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Accounting Policies of Lakshmi Energy & Foods Ltd. Company

Mar 31, 2015

I. BASIS OF PREPARATION OF FINANCIAL STATEMENTS:

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013/Companies Act, 1956 as applicable. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies have been consistently applied by the Company and are consistent with those followed in the previous year.

Accounting policies not specifically referred to otherwise are consistently applied by the company and are in consonance with generally accepted accounting principles recognized in the form of accounting standards.

II. USE OF ESTIMATES

The preparation of the financial statements in conformity with Indian GAAP requires the Management to make judgments, estimates and assumptions that affect the application of accounting policies and reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. Examples of such estimates include transfer pricing related adjustments, provision against litigations and regulatory actions, provision of future obligation under employee benefit plans, useful lives of fixed assets, provision in respect of non-current investments, provision for sales return, recoverability of tax assets, provision for customer claims, provision for inventory obsolescence and impairment of assets. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognized in the periods in which the results are known/materialize. Any revision to accounting estimates is recognized prospectively in the current and future periods.

III. REVENUE RECOGNITION

Revenue is recognized to the extent it can be reliably measured and probable that economic benefits will flow to the company. Revenues considered receivable are accounted for on accrual basis except for the Disposal of Sundry items & Scraps etc., which are accounted for on cash basis.

SALES

Revenue from sale of goods is recognized when the significant risk and reward of ownership of the goods are transferred to the customer and are recognized net of claims. Sales are stated net of sales returns and indirect taxes.

INTEREST

Income is recognized on a time proportion basis taking into account outstanding amount and the applicable rate of interest.

DIVIDEND

Income from dividend is recognized when the right to dividend has been established.

OTHER OPERATING INCOME

Other operating revenue is recognized on accrual basis.

IV. CURRENT/ NON-CURRENT CLASSIFICATION

All assets and liabilities have been classified as current or non-current as per the Company's normal operating cycle and other criteria set out in the Revised Schedule III to the Companies Act, 2013.

Assets

An asset is classified as current when it satisfies any of the following criteria:

a. it is expected to be realised in, or is intended for sale or consumption in, the Company's normal operating cycle;

b. it is held primarily for the purpose of being traded;

c. it is expected to be realised within 12 months after the reporting date; or

d. it is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting date.

Liabilities

A liability is classified as current when it satisfies any of the following criteria:

a. it is expected to be settled in the Company's normal operating cycle;

b. it is held primarily for the purpose of being traded;

c. it is due to be settled within 12 months after the reporting date; or

d. the Company does not have an unconditional right to defer settlement of the liability for at least 12 months after the reporting date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

Current assets/ liabilities include the current portion of non-current financial assets/ liabilities respectively. All other assets/ liabilities are classified as non-current.

Operating cycle

Based on the nature of products/activities of the Company and the normal time between acquisition of assets and their realization in cash or cash equivalents, the company has determined its operating cycle as 12 months for the purpose of classification of its assets and liabilities as current and non-current.

V. Fixed Assets (Tangible/Intangible)

Fixed assets are stated at cost of acquisition or construction [including directly attributable expenditure on making the asset ready for its intended use, other incidental expenses and interest on borrowings attributable to acquisition of qualifying fixed assets upto the date the asset is ready for its intended use, less accumulated depreciation, impairment losses and specific grants received, if any] except assets revalued on 31st March, 1999. In respect of projects involving institutional loans, related pre-operative and pre-operational expenses like up-front fees and appraisal fees have been capitalized. Interest paid on loans borrowed from institutions, which are attributable to construction or acquisition of fixed assets for the period up to the completion of construction or acquisition of fixed assets, has also been capitalized.

Subsequent expenditures related to an item of fixed asset are added to its book value only if such expenditure results in an increase in the future benefits from such asset beyond its previously assessed standard of performance. Losses arising from the retirement of or gains or losses arising from disposal of fixed assets are recognized in the Statement of Profit and Loss.

BORROWING COSTS

Borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets are capitalized as part of the cost of such assets. Other borrowing costs are recognized as an expense in the period in which they are incurred.

REVALUTION OF FIXED ASSETS

All fixed assets of the company were revalued on 31st March 1999 as per the valuation report of Chartered Engineers / approved valuers.

As and when the fixed assets are revalued, the provision for depreciation on such revalued fixed assets is adjusted, wherever applicable, in order to make allowance for the consequent additional diminution in the value.

