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Accounting Policies of Mangalam Organics Ltd. Company

Mar 31, 2015

1. Basis of preparation

i. The financial statements of the company have been prepared in accordance with generally accepted accounting principles in India. The company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 2013. The financial statements have been prepared on an accrual basis and under the historical cost convention.

ii. Accounting policies not specifically referred to otherwise, have been followed consistently and are in consonance with generally accepted accounting principles.

2. Use of estimates

The presentation of financial statements in conformity with the generally accepted accounting principles requires estimates and assumptions to be made that effect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual result and estimates are recognized in the period in which the results are known / materialized.

3. Tangible assets and depreciation

i. Fixed Assets are stated at cost net of Cenvat / value added tax and includes amount added on revaluation less accumulated depreciation and impairment loss, if any. All Cost is inclusive of freight, duties, (net of tax credits as applicable) levies and any directly attributable cost till commencement of commercial production.

ii. Depreciation on fixed assets is provided based on the useful life of the assets as prescribed in schedule II of the Companies Act, 2013

iii. Capital work in progress includes incidental expenses pending allocation/ apportionment in respect of the uninstalled/ incomplete Fixed Assets and advances to suppliers of Plant & Machinery, equipment etc.

4. Valuation of inventory

Inventories are valued at lower of cost or net realizable value, after providing for obsolescence and damages as follows:

a) Raw Material, Packing Material, Stores and Spares At Cost on weighted average basis.

b) Material in Process At Cost, plus appropriate production overheads.

c) Finished Goods At cost, plus appropriate production overheads, including excise duty paid/ payable on such goods if applicable.

5. Revenue recognition

i. Sales are recognized, net of returns and trade discounts, on dispatch of goods to customers and are reflected in the accounts at gross realizable value i.e. InclusiveofexcisedutybutexcludingSalesTax/VAT.

ii. In appropriate circumstances, revenue (Income) is recognized when no significant uncertainty as to measurability or collectibles exists and in case of export benefits / incentives are accounted on accrual basis.

iii. Interest income is recognized on time proportionate method.

iv. Claim lodged with insurance companies are recognized as income on reasonable certainty of the claim from Insurance Company. The excess/ shortfall of claims passed are adjusted in the year of receipt.

6. Employee retirement benefits

i. Defined Contribution Plans:

The Company has defined contribution plan for Post -employment benefits in the form of Provident fund for all eligible employees; which is administered by the Regional Provident Fund Commissioner. The Company has no further obligations beyond its monthly contribution.

ii. Defined Benefits Plans:

Funded Plan: The Company has defined benefit plan for Post-employment benefit in the form of Gratuity for all employees.

Liability for above defined benefit plan is provided on the basis of actuarial valuation as per the requirements of Accounting Standard 15 (Revised 2005) on "Employee Benefits", as at the Balance Sheet date, carried out by an independent actuary. The actuarial method used for measuring the liability is the Projected Unit Credit method.

iii. Other Long Term Employee Benefits:

Liability for compensated absence (unutilized leave benefit) is provided on the basis of valuation, as at the Balance Sheet date, carried out by an independent actuary. The actuarial method used for measuring the liability is the Projected Unit Credit method in respect of past services.

iv. Termination benefits are recognized as an expense as and when incurred.

v. The actuarial gains and losses arising during the year are recognized in the statement of profit and loss of the year without resorting to any amortization.

7. Investments

Long term Investments are stated at cost. Temporary fall in market value, if any, is not provided for. Current Investments are carried at lower of cost and fair value.

8. Foreign currency transactions

i. Monetary and Non-Monetary items/ transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing at the time of transaction.

ii. Monetary items denominated in foreign currencies are recorded at the original rate of exchange in-force at the time transactions are affected. Foreign Currency transactions remaining unsettled at the year-end are translated at the rate prevailing on the balance sheet date. The difference in translation of monetary assets and liabilities of realized gains or losses on foreign exchange transaction are recognized in the statement of profit and loss.

