receipt of income is uncertain, it is accounted on receipt basis

(j) Employee benefits :

1. Defined contribution plan : Company''s contribution paid/payable during the year to provident fund, ESIC and labour welfare fund are charged to statement of profit and loss account.

2. Defined benefit plan : Company''s liabilities towards gratutity and leave encashment are determined using the projected unit credit method which considers each period of service as giving rise to an additional unit of benefit entitlement and measures each unit separately to build up the final obligation. Past services are recognised on a straight line basis over the average period until the amended benefits become vested. Actuarial gain and losses are recognised immediately in the statement of profit and loss account as income or expense. Obligation is measured at the present value of estimated future cash flow using a discounted rate that is determined by the reference to market yields at the balance sheet date on government bonds where the currency and terms of government bonds are consistent with the currency and estimated terms of the defined benefit obligation.

(k) Excise and customs duty

1. Excise and Customs duty payable in respect of finished goods lying at factory / bonded premises are provided for and included in the valuation of inventory.

2. CENVAT credit of excise duty availed during the year is accounted for by reducing purchase cost of the materials and is adjusted against excise duty payable on clearance of goods produced.

(l) Borrowing Costs

Borrowing costs directly attributable to the acquisition or construction of fixed assets are capitalised as part of the cost of the assets,upto the date the asset is put to use. Other costs are charged to the statement of profit and loss account in the year in which they are incurred.

(m) Prior Period Items

Prior period expenses / income is accounted under the respective head of expenses / income account, material items, if any, are disclosed separately by way of a note.

(n) Earning per share

In accordance with the Accounting Standard -20 (AS-20) "Earning Per Share" issued by the Institute of chartered accountants of india, earning per share is computed by dividing the profit after tax with the weighted average number of shares outstanding,at the year end.

(o) Income Tax

Tax expense comprises of current tax, deferred tax charge or credit. Current tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act. The deferred tax charged or credit is recognised using prevailing enacted or substantatively annexed tax rate where there is unabsorbed depreciation or carry forward losses, deferred tax assets are recognised only if there is virtual certainty of realisation such assets. Other deferred tax assets are recognised only to the extent there is reasonable certainity of realisation in future. Deferred tax assets / liabilities are reviewed as at each balance sheet date based on developments during the period.

(p) Intangible assets

Intangible assets are recognised only when it is probable that the future economic benefits that are attributable to the asset will flow to the company and the cost of such assets can be measured reliably. Intangible assets are stated at cost less accumulated amortization and impairment loss, if any. All costs relating to the acquisition are capitalized. Intangible assets are amortized over the useful life of the asset.

(q) Impairment of assets

An asset is treated as impaired as and when the carrying cost of the asset exceeds its recoverable value. Recoverable amount is higher of an asset''s net selling price and its value in use. Value in use is the present value of estimated future cashflows expected to arise from the continuing use of the asset and from its disposal at the end of its useful life. Net selling price is the amount obtainable from sale of the asset in an arm''s length transaction between knowledgeable, willing parties, less cost of disposal. An impairment loss is charged off to the statement of profit and loss account in the year in which the asset is identified and impaired. The impaired loss recognised in prior accounting periods is reversed if there has been a change in the estimate of the recoverable value.

(r) Contingencies and provisions

A provision is recognised when the company has a present obligation as a result of past event. It is probable that an outflow of resources embodying economic benefit will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on the best estimate of the expenditure required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimate.

(s) Other accounting policies

These are consistent with the generally accepted accounting practices.


Mar 31, 2012

(a) Basis of preparation of Financial statement.

The accounts have been prepared under the historical cost convention on the basis of going concern and comply in all material aspects with applicable accounting principles in India and relevant provisions of the Companies Act, 1956.

(b) System of accounting

The Company follows the Mercantile System of accounting and recognises Income and Expenditure on accrual basis.