DEPRECIATION

Depreciation on fixed assets has been provided on the straight line method as per the useful life prescribed in Schedule II to the Companies Act, 2013.

VI. IMPAIRMENT OF ASSETS

As per the Accounting Standard-28 ' 'Impairment of Assets" (AS-28) issued by the Institute of Chartered Accountants of India, impairment is ascertained at each balance sheet date in respect of each of the company's fixed assets. An impairment loss will be recognized whenever the carrying amount of an asset exceeds its estimated recoverable amount. The recoverable amount is the greater of the asset's net selling price and value in use. In assessing the value in use, the estimated future cash flows are discounted to their present value based on an appropriate discount factor.

VII. INVESTMENTS

i. Investments that are readily realizable and intended to be held for not more than a year are classified as current investments. All other investments are classified as Non-current investments.

ii. Non-current investments are carried at cost. However, provision for diminution in value is made to recognize a decline, other than temporary, in the value of investments, on an individual basis.

iii. Current Investments are carried at the lower of cost and fair value determined on a category-wise basis.

VIII. VALUATION OF INVENTORIES

The inventories are recorded as under:

i. Raw Materials Components, At Cost or net realizable value Stores & Spare parts & whichever is less. Packing Material.

ii. Finished Goods. At Cost or net realizable value whichever is less.

iii. Goods in Progress. At Estimated Cost.

iv. By-Products. At Estimated Cost

Cost of inventories is computed on a weighted average basis.

IX. CASH AND CASH EQUIVALENTS

Cash and cash equivalents comprise cash balances on hand, cash balance with bank, and liquid investments with original maturities, at the date of purchase/ investment, of three months or less.

X. FOREIGN CURRENCY TRANSACTIONS

Transactions in foreign currency are recorded at the original rates of exchange in force at the time the transactions are affected. In case of forward contracts, if any, the difference between the forward rates and the exchange rates on the transaction dates is recognized as income or expense over the tenure of the related contracts.

The profit / loss arising out of the cancellation or renewal of forward exchange contracts are recorded as income/ expense for the period.

At the year end, monetary items demonetized in foreign currency are reported using the closing rates of exchange. Exchange rate differences arising on realization / payment of foreign exchange are accounted in the year of realisation / payment.

XI. EMPLOYEE / RETIREMENT BENEFITS

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

ii. Contributions to Defined Contribution Plans (Employees Provident Fund and Employees State Insurance Scheme) are made in accordance with the respective statutes, to the extent applicable, and are recognized as an expense in the period in which the employees have rendered service.

iii. Liability for defined benefit plans is recognized based on provisions of relevant applicable statutes and company policies in the year in which the employees have rendered service.

XII. ACCOUNTING FOR TAXES ON INCOME

i. Current tax is the amount of Income Tax payable on taxable income determined as per the provisions of Income Tax Act, 1961.

Minimum Alternate Tax (MAT) credit is accounted for by the company in the case where MAT payable is higher than tax payable under normal provisions of the Income Tax Act, 1961. Such credit availed is adjusted in future years where the tax under normal provisions is higher than MAT payable to the extent of such difference.

ii. The difference that results between the profit offered for income tax and the profit as per the financial statements is identified and, thereafter, a deferred tax asset or deferred tax liability is recorded for timing differences, namely the differences that originate in one accounting period and reverse in another, based on the tax effect of the aggregate amount being considered.

iii. The carrying amount of the deferred tax assets are reviewed at each balance sheet date. The company writes down the carrying amount of a deferred tax asset to the extent that it is no longer reasonable certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realized. Any such written down carrying amount is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available.

XIII. ACCOUNTING FOR PROVISIONS, CONTINGENT LIABILITES AND CONTINGENT ASSETS

Provisions are recognized in terms of Accounting Standard-29 "Provisions, Contingent Liabilities and Contingent Assets" (AS-29) issued by the Institute of Chartered Accountants of India, when there is a present legal or statutory obligation as a result of past events, where it is probable that there will be outflow of resources to settle the obligation and a reliable estimate of the amount of the obligation can be made.

Contingent liabilities are recognized only when there is a possible obligation arising from past events due to occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the company or where any present obligation cannot be measured in terms of future outflow of resources or where a reliable estimate of the obligation cannot be made. Obligations are assessed on an ongoing basis and only those having a largely probable outflow of resources are provided for.