9. Borrowing costs

Borrowing costs that are attributable to the acquisition or construction of fixed assets are capitalized as part of the cost of such assets for the period until the asset is ready for its intended use. Other borrowing costs are recognized as an expense in the period in which they are incurred. A qualifying asset is on that takes substantial period of time to get ready for intended use.

10. Taxes

i. Current Tax has been provided as per the provisions of Income tax Act, 1961.

ii. Tax expense comprise of current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act, 1961. Deferred tax for timing differences between the book profit and taxable income for the year and reversal of timing differences of earlier years.

iii. Deferred Tax resulting from "timing differences" between book and tax profits is accounted for using the tax rates and laws that has been enacted as of the balance sheet date, to the extent that the timing differences are expected to crystallize as deferred tax charge / benefit in the statement of profit and Loss and as deferred tax asset or liabilities in the Balance Sheet. The deferred tax asset is recognized and carried forward only to the extent that there is a virtual certainty that the assets will be realized in future.

iv. Minimum Alternative Tax (MAT) credit is recognized as an asset only when and to the extent there is convincing evidence that the company will pay normal income tax during the specified period. In the year in which the MAT credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in guidance note issued by Institute of Chartered Accountants of India, the said asset is created by way of a credit to the Profit & Loss Account and shown as MAT credit entitlement. The company reviews the same at each Balance Sheet date and write down the carrying amount of MAT credit entitlement to the extent there is no longer convincing evidence to the effect that the company will pay normal income-tax during specified period.

11. Provisions, contingent liabilities and contingent assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Assets are neither recognized nor disclosed in the financial statements. Contingent Liabilities are disclosed separately.

12. Impairment of Assets (AS-28)

At each balance sheet date, the Management reviews the carrying amounts of assets and goodwill included 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 assets and goodwill is estimated in order to determine the extent of impairment loss. Recoverable amount is the higher of an asset's net selling price and value in use. In assessing value in use, the estimated future cash flows expected from the continuing use of the assets and from disposal are discounted to their present value using a pre-tax discount rate that reflects the current market assessments of time value of money and the risk specific to the assets.

Reversal of impairment loss is recognized immediately as income in the statement of profit and loss.

13. Excise duty and CENVAT credit

Excise duties recovered are included in Sales and shown separately in financial statement as deduction from sales. Excise duty provision made in respect of finished goods lying at factory premises are shown separately as an item of manufacturing and other expenses and included in the valuation of finished goods, Cenvat credit available on purchases of service / materials / capital goods is accounted by reducing cost of services / materials / capital goods. Cenvat credit availed of is accounted by way of adjustment against excise duty payable on dispatch of finished goods.

14. Customs duty

Customs Duty on goods lying in Custom Bonded Warehouse is charged in the year of clearance of goods when it becomes payable.

15. Earning Per Share

Basic earning per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders (after deducting attributable taxes) by weighted average number of equity shares outstanding during the year. The weighted average number of equity shares outstanding during the year is adjusted for events of preferential issue allotment of equity shares. For the purpose of calculating diluted earning per share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

16. Cash Flow Statement

The Cash Flow Statement is prepared by the indirect method set out in Accounting Standard 3 on Cash Flow Statement and presents the cash flows by operating, investing and financing activities of the company. Cash and cash equivalents presented in the Cash Flow Statement consist of cash on hand and demand deposits with banks.

17. Miscellaneous Expenditure

Miscellaneous Expenditure is debited fully in the year in which expenditure is incurred.


Mar 31, 2014

1. Basis of preparation

i. The financial statements of the Compnay have been prepared in accordance with generally accepted accounting principles in India. The Compnay has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on an accrual basis and under the historical cost convention.

ii. Accounting policies not specifically referred to otherwise, have been followed consistently and are in consonance with generally accepted accounting principles.

2. Use of estimates

The presentation of financial statements in conformity with the generally accepted accounting principles requires estimates and assumptions to be made that effect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual result and estimates are recognized in the period in which the results are known / materialized.