(c) Uses of Estimates

The presentation of financial statements in conformity with the generally accepted accounting principles requires the management to make estimates and assumptions that affect the reported amount of assets and liabilities, revenues and expenses and disclosure of contingent liabilities. Such estimates and assumptions are based on management's evaluation of relevant facts and circumstances as on the date of financial statements. The actual outcome may diverge from these estimates.

(d) Fixed Assets and Depreciation

i) Fixed Assets:

1. Fixed Assets are stated at cost of acquisition less accumulated depreciation. Cost is inclusive of borrowing cost, pilot plant batch expenses and other incidental charges incurred upto the date of installation/put to use.

2. Cenvat Credit availed on purchase of fixed assets is reduced from the cost of respective assets.

3. Adjustments arising from foreign exchange rate fluctuation relating to liabilities attributable to fixed assets are taken to the Statement of Profit and Loss account.

ii) Depreciation :

1. Depreciation on Plant & Machinery and Factory Building is provided on Straight Line Method (SLM) at the rates specified in Schedule XIV to the Companies Act, 1956.

2. Depreciation on other assets is provided on Written Down Value Method (WDV) at the rates specified in Schedule XIV to the Companies Act, 1956.

3. Depreciation on Fixed Assets added/disposed off during the year is provided on pro - rata basis with reference to the month of addition/disposal.

(e) Investments

1. Investment intended to be held for not more than a year are classified as current Investment. These are valued at Lower of cost or fair value.

2. Long term Investments are stated at Cost. Provision for diminution in value is made only if, in the opinion of management such a decline is other than temporary.

(f) Inventories

Items of inventories are measured at lower of cost or net realisable value. Cost of Raw Materials, Stores & Spares and Packing Materials is determined using First in First out (FIFO) method. Cost of Work-in-Process and Finished Goods is determined on absorption costing method.

(g) Research and development expenses

1. Revenue Expenditure on Research and Development is charged to Statement of Profit and Loss Account under respective heads of account in the year in which it is incurred.

2. Capital Expenditure is included in Fixed Assets under the respective heads.

(h) Foreign Exchange Transactions

1. Transactions in foreign currency are recorded at the exchange rate prevailing as on the date of transaction.

2. Foreign currency assets/liabilities as on the balance sheet date are translated at the exchange rate prevailing on the date of balance sheet.

3. The exchange difference arising out of settlement and restatement of Foreign currency monetary items including those arising on repayment and translation of liabilities relating to fixed assets are taken to Statement of Profit and Loss account.

(i) Revenue Recognition

1. Sales of Products and Services

Sales comprise of sale of goods and services, net of trade discounts and include excise duty.

2. Export Benefits

The unutilised Export Benefits under DEPB Scheme/Advance License against export as on the balance sheet date are recognised as income on accrual basis.

3. Dividend

Dividend is recognised when the company's right to receive the payment is established.

4. Other Income

Other Income is accounted on accrual basis except where the receipt of income is uncertain, it is accounted on receipt basis.

(j) Employee Benefits :

1. Defined Contribution Plan : Company's contribution paid/payable during the year to Provident Fund, ESIC and Labour Welfare Fund are charged to statement of Profit and Loss Account.

2. Defined Benefit Plan : Company's liabilities towards gratuity and leave encashment are determined using the projected unit credit method which considers each period of service as giving rise to an additional unit of benefit entitlement and measures each unit separately to build up the final obligation. Past services are recognised on a straight line basis over the average period until the amended benefits become vested. Actuarial gain and losses are recognised immediately in the statement of Profit and Loss account as income or expense. Obligation is measured at the present value of estimated future cash flow using a discounted rate that is determined by the reference to market yields at the Balance Sheet date on Government bonds where the currency and terms of Government bonds are consistent with the currency and estimated terms of the defined benefit obligation.

(k) Excise and Customs duty

1. Excise and Customs duty payable in respect of Finished Goods lying at factory/bonded premises are provided for and included in the valuation of inventory.

2. CENVAT credit of Excise Duty availed during the year is accounted for by reducing purchase cost of the materials and is adjusted against excise duty payable on clearance of goods produced.