Contingent assets are not recognised in the financial statements.

XIV. LEASE AGREEMENTS

The Company's significant leasing arrangements are in respect of operating leases for premises (office, stores, go downs etc.) These leasing arrangements which are not non-cancellable range between 6 months and 1 year generally or longer and are usually renewable by mutual consent on mutually agreeable terms. The aggregate lease rentals payable are charged as Rent/ Storage Charges in the Statement of Profit and Loss on a straight line basis over the lease term.

XIV. EARNING PER SHARE

In determining the earning per share, the company considers the net profit after tax. The number of shares used in computing basic earnings per share is the weighted average number of shares outstanding during the year.

XV. FINANCIAL AND MANAGEMENT INFORMATION SYSTEMS

The books of accounts and other records have been designed to facilitate compliance with the relevant provisions of the Companies Act, 1956 on one and and meet the internal requirements of information and systems for planning, review and internal control on the other.

XVI. SEGMENT REPORTING

The accounting policies adopted for segment reporting are in conformity with the accounting policies adopted by the Company. Further,

a. Inter segment revenue has been accounted for based on the transaction price agreed to between segments which is primarily market based

b. Revenue and expenses have been identified to segments on the basis of their relationship to the operating activities of the segment.




Mar 31, 2014

I. BASIS OF PREPARATION OF FINANCIAL STATEMENTS:

i. The financial statements have been prepared and presented under the historical cost convention on the accrual basis of accounting and on the accounting principles of going concern except as stated hereinafter and except where impairment of assets is made and revaluation of assets is carried out, in accordance with all the applicable accounting principles generally accepted in India and comply with the mandatory applicable accounting standards notified under Sub-Section (3C) of Section 211 of the Companies Act, 1956 and other relevant provisions of the Companies Act, 1956 and the rules, regulations and guidelines made there under.

ii. Accounting policies not specifically referred to otherwise are consistently applied by the company and are in consonance with generally accepted accounting principles recognized in the form of accounting standards.

iii. The Board of Directors of the company approved the change in the financial year of the Company from October- September to April- March effective April 01 2014. In view of this, the current financial year is for a period of 18 months i.e. 01 October 2012 to 31 March, 2014.

II. USE OF ESTIMATES

The preparation of financial statements in conformity with Generally Accepted Accounting Principles (GAAP) requires management to make judgments, estimates and assumptions that affect the application of accounting policies and reported amounts of assets, liabilities, income and expenses and disclosure of contingent liabilities on the date of the financial statements. Examples of such estimates include transfer pricing related adjustments, provision against litigations and regulatory actions, provisions of future obligation under employee benefit plans, useful lives of fixed assets, provision in respect of non-current investments, provision for sales return, recoverability of tax assets, provision for customer claims, provision for inventory obsolescence including expiry of drugs and impairment of assets. Actual results could differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Any revision to accounting estimates is recognized prospectively in the current and future periods.

III. REVENUE RECOGNITION

Revenues recognized to the extent it can be reliably measured and is probable that economic benefits will flow to the company. Revenues are considered receivable are accounted for on accrual basis except for the Disposal of Sundry items & Scraps etc., which are accounted for on cash basis:

SALES

Revenue from sales of goods is recognized when the significant risk and reward of ownership of the goods are transferred to the customer. Sales are stated net of sales returns and indirect taxes.

INTEREST

Income is recognized on a time proportion basis taking into account outstanding amount and the applicable rate of interest.

DIVIDEND

Income from dividend is recognized when the right to dividend has been established.

OTHER OPERATING INCOME

Other operating revenue is recognized on accrual basis.

IV. CURRENT/ NON-CURRENT CLASSIFICATION

All assets and liabilities have been classified as current or non-current as per the Company''s normal operating cycle and other criteria set out in the Revised Schedule VI to the Companies Act, 1956.

Assets

An asset is classified as current when it satisfies any of the following criteria:

a. it is expected to be realised in, or is intended for sale or consumption in, the Company''s normal operating cycle;

b. it is held primarily for the purpose of being traded;

c. it is expected to be realised within 12 months after the reporting date; or

d. it is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting date.

Liabilities

A liability is classified as current when it satisfies any of the following criteria:

a. it is expected to be settled in the Company''s normal operating cycle;

b. it is held primarily for the purpose of being traded;

c. it is due to be settled within 12 months after the reporting date; or

d. the Company does not have an unconditional right to defer settlement of the liability for at least 12 months after the reporting date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

Current assets/ liabilities include the current portion of non-current financial assets/ liabilities respectively. All other assets/ liabilities are classified as non-current.