3. Tangible assets and depreciation

i. Fixed Assets are stated at cost net of Cenvat / value added tax and includes amount added on revaluation less accumulated depreciation and impairment loss, if any. All Cost is inclusive of freight, duties, (net of tax credits as applicable) levies and any directly attributable cost till commencement of commercial production.

ii. Depreciation on Fixed Assets is provided as per the straight line method (SLM) at the rate and in the manner prescribed in schedule XlV of the Companies act, 1956 on prorata basis. Fixed Assets are capitalized at cost inclusive of expenses and interest wherever applicable.

iii. Capital work in progress includes incidental expenses pending allocation/ apportionment in respect of the uninstalled/ incomplete Fixed Assets and advances to suppliers of Plant & Machinery, Equipment etc.

4. Valuation of inventory

Inventories are valued at lower of cost or net realizable value, after providing for obsolescence and damages as follows:

a) Raw Material, Packing Material & Stores and At Cost on weighted average basis. Spares

b) Material in Process At Cost, plus appropriate production overheads.

c) Finished Goods At cost, plus appropriate production overheads, including excise duty paid/ payable on such goods if applicable.

5. Revenue recognition

i. Sales are recognized, net of returns and trade discounts, on dispatch of goods to customers and are reflected in the accounts at gross realizable value i.e. Inclusive of Excise Duty but excluding Sales Tax/VAT.

ii. In appropriate circumstances, revenue (Income) is recognized when no significant uncertainty as to measurability or collectibles exists and in case of export benefits/ incentives are accounted on accrual basis.

iii. Interest income is recognized on time proportionate method.

iv. Claim lodged with insurance companies are recognized as income on acceptance by the Insurance Company. The excess/shortfall of claims passed are adjusted in the year of receipt.

6. Employee retirement benefits

i. Defined Contribution Plans:

The Company has defined contribution plan for Post -employment benefits in the form of Provident fund for all eligible employees; which is administered by the Regional Provident Fund Commissioner. The Company has no further obligations beyond its monthly contribution.

ii. Defined Benefits Plans:

Funded Plan: The Company has defined benefit plan for Post-employment benefit in the form of Gratuity for all employees.

Liability for above defined benefit plan is provided on the basis of actuarial valuation as per the requirements of Accounting Standard 15 (Revised 2005) on "Employee Benefits", as at the Balance Sheet date, carried out by an independent actuary. The actuarial method used for measuring the liability is the Projected Unit Credit method.

iii. Other Long Term Employee Benefits:

Liability for compensated absence (unutilized leave benefit) is provided on the basis of valuation, as at the Balance Sheet date, carried out by an independent actuary. The actuarial method used for measuring the liability is the Projected Unit Credit method in respect of past services.

iv. Termination benefits are recognized as an expense as and when incurred.

v. The actuarial gains and losses arising during the year are recognized in the statement of profit and loss of the year without resorting to any amortization.

7. investments

Long term Investments are stated at cost. Temporary fall in market value, if any, is not provided for. Current Investments are carried at lower of cost and fair value.

8. Foreign currency transactions

i. Monetary and Non-Monetary items/transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing at the time of transaction.

ii. Monetary items denominated in foreign currencies are recorded at the original rate of exchange in-force at the time transactions are affected. Foreign Currency transactions remaining unsettled at the year-end are translated at the rate prevailing on the balance sheet date. The difference in translation of monetary assets and liabilities of realized gains or losses on foreign exchange transaction are recognized in the statement of profit and loss.

9. Borrowing costs

Borrowing costs that are attributable to the acquisition or construction of fixed assets are capitalised as part of the cost of such assets for the period until the asset is ready for its intended use. Other borrowing costs are recognised as an expense in the period in which they are incurred. A qualifying asset is on that takes substantial period of time to get ready for intended use.