(I) Borrowing Costs

Borrowing costs directly attributable to the acquisition or construction of fixed assets are capitalised as part of the cost of the assets, upto the date the asset is put to use. Other costs are charged to the Statement of Profit and Loss account in the year in which they are incurred.

(m) Prior Period Items

Prior period expenses/income is accounted under the respective head of expenses/income account, Material items, if any, are disclosed separately by way of a note.

(n) Earning per share

In accordance with the Accounting Standard -20 (AS-20) "Earning Per Share" issued by the Institute of Chartered Accountants of India, earning per share is computed by dividing the profit after tax with the weighted average number of shares outstanding, at the year end.

(o) Income Tax

Tax expense comprises of current tax, deferred tax charge or credit. Current tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act. The deferred tax charged or credit is recognised using prevailing enacted or substantively annexed tax rate where there is unabsorbed depreciation or carry forward losses, deferred tax assets are recognised only if there is virtual certainty of realisation such assets. Other deferred tax assets are recognised only to the extent there is reasonable certainty of realisation in future. Deferred tax assets/liabilities are reviewed as at each Balance Sheet date based on developments during the period.

(p) Intangible Assets

Intangible assets are recognised only when it is probable that the future economic benefits that are attributable to the asset will flow to the Company and the cost of such assets can be measured reliably. Intangible assets are stated at cost less accumulated amortization and impairment loss, if any. All costs relating to the acquisition are capitalized. Intangible assets are amortized over the useful life of the asset.

(q) Impairment of Assets

An Asset is treated as impaired as and when the carrying cost of the asset exceeds its recoverable value. Recoverable amount is higher of an asset's net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of the asset and from its disposal at the end of its useful life. Net selling price is the amount obtainable from sale of the asset in an arm's length transaction between knowledgeable, willing parties, less cost of disposal. An impairment loss is charged off to the statement of Profit and Loss account in the year in which the asset is identified and impaired. The impaired loss recognised in prior accounting periods is reversed if there has been a change in the estimate of the recoverable value.

(r) Contingencies and Provisions

A provision is recognised when the Company has a present obligation as a result of past event. It is probable that an out flow of resources embodying economic benefit will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on the best estimate of the expenditure required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimate.

(s) Other Accounting Policies

These are consistent with the generally accepted accounting practices.


Mar 31, 2011

A) BASIS OF PREPARATION OF ACCOUNTS

The accounts have been prepared under the historical cost convention on the basis of going concern and comply in all material aspects with applicable accounting principles in India and relevant provisions of the Companies Act,1956.

b) SYSTEM OF ACCOUNTING

The Company follows the Mercantile System of accounting and recognises Income and Expenditure on accrual basis.

c) USE OF ESTIMATE

The presentation of financial statements in conformity with the generally accepted accounting principles requires the management to make estimates and assumptions that affect the reported amount of assets and liabilities, revenues and expenses and disclosure of contingent liabilities. Such estimates and assumptions are based on management's evaluation of relevant facts and circumstances as on the date of financial statements. The actual outcome may diverge from these estimates.

d) FIXED ASSETS AND DEPRECIATION

i) Fixed Assets :

1. Fixed Assets are stated at cost of acquisition less accumulated depreciation. Cost is inclusive of borrowing cost, pilot plant batch expenses and other incidental charges incurred upto the date of installation / put to use.

2. Cenvat Credit availed on purchase of fixed assets is reduced from the cost of respective assets.

3. Adjustments arising from foreign exchange rate fluctuation relating to liabilties atttributable to fixed assets are taken to the Profit and Loss account.

ii) Depreciation :

1. Depreciation on Plant & Machinery and Factory Building is provided on Straight Line Method (SLM) at the rates specified in Schedule XIV to the Companies Act,1956.

2. Depreciation on other assets is provided on Written Down Value Method (WDV) at the rates specified in Schedule XIV to the Companies Act,1956.