Operating cycle

Operating cycle is the time between the acquisition of assets for processing and their realisation in cash or cash equivalents.

V. FIXED ASSETS

Fixed assets are stated at cost of acquisition or construction [including attributable interest and financial costs till such assets are ready for intended use, less accumulated depreciation, impairment losses and specific grants received, if any] except assets revalued on 31st March, 1999. In respect of projects involving institutional loans, related pre-operative and pre-operational expenses like up-front fees and appraisal fees have been capitalized. Interest paid on loans borrowed from institutions, which are attributable to construction or acquisition of fixed assets for the period up to the completion of construction or acquisition of fixed assets, has also been capitalized.

TANGIBLE FIXED ASSETS AND DEPRECIATION

Tangible fixed assets are stated at the cost of acquisition or construction, less accumulated depreciation and impairment losses, if any. The cost of an item of tangible fixed asset comprises its purchase price, including import duties and other non-refundable taxes or levies and any attributable costs of bringing the asset to its working condition for its intended use.

INTANGIBLE ASSETS AND AMORTIZATION

Intangible fixed assets comprise brands, trademarks and computer software, which are stated at cost less accumulated amortization and impairment losses, if any. The cost of an item of intangible fixed asset comprises its purchase price, including import duties and other non-refundable taxes or levies and any attributable costs of bringing the asset to its working condition for its intended use. Any trade discount and rebates are deducted in arriving at the purchase price.

BORROWING COSTS

Borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets are capitalized till the month in which each asset is put to use as part of the cost of asset.

REVALUTION OF FIXED ASSETS

All fixed assets of the company were revalued on 31st March 1999 as per the valuation report of Chartered Engineers / approved valuers.

As and when the fixed assets are revalued, the provision for depreciation on such revalued fixed assets is adjusted, wherever applicable, in order to make allowance for the consequent additional diminution in the value.

DEPRECIATION

Depreciation is provided, pro-rata, on Straight Line Method by applying rates and in the manner as given in Schedule XIV of the Companies Act, 1956.

As per the Accounting Standard-6 "Depreciation Accounting" (AS-6) issued by the Institute of Chartered Accountants of India, depreciation on revalued assets has been adjusted with the revaluation reserve amount.

Depreciation on Power plant was claimed as usual as per "As-6"issued by ICAI.

VI. IMPAIRMENT OF ASSETS

As per the Accounting Standard-28 "Impairment of Assets" (AS-28) issued by the Institute of Chartered Accountants of India, impairment is ascertained at each balance sheet date in respect of each of the company''s fixed assets. An impairment loss will be recognized whenever the carrying amount of an asset exceeds its estimated recoverable amount. The recoverable amount is the greater of the asset''s net selling price and value in use. In assessing the value in use, the estimated future cash flows are discounted to their present value based on an appropriate discount factor.

VII. INVESTMENTS

i. Investments that are readily realizable and intended to be held for not more than a year are classified as current investments. All other investments are classified as long term investments.

ii. Long term investments are carried at cost. However, provision for diminution in value is made to recognize a decline, other than temporary, in the value of investments, on an individual basis.

iv. Current Investments are carried at the lower of cost and fair value determined on a category-wise basis.

IX. CASH AND CASH EQUIVALENTS

Cash and cash equivalents comprise cash balances on hand, cash balance with bank, and highly liquid investments with original maturities, at the date of purchase/ investment, of three months or less.

X. FOREIGN CURRENCY TRANSACTIONS

Transactions in foreign currency are recorded at the original rates of exchange in force at the time the transactions are affected. In case of forward contracts, if any, the difference between the forward rates and the exchange rates on the transaction dates is recognized as income or expense over the tenure of the related contracts.

The profit / loss arising out of the cancellation or renewal of forward contracts are recorded as income / expense for the period.

At the year end, monetary items demonetized in foreign currency are reported using the closing rates of exchange. Exchange rate differences arising on realization / payment of foreign exchange are accounted in the year of realisation / payment.

XI. EMPLOYEE / RETIREMENT BENEFITS

i. Contribution to defined provident fund schemes are being charged to Revenue on accrual basis.

ii. The company is regularly making contributions to provident fund schemes, to the extent as applicable to the company.

iii. Gratuity is being provided as required as per actuarial valuation.