10. Taxes

i. Current Tax has been provided as per the provisions of Income tax Act, 1961.

ii. Tax expense comprise of current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act, 1961. Deferred tax for timing differences between the book profit and taxable income for the year and reversal of timing differences of earlier years.

iii. Deferred Tax resulting from "timing differences" between book and tax profits is accounted for using the tax rates and laws that has been enacted as of the balance sheet date, to the extent that the timing differences are expected to crystallize as deferred tax charge / benefit in the statement of profit and Loss and as deferred tax asset or liabilities in the Balance Sheet. The deferred tax asset is recognized and carried forward only to the extent that there is a virtual certainty that the assets will be realized in future.

iv. Minimum Alternative Tax (MAT) credit is recognized as an asset only when and to the extent there is convincing evidence that the Company will pay normal Income Tax during the specified period. In the year in which the MAT credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in guidance note issued by Institute of Chartered Accountants of India, the said asset is created by way of a credit to the Profit & Loss Account and shown as MAT credit entitlement. The Company reviews the same at each Balance Sheet date and write down the carrying amount of MAT credit entitlement to the extent there is no longer convincing evidence to the effect that the Company will pay normal Income Tax during specified period.

11. Provisions, contingent liabilities and contingent assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Assets are neither recognized nor disclosed in the financial statements. Contingent Liabilities are disclosed separately.

12. Impairment of Assets (AS-28)

At each balance sheet date, the Management reviews the carrying amounts of assets and goodwill included 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 assets and goodwill is estimated in order to determine the extent of impairment loss. Recoverable amount is the higher of an asset''s net selling price and value in use. In assessing value in use, the estimated future cash flows expected from the continuing use of the assets and from disposal are discounted to their present value using a pre-tax discount rate that reflects the current market assessments of time value of money and the risk specific to the assets.

Reversal of impairment loss is recognized immediately as income in the statement of profit and loss.

13. Excise duty and CENVAT credit

Excise Duties recovered are included in Sales and shown separately in financial statement as deduction from sales. Excise duty provision made in respect of finished goods lying at factory premises are shown separately as an item of manufacturing and other expenses and included in the valuation of finished goods. Cenvat credit available on purchases of service / materials / capital goods is accounted by reducing cost of services / materials / capital goods. Cenvat credit availed of is accounted by way of adjustment against Excise Duty payable on dispatch of finished goods.

14. Customs duty

Customs Duty on goods lying in Custom Bonded Warehouse is charged in the year of clearance of goods when it becomes payable.

15. Earning Per Share

Basic earning per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders (after deducting attributable taxes) by weighted average number of equity shares outstanding during the year. The weighted average number of equity shares outstanding during the year is adjusted for events of preferential issue allotment of equity shares. For the purpose of calculating diluted earning per share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

16. Cash Flow Statement

The Cash Flow Statement is prepared by the indirect method set out in Accounting Standard 3 on Cash Flow Statement and presents the cash flows by operating, investing and financing activities of the Company. Cash and cash equivalents presented in the Cash Flow Statement consist of cash on hand and demand deposits with banks.

17. Miscellaneous Expenditure

Miscellaneous Expenditure is debited fully in the year in which expenditure is incurred.


Mar 31, 2013

A) Basisofpreparation

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India. The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on an accrual basis and underthe historical cost convention.

b) Use of estimates

The presentation of financial statements in conformity with the generally accepted accounting principles requires estimates and assumptions to be made that effect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual result and estimates are recognized in the period in which the results are known/materialized.

c) Tangible assetsand depreciation

Fixed Assets are stated at cost net of Cenvat / value added tax and includes amount added on revaluation less accumulated depreciation and impairment loss, if any. All cost is inclusive of freight, duties, (net of tax credits as applicable) levies and any directly attributable cost till commencement of commercial production.

Depreciation on fixed assets is provided as per the straight line method (SLM) at the rate and in the manner prescribed in schedule XIV of the Companies act, 1956 on prorata basis. Fixed Assets are capitalized at cost inclusive of expenses andinterestwhereverapplicable.

d) Valuation of inventory

A) Raw Materials, General Stores & Packing Material are valued at cost or net realizable value, whichever is lower.