3. Depreciation on Fixed Assets added / disposed off during the year is provided on pro - rata basis with reference to the month of addition /disposal.

e) INVESTMENTS

Investment intended to be held for not more than a year are classified as current Investment. These are valued at Lower of cost or fair value.

Long term Investments are stated at Cost. Provision for diminution in value is made only if, in the opinion of management such a decline is other than temporary.

f) INVENTORIES

Items of inventories are measured at lower of cost or net realisable value. Cost of Raw Materials, Stores & Spares and Packing Materials is determined using First in First out (FIFO) method. Cost of Work-in-Process and Finished Goods is determined on absorption costing method.

g) RESEARCH AND DEVELOPMENT EXPENSES

1) Revenue Expenditure on Research and Development is charged to Profit and Loss Account under respective heads of account in the year in which it is incurred.

2) Capital Expenditure is included in Fixed Assets under the respective heads. h) FOREIGN EXCHANGE TRANSACTIONS

1) Transactions in foreign currency are recorded at the exchange rate prevailing as on the date of transaction.

2) Foreign currency assets / liabilities as on the balance sheet date are translated at the exchange rate prevailing on the date of balance sheet.

3) The exchange difference arising out of settlement and restatement of Foregin currency monetary items including those arising on repayment and translation of liabilities relating to fixed assets are taken to Profit and Loss account.

i) REVENUE RECOGNITION

1. Sales of Products and Services

Sales comprise of sale of goods and services, net of trade discounts and include excise duty.

2. Export Benefits

The unutilised Export Benefits under DEPB Scheme / Advance License against export as on the balance sheet date are recognised as income on accrual basis.

3. Dividend

Dividend is recognised when the company's right to receive the payment is established . Dividend from subsidiaries is recognised even if same are declared after the balance sheet date but pertains to period on or before the date of balance sheet as per the requirment of schedule VI of the Compaines Act, 1956.

4. Other Income

Other Income is accounted on accrual basis except where the receipt of income is uncertain in which case it is accounted on receipt basis.

j) Employee Benefits :

a) Defined Contribution Plan : Company's contribution paid / payable during the year to Provident Fund, ESIC and Labour Welfare Fund are charged to Profit and Loss Account.

b) Defined Benefit Plan : Company's liabilities towards gratutity and leave encashment are determined using the projected unit credit method which considers each period of service as giving rise to an additional unit of benefit entitlement and measures each unit separately to build up the final obligation. Past services are recognised on a straight line basis over the average period until the amended benefits become vested. Actuarial gain and losses are recognised immediately in the statement of Profit and Loss account as income or expense. Obligation is measured at the present value of estimated future cash flow using a discounted rate that is determined by the reference to market yields at the Balance Sheet date on Government bonds where the currency and terms of Government bonds are consistent with the currency and estimated terms of the defined benefit obligation.

k) EXCISE AND CUSTOMS DUTY

1. Excise and Customs duty payable in respect of Finished Goods lying at factory / bonded premises are provided for and included in the valuation of inventory.

2. CENVAT credit of Excise Duty availed during the year is accounted for by reducing purchase cost of the materials and is adjusted against excise duty payable on clearance of goods produced.

l) BORROWING COSTS

Borrowing costs directly attributable to the acquisition or construction of fixed assets are capitalised as part of the cost of the assets, upto the date the asset is put to use. Other costs are charged to the Profit and Loss account in the year in which they are incurred.

m) PRIOR PERIOD ITEMS

Prior period expenses / income is accounted under the respective head of expenses / income account, Material items, if any, are disclosed separately by way of a note.

n) EARNING PER SHARE

In accordance with the Accounting Standard -20 (AS-20) "Earning Per Share" issued by the Institute of Chartered Accountants of India, earning per share is computed by dividing the profit after tax with the weighted average number of shares outstanding, at the year end.

o) INCOME TAX

Tax expense comprises of current tax, deferred tax charge or credit. Current tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act. The deferred tax charged or credit is recognised using prevailing enacted or substantatively annexed tax rate where there is unabsorbed depreciation or carry forward losses, deferred tax assets are recognised only if there is virtual certainty of realisation such assets. Other deferred tax assets are recognised only to the extent there is reasonable certainity of realisation in future. Deferred tax assets / liabilities are reviewed as at each Balance Sheet date based on developments during the period.