XII. TAXATION

i. Income tax is computed in accordance with Accounting Standard-22 "Accounting for Taxes on Income" (AS-22) issued by the Institute of Chartered Accountants of India.

ii. Provision is made for income tax annually based on the tax liability computed after considering tax allowances and exemptions.

iii. The difference that results between the profit offered for income tax and the profit as per the financial statements is identified and, thereafter, a deferred tax asset or deferred tax liability is recorded for timing differences, namely the differences that originate in one accounting period and reverse in another, based on the tax effect of the aggregate amount being considered.

iv. The carrying amount of the deferred tax assets are reviewed at each balance sheet date. The company writes down the carrying amount of a deferred tax asset to the extent that it is no longer reasonable certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realized. Any such written down carrying amount is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available.

XIII. PROVISIONS

A provision is recognised if, as a result of a past event, the Company has a present obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are recognised at the best estimate of the expenditure required to settle the present obligation at the Balance Sheet date. The provisions are measured on an undiscounted basis.

XIV. RESEARCH AND DEVELOPMENT

Revenue expenditure on research and development is charged out in the year in which it is incurred. Expenditure which results in creation of assets is included in fixed assets and depreciation is provided thereon on such assets, as applicable.

XV. ACCOUNTING FOR PROVISIONS, CONTINGENT LIABILITES AND

CONTINGENT ASSETS

Provisions are recognized in terms of Accounting Standard-29 "Provisions, Contingent Liabilities and Contingent Assets" (AS-29) issued by the Institute of Chartered Accountants of India, when there is a present legal or statutory obligation as a result of past events, where it is probable that there will be outflow of resources to settle the obligation and a reliable estimate of the amount of the obligation can be made.

Contingent liabilities are recognized only when there is a possible obligation arising from past events due to occurrence or non- occurrence of one or more uncertain future events not wholly within the control of the company or where any present obligation cannot be measured in terms of future outflow of resources or where a reliable estimate of the obligation cannot be made. Obligations are assessed on an ongoing basis and only those having a largely probable outflow of resources are provided for.

Contingent assets are not recombined in the financial statements.

XVI. LEASE AGREEMENTS

The Company''s significant leasing arrangements are in respect of operating leases for premises (office, stores, godowns etc.) These leasing arrangements which are not non-cancellable range between 6 months and 1 year generally or longer and are usually renewable by mutual consent on mutually agreeable terms. The aggregate lease rentals payable are charged as Rent/ Storage Charges in the statement of Profit and Loss.

XVI. EARNING PER SHARE

In determining the earning per share, the company considers the net profit after tax. The number of shares used in computing basic earnings per share is the weighted average number of shares outstanding during the period.

XVIII. FINANCIAL AND MANAGEMENT INFORMATION SYSTEMS

The books of accounts and other records have been designed to facilitate compliance with the relevant provisions of the Companies Act, 1956 on one hand and meet the internal requirements of information and systems for planning, review and internal control on the other.


Sep 30, 2012

I. BASIS OF PREPARATION:

i. The financial statements have been prepared and presented under the historical cost convention on the accrual basis of accounting and on the accounting principles of going concern except as stated hereinafter and except where impairment of assets is made and revaluation of assets is carried out, in accordance with all the applicable accounting principles generally accepted in India and comply with the mandatory applicable accounting standards notified under Sub-Section (3C) of Section 211 of the Companies Act, 1956 and other relevant provisions of the Companies Act, 1956 and the rules, regulations and guidelines made thereunder.

ii. Accounting policies not specifically referred to otherwise are consistently applied by the company and are in consonance with generally accepted accounting principles recognized in the form of accounting standards.

II. REVENUE RECOGNITION

Expenses and Income considered payable and receivable respectively are accounted for on accrual basis except for the following items, which are accounted for on cash basis:

Disposal of Sundry items & Scraps etc.

III. SALES

i Sales are net of returns and shortage allowed to customers.

ii. Consignment Sales are recognized on confirmation from consignees.

IV. FIXED ASSETS

Fixed assets are stated at cost of acquisition or construction [including attributable interest and financial costs till such assets are ready for intended use, less accumulated depreciation, impairment losses and specific grants received, if any] except assets revalued on 31st March, 1999. In respect of projects involving institutional loans, related pre-operative and pre-operational expenses like up-front fees and appraisal fees have been capitalized. Interest paid on loans borrowed from institutions, which are attributable to construction or acquisition of fixed assets for the period up to the completion of construction or acquisition of fixed assets, has also been capitalized.