B) Work-in-progress is valued at cost of materials or their net realizable value, whichever is lower and labours togetherwith relevant factory overheads.

C) Finished goods are valued at cost or market value whichever is less. The value includes excise duty paid/payable on such goods.

Due consideration is given to the salability of the stocks and no obsolete or unserviceable damaged items included therein except at their net realizable value.

e) Revenue recognition

A) Sales are recognized, netof returnsandtradediscounts,ondispatchofgoodstocustomersandarereflected in the accounts at gross realizable value i.e. Inclusiveofexciseduty.

B) In appropriate circumstances, revenue (Income) is recognized when no significant uncertainty as to measurabilityorcollectiblesexistsandincase of export benefits/incentives are accounted on accrualbasis.

C) Interest income is recognized on time proportionate method.

f) Employee retirement benefits

A) Defined Contribution Plans:

The Company has defined contribution plan for Post -employment benefits in the form of provident fund for all eligible employees; which is administered by the Regional Provident Fund Commissioner. The Company has no furtherobligations beyond itsmonthly contribution.

B) Defined Benefits Plans:

Funded Plan: The Company has defined benefit plan for post-employment benefit in the form of Gratuity for all employees.

Liability for above defined benefit plan is provided on the basis of valuation, as at the Balance Sheet date, carried out by anindependentactuary.The actuarialme tho dused formea suring the liabilityis the Projected Unit Credit method.

C) Other Long Term Employee Benefits:

Liability for compensated absence (unutilized leave benefit) is provided on the basis of valuation, as at the Balance Sheet date, carried out by an independent actuary. The actuarial method used for measuring the liabilityistheProjected Unit Creditmethodin respect of past services.

D) Termination benefits are recognized as an expense as and when incurred.

E) The actuarial gains and losses arising during the year are recognized in the statement of profit and loss of the yearwithoutresortingtoanyamortization.

g) Investments

Long term Investments are stated at cost. Temporary fall in market value, if any, is not provided for. Current Investmentsarecarriedatlowerofcostandfairvalue.

h) Foreign currency transactions

A) Transactions entered into and concluded during the year in foreign currency are recorded at the actual exchange rates prevailing at the time of thetransactions.

B) Transactions in foreign currency are recorded at the original rate of exchange in force at the time transactions are affected. Foreign currency transactions remaining unsettled at the year end are translated at the rate prevailing on the balance sheet date. The difference in translation of monetary assets and liabilities of realized gains or losses on foreign exchange transaction are recognized in the statement of profit and loss.

i) Borrowing costs

Borrowing costs that are attributable to the acquisition or construction of fixed assets are capitalised as part of the cost of such assets for the period until the asset is ready for its intended use. Other borrowing costs are recognised as an expense in the period in which they are incurred. A qualifying asset is on that takes substantial period of time to get readyforintendeduse.

j) Taxes

A) Provision for current taxation is made for the current accounting period (reporting period) on the basis of the taxable profits computedinaccordancewithlncomeTaxAct 1961 for relevantassessmentyear.

B) Deferred Tax resulting from "timing differences" between book and tax profits is accounted for under the liability method, using the tax rates and laws that has been enacted as of the balance sheet date, to the extent that the timing differences are expected to crystallize as deferred tax charge / benefit in the statement of Profit and Loss and as deferred tax asset or liabilities in the Balance Sheet. The deferred tax asset is recognized and carriedforwardonlytotheextentthat there isa virtualcertaintythattheassetswillbe realized infuture. Deferred tax assets are recognized only if there is reasonable certainty that they will be realized in future and are reviewed for the appropriateness of their respective carrying values at each balance sheet date.

k) Provisions, contingent liabilities and contingent assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Assets are neither recognized nor disclosed in the financial statements. Contingent Liabilities are disclosed separately.