p) INTANGIBLE ASSETS

Intangible assets are recognised only when it is probable that the future economic benefits that are attributable to the asset will flow to the Company and the cost of such assets can be measured reliably. Intangible assets are stated at cost less accumulated amortization and impairment loss, if any. All costs relating to the acquisition are capitalized. Intangible assets are amortized over the useful life of the asset.

q) IMPAIRMENT OF ASSETS

An asset is impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the Profit and Loss account in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting periods is reversed, if there has been a change in the estimate or recoverable amount.

r) CONTINGENCIES AND PROVISIONS

A provision is recognised when the Company has a present obligation as a result of past event. It is probable that an outflow of resources embodying economic benefit will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on the best estimate of the expenditure required to settle the obligation at the balance sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimate.

s) OTHER ACCOUNTING POLICIES

These are consistent with the generally accepted accounting practices.


Mar 31, 2010

A) BASIS OF PREPARATION OF ACCOUNTS

The accounts have been prepared under the historical cost convention on the basis of going concern and comply in all material aspects with applicable accounting principles in India and relevant provisions of the Companies Act,1956.

b) SYSTEM OF ACCOUNTING

The Company follows the Mercantile System of accounting and recognises Income and Expenditure on accrual basis.

c) USE OF ESTIMATE

The presentation of financial statements in conformity with the generally accepted accounting principles requires the management to make estimates and assumptions that affect the reported amount of assets and liabilities, revenues and expenses and disclosure of contingent liabilities. Such estimates and assumptions are based on managements evaluation of relevant facts and circumstances as on the date of financial statements. The actual outcome may diverge from these estimates.

d) FIXED ASSETS AND DEPRECIATION

i) Fixed Assets :

1. Fixed Assets are stated at cost of acquisition less accumulated depreciation. Cost is inclusive of borrowing cost, pilot plant batch expenses and other incidental charges incurred upto the date of installation /put to use.

2. Cenvat Credit availed on purchase of fixed assets is reduced from the cost of respective assets.

3. Adjustments arising from foreign exchange rate fluctuation relating to liabilties atttributable to fixed assets are taken to the Profit and Loss account.

ii) Depreciation :

1. Depreciation on Plant & Machinery and Factory Building is provided on Straight Line Method (SLM) at the rates specified in Schedule XIV to the Companies Act, 1956.

2. Depreciation on other assets is provided on Written Down Value Method (WDV) at the rates specified in Schedule XIV to the Companies Act, 1956.

3. Depreciation on Fixed Assets added / disposed off during the year is provided on pro - rata basis with reference to the month of addition /disposal.

e) INVESTMENTS

Investment intended to be held for not more than a year are classified as current Investment. These are valued at Lower of cost and fair value.

Long term Investments are stated at Cost. Provision for diminution in value is made only if, in the opinion of management such a decline is other than temporary.

f) INVENTORIES

Items of inventories are measured at lower of cost or net realisable value. Cost of Raw Materials, Stores & Spares and Packing Materials is determined using First in First out (FIFO) method. Cost of Work-in-Process and Finished Goods is determined on absorption costing method.

g) RESEARCH AND DEVELOPMENT EXPENSES

1) Revenue Expenditure on Research and Development is charged to Profit and Loss Account under respective heads of account in the year in which it is incurred.

2) Capital Expenditure is included in Fixed Assets under the respective heads. h) FOREIGN EXCHANGE TRANSACTIONS

1) Transactions in foreign currency are recorded at the exchange rate prevailing as on the date of transaction.

2) Foreign currency assets /liabilities as on the balance sheet date are translated at the exchange rate prevailing on the date of balance sheet.