V. BORROWING COSTS

Borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets are capitalized till the month in which each asset is put to use as part of the cost of asset.

VI. REVALUTION OF FIXED ASSETS

All fixed assets of the company were revalued on 31" March 1999 as per the valuation report of Chartered Engineers / approved valuers.

As and when the fixed assets are revalued, the provision for depreciation on such revalued fixed assets is adjusted, wherever applicable, in order to make allowance for the consequent additional diminution in the value.

VII. DEPRECIATION

i. Depreciation is provided, pro-rata, on Straight Line Method by applying rates and in the manner as given in Schedule XIV of the Companies Act, 1956.

ii. As per the Accounting Standard-6 "Depreciation Accounting" (AS-6) issued by the Institute of Chartered Accountants of India, depreciation on revalued assets has been adjusted with the revaluation reserve amount.

iii. Depreciation on Power plant was claimed as usual as per "AS-6"issued by ICAI. As power plant was in operation during the year resulting 20684000 units of electricity, Out of which 30% units were sold and 70% units were captively consumed by the company.

VIII. IMPAIRMENT OFASSETS

As per the Accounting Standard-28 "Impairment of Assets" (AS-28) issued by the Institute of Chartered Accountants of India, impairment is ascertained at each balance sheet date in respect of each of the company''s fixed assets.An impairment loss will be recognized whenever the carrying amount of an asset exceeds its estimated recoverable amount.The recoverable amount is the greater of the asset''s net selling price and value in use. In assessing the value in use, the estimated future cash flows are discounted to their present value based on an appropriate discount factor.

IX. VALUATION OF INVENTORIES

i. Raw Materials Components, Stores & Spare parts & Packing Material. At Cost or net realisable value, whichever is less.

ii. Finished Goods. At Cost or net realisable value, whichever is less.

iii. Goods in Progress. At Estimated Cost.

iv. By-Products. At Estimated Cost

X. INVESTMENTS

i. Investments that are readily realizable and intended to be held for not more than a year are classified as current investments.All other investments are classified as long term investments.

ii. Long term investments are carried at cost. However, provision for diminution in value is made to recognize a decline, other than temporary, in the value of investments, on an individual basis.

iii. Current Investments are carried at the lower of cost and fair value determined on a category-wise basis.

XI. FOREIGN CURRENCY TRANSACTIONS

Transactions in foreign currency are recorded at the original rates of exchange in force at the time the transactions are affected. In case of forward contracts, if any, the difference between the forward rates and the exchange rates on the transaction dates is recognized as income or expense over the tenure of the related contracts.

The profit / loss arising out of the cancellation or renewal of forward exchange contracts are recorded as income / expense for the period.

At the year end, monetary items demonetized in foreign currency are reported using the closing rates of exchange. Exchange rate differences arising on realization / payment of foreign exchange are accounted in the year of realisation / payment.

XII. RETIREMENT BENEFITS

I. Contribution to defined provident fund schemes are being charged to Revenue on accrual basis.

ii. The company is regularly making contributions to provident fund schemes, to the extent as applicable to the company.

iv. Gratuity is being provided as required as per actuarial valuation.

XIII. TAXATION

i. Income tax is computed in accordance with Accounting Standard-22 '' ''Accounting for Taxes on Income" (AS-22) issued by the Institute of Chartered Accountants of India.

ii. Provision is made for income tax annually based on the tax liability computed after considering tax allowances and exemptions.

iii. The difference that results between the profit offered for income tax and the profit as per the financial statements is identified and, thereafter, a deferred tax asset or deferred tax liability is recorded for timing differences, namely the differences that originate in one accounting period and reverse in another, based on the tax effect of the aggregate amount being considered.

iv) The carrying amount of the deferred tax assets are reviewed at each balance sheet date. The company writes down the carrying amount of a deferred tax asset to the extent that it is no longer reasonable certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realized. Any such written down carrying amount is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available.

XIV. RESEARCH AND DEVELOPMENT

Revenue expenditure on research and development is charged out in the year in which it is incurred. Expenditure which results in creation of assets is included in fixed assets and depreciation is provided thereon on such assets, as applicable.