I) Impairment

At each balance sheet date, the Management reviews the carrying amounts of assets and goodwill included 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 assets and goodwill is estimated in order to determine the extent of impairment loss. Recoverable amount is the higher of an asset''s net selling price and value in use. In assessing value in use, the estimated future cash flows expected from the continuing use of the assets and from disposal are discounted to their present value using a pre-tax discount rate that reflects the current market assessments of time value of moneyand the riskspec if ictotheassets. Reversalo fimpairment lossisrecognizedimmediatelyas income in the statement of pro fitandloss.

m) Excise duty and CEN VAT credit

Excise duties recovered are included in sales and shown separately in financial statement as deduction from sales. Excise duty provision made in respect of finished goods lying at factory premises are shown separately as an item of manufacturing and other expenses and included in the valuation of finished goods. Cenvat credit available on purchases of service / materials / capital goods is accounted by reducing cost of services / materials / capital goods. Cenvat credit availed of is accounted byway of adjustment against excise duty payable on dispatch of finished goods.

n) Customs Duty

Customs Duty on goods lying in Custom Bonded Warehouse is charged in the year of clearance of goods when it becomes payable. Bank guarantees issued by banks on behalf of the Company Rs. 41.21 Lacs (Previous Year Rs.32.72 Lacs). These are secured bythechargecreatedinfavouroftheCompany''sbankers byway of pledgeof Fixed Deposit Receipts


Mar 31, 2012

A) Basis of preparation

The financial statements of the company have been prepared in accordance with generally accepted accounting principles in India. The company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on an accrual basis and under the historical cost convention.

b) Use of estimates

The presentation of financial statements in conformity with the generally accepted accounting principles requires estimates and assumptions to be made that effect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual result and estimates are recognized in the period in which the results are known/materialized.

c) Tangible assets and depreciation

Fixed Assets are stated at cost net of Cenvat / value added tax and includes amount added on revaluation less accumulated depreciation and impairment loss, if any.AII Cost is inclusive of freight, duties,(net of tax credits as applicable) levies and any directly attributable cost till commencement of commercial production.

Depreciation on fixed assets is provided as per the straight line method (SLM) at the rate and in the manner prescribed in schedule XIV of the Companies act, 1956 on prorata basis. Fixed Assets are capitalized at cost inclusive of expenses and interest wherever applicable.

d) Valuation of inventory

A) Raw Materials, General Stores & Packing Material are valued at cost or net realizable value, whichever is lower.

B) Work-in-progress is valued at cost of materials or their net realizable value, whichever is lower and labours together with relevant factory overheads.

C) Finished goods are valued at cost or market value whichever is less. The value includes excise duty paid/payable on such goods.

Due consideration is given to the salability of the stocks and no obsolete or unserviceable damaged items included therein except at their net realizable value.

e) Revenue recognition

A) Sales are recognized, net of returns and trade discounts, on dispatch of goods to customers and are reflected in the accounts at gross realizable value i.e. Inclusive of excise duty.

B) In appropriate circumstances, revenue (Income) is recognized when no significant uncertainty as to measurability or collectibles exists and in case of export benefits/incentives are accounted on accrual basis.

C) Interest income is recognized on time proportionate method.

f) Employee retirement benefits

A) Defined Contribution Plans:

The Company has defined contribution plan for Post -employment benefits in the form of Provident fund for all eligible employees; which is administered by the Regional Provident Fund Commissioner. Company has no further obligations beyond its monthly contribution.

B) Defined Benefits Plans:

Funded Plan: The Company has defined benefit plan for Post-employment benefit in the form of Gratuity for all employees.

Liability for above defined benefit plan is provided on the basis of valuation, as at the Balance Sheet date, carried out by an independent actuary. The actuarial method used for measuring the liability is the Projected Unit Credit method.

C) Other Long Term Employee Benefits:

Liability for compensated absence (unutilized leave benefit) is provided on the basis of valuation