3) The exchange difference arising out of settlement and restatement of Foregin currency monetary items including those arising on repayment and translation of liabilities relating to fixed assets are taken to Profit and Loss account.

i) REVENUE RECOGNITION

1. Sales of Products and Services

Sales comprise of sale of goods and services, net of trade discounts and include excise duty.

2. Export Benefits

The unutilised Export Benefits under DEPB Scheme / Advance License against export as on the balance sheet date are recognised as income on accrual basis.

3. Dividend

Dividend is recognised when the companys right to receive the payment is established. Dividend from subsidiaries is recognised even if same are declared after the balance sheet date but pertains to period on or before the date of balance sheet as per the requirment of schedule VI of the Compaines Act, 1956.

4. Other Income

Other Income is accounted for on accrual basis except where the receipt of income is uncertain in which case it is accounted for on receipt basis. j) Employee Benefits :

1) Defined Contribution Plan : Companys contribution paid/payable during the year to Provident Fund, ESIC and Labour Welfare Fund are charged to Profit and Loss Account.

2) Defined Benefit Plan : Companys liabilities towards gratutity and leave encashment are determined using the projected unit credit method which considers each period of service as giving rise to an additional unit of benefit entitlement and measures each unit separately to build up the final obligation. Past services are recognised on a straight line basis over the average period until the amended benefits become vested. Actuarial gain and losses are recognised immediately in the statement of Profit and Loss account as income or expense. Obligation is measured at the present value of estimated future cash flow using a discounted rate that is determined by the reference to market yields at the Balance Sheet date on Government bonds where the currency and terms of Government bonds are consistent with the currency and estimated terms of the defined benefit obligation.

k) EXCISE AND CUSTOMS DUTY

1. Excise and Customs duty payable in respect of Finished Goods lying at factory / bonded premises are provided for and included in the valuation of inventory.

2. CENVAT credit of Excise Duty availed during the year is accounted for by reducing purchase cost of the materials and is adjusted against excise duty payable on clearance of goods produced.

I) BORROWING COSTS

Borrowing costs directly attributable to the acquisition or construction of fixed assets are capitalised as part of the cost of the assets, upto the date the asset is put to use. Other costs are charged to the Profit and Loss account in the year in which they are incurred.

m) PRIOR PERIOD ITEMS

Prior period expenses/ income is accounted underthe respective head of expenses/ income account, Material items, if any, are disclosed separately by way of a note.

n) EARNING PER SHARE

In accordance with the Accounting Standard-20 (AS-20) "Earning Per Share" issued by the Institute of Chartered Accountants of India, Earning per share is computed by dividing the profit after tax with the weighted average number of shares outstanding,at the year end.

o) INCOME TAX

Tax expense comprises of current tax, deferred tax charge or credit. Current tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act. The deferred tax charged or credit is recognised using prevailing enacted or substantatively annexed tax rate where there is unabsorbed depreciation or carry forward losses, deferred tax assets are recognised only if there is virtual certainty of realisation such assets. Other deferred tax assets are recognised only to the extent there is reasonable certainity of realisation in future. Deferred tax assets / liabilities are reviewed as at each Balance Sheet date based on developments during the period.

p) INTANGIBLE ASSETS

Intangible assets are recognised only when it is probable that the future economic benefits that are attributable to the asset will flow to the Company and the cost of such assets can be measured reliably. Intangible assets are stated at cost less accumulated amortization and impairment loss, if any. All costs relating to the acquisition are capitalized. Intangible assets are amortized over the useful life of the asset.

q) IMPAIRMENT OF ASSETS

An asset is impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the Profit and Loss account in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting periods is reversed, i* there has been a change in the estimate or recoverable amount.

r) CONTINGENCIES AND PROVISIONS

A provision is recognised when the Company has a present obligation as a result of past event. It is probable that an outflow of resources embodying economic benefit will be required to settle the obligation in respect of which a reliable estimate can be made, provisions are not discounted to its present value and are determined based on the best estimate of the expenditure required to settle the obligation at the balance sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimate.

s) OTHER ACCOUNTING POLICIES

These are consistent with the generally accepted accounting practices.

 
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