XV. ACCOUNTING FOR PROVISIONS, CONTINGENT LIABILITES AND CONTINGENT ASSETS

Provisions are recognized in terms of Accounting Standard-29 '' ''Provisions, Contingent Liabilities and ContingentAssets" (AS-29) issued by the Institute of Chartered Accountants of India, when there is a present legal or statutory obligation as a result of past events, where it is probable that there will be outflow of resources to settle the obligation and a reliable estimate of the amount of the obligation can be made.

Contingent liabilities are recognized only when there is a possible obligation arising from past events due to occurrence or non- occurrence of one or more uncertain future events not wholly within the control of the company or where any present obligation cannot be measured in terms of future outflow of resources or where a reliable estimate of the obligation can not be made. Obligations are assessed on an ongoing basis and only those having a largely probable outflow of resources are provided for.

Contingent assets are not recombined in the financial statements.

XVI. LEASE AGREEMENTS

The Company''s significant leasing arrangements are in respect of operating leases for premises (office, stores, godowns etc.) These leasing arrangements which are not non-cancellable range between 6 months and I year generally or longer and are usually renewable by mutual consent on mutually agreeable terms. The aggregate lease rentals payable are charged as Rent/ Storage Charges in the Profit and Loss Account.

XVII. EARNING PER SHARE

In determining the earning per share, the company considers the net profit after tax. The number of shares used in computing basic earnings per share is the weighted average number of shares outstanding during the year.

XVIII. FINANCIAL AND MANAGEMENT INFORMATION SYSTEMS

The books of accounts and other records have been designed to facilitate compliance with the relevant provisions of the Companies Act, I956 on one hand and meet the internal requirements of information and systems for planning, review and internal control on the other.


Sep 30, 2010

I. The financial statements have been prepared and presented under the historical cost convention on the accrual basis of accounting and on the accounting principles of going concern except as stated hereinafter and except where impairment of assets is made and revaluation of assets is carried out, in accordance with all the applicable accounting principles generally accepted in Indiaand comply with the mandatory applicable accounting standards notified under Sub-Section (3C) of Section 211 of the Companies Act, 1956 and other relevant provisions of the Companies Act, 1956 and the rules, regulations and guidelines made thereunder.

ii. Accounting policies not specifically referred to otherwise are consistently applied by the company and are in consonance with generally accepted accounting principles recognised in the form of accounting standards.

II. REVENUE RECOGNITION

Expenses and Income considered payable and receivable respectively are accounted for on accrual basis except forthe following items, which are accounted for on cash basis: Disposal of Sundry items & Scraps etc.

III. SALES

i Sales are net of returns and shortage allowed to customers.

II. Consignment Sales are recognised on confirmation from consignees.

IV. FIXED ASSETS

Fixed assets are stated at cost of acquisition or construction [including attributable interest and financial costs till such assets are ready for intended use, less accumulated depreciation, impairment losses and specific grants received, if any] except assets revalued on 31st March, 1999. In respect of projects involving institutional loans, related pre-operative and pre-operational expenses like up-front fees and appraisal fees have been capitalized. Interest paid on loans borrowed from institutions, which are attributable to construction or acquisition of fixed assets for the period up to the completion of construction or acquisition of fixed assets, has also been capitalised.

V. BORROWING COSTS

Borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets are capitalized till the month in which each asset is put to use as part of the cost of asset.

VI. REVALUTION OF FIXED ASSETS

All fixed assets of the company were revalued on 31st March 1999 as per the valuation report of Chartered Engineers/approved valuers.

As and when the fixed assets are revalued, the provision for depreciation on such revalued fixed assets is adjusted, wherever applicable, in order to make allowance for the consequent additional diminution in the value.

VII. DEPRECIATION

i. Depreciation is provided, pro-rata, on Straight Line Method by applying rates and in the manner as given in Schedule XIV of the Companies Act, 1956.

ii. As per the Accounting Standard-6 "Depreciation Accounting" (AS-6) issued by the Institute of Chartered Accountants of India, depreciation on revalued assets has been adjusted with the revaluation reserve amount.

VI. IMPAIRMENT OF ASSETS

As per the Accounting Standard-28 "Impairment of Assets" (AS-28) issued by the Institute of Chartered Accountants of India, impairment is ascertained at each balance sheet date in respect of each of the companys fixed assets. An impairment loss will be recognized whenever the carrying amount of an asset exceeds its estimated recoverable amount. The recoverable amount is the greater of the assets net selling price and value in use. In assessing the value in use, the estimated future cash flows are discounted to their present value based on an appropriate discount factor.

IX. VALUATION OF INVENTORIES

i. Raw Materials Components, Stores & At moving average Cost Spare parts & Packing Material.

ii. Finished Goods. At cost or net realisable value, whichever is less.

iii. Goods in Progress. At Estimated Cost.

iv. By-Products. At Estimated Cost

X. INVESTMENTS

i. Investments that are readily reliasable and intended to be held for not more than a year are classified as current investments. All other investments are classified as long term investments.

ii. Long term investments are carried at cost. However, provision for diminution in value is made to recognise a decline, other than temporary, in the value of investments, on an individual basis.

iii. Current lnvestments are carried at the lower of cost and fair value determined on a category-wise basis.

XI. FOREIGN CURRENCY TRANSACTIONS

Transactions in foreign currency are recorded at the original rates of exchange in force at the time the transactions are effected. In case of forward contracts, if any, the difference between the forward rates and the exchange rates on the transaction dates is recognised as income or expense over the lives of the related contracts.

The profit / loss arising out of the cancellation or renewal of forward exchange contracts are recorded as income / expense for the period.

At the year end, monetary items demonetised in foreign currency are reported using the closing rates of exchange. Exchange rate differences arising on realisation / payment of foreign exchange are accounted in the year of realisation/payment.

XII. RETIREMENT BENEFITS

i. Contribution to defined provident fund schemes are being charged to Revenue on accrual basis.

ii. The company is regularly making contributions to provident fund schemes, to the extent as applicable to the company.

iii. Gratuity is being provided as required, as per actuarial valuation.

XIII. TAXATION

i. Income tax is computed in accordance with Accounting Standard-22 "Accounting for Taxes on Income"

(AS-22) issued by the Institute of Chartered Accountants of India.

ii. Provision is made for income tax annually based on the tax liability computed after considering tax allowances and exemptions.

iii. The difference that results between the profit offered for income tax and the profit as per the financial statements is identified and, thereafter, a deferred tax asset or deferred tax liability is recorded for timing differences, namely the differences that originate in one accounting period and reverse in another, based on the tax effect of the aggregate amount being considered.

iv. The carrying amount of the deferred tax assets are reviewed at each balance sheet date. The company writes down the carrying amount of a deferred tax asset to the extent that it is no longer reasonable certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realised. Any such written down carrying amount is reversed to the extent that it becomes reasonably certain orvirtually certain, as the case may be, that sufficient future taxable income will be available.

XIV. RESEARCH AND DEVELOPMENT

Revenue expenditure on research and development is charged out in the year in which it is incurred. Expenditure which results in creation of assets is included in fixed assets and depreciation is provided thereon on such assets, as applicable.

XV. ACCOUNTING FOR PROVISIONS, CONTINGENT LIABILITES AND CONTINGENT ASSETS

Provisions are recognized in terms of Accounting Standard-29 "Provisions, Contingent Liabilities and Contingent Assets" (AS-29) issued by the Institute of Chartered Accountants of India, when there is a present legal or statutory obligation as a result of past events, where it is probable that there will be outflow of resources to settle the obligation and a reliable estimate of the amount of the obligation can be made.

Contingent liabilities are recognized only when there is a possible obligation arising from past events due to occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the company or where any present obligation cannot be measured in terms of future outflow of resources or where a reliable estimate of the obligation can not be made. Obligations are assessed on an ongoing basis and only those having a largely probable outflow of resources are provided for.

Contingent assets are not recombined in the financial statements.

XVI. LEASE AGREEMENTS

The Companys significant leasing arrangements are in respect of operating leases for premises (office, stores, godowns etc.) These leasing arrangements which are not non-cancellable range between 6 months and 1 year generally, or longer and are usually renewable by mutual consent on mutually agreeable terms. The aggregate lease rentals payable are charged as Rent/ Storage Charges in the Profit and Loss Account.

XVII. EARNING PER SHARE

In determining the earning per share, the company considers the net profit after tax. The number of shares used in computing basic earnings per share is the weighted average number of shares outstanding during the year.

XVIII. FINANCIAL AND MANAGEMENT INFORMATION SYSTEMS

The books of accounts and other records have been designed to facilitate compliance with the relevant provisions of the Companies Act, 1956 on one hand and meet the internal requirements of information and systems for planning, review and internal control on the other.

 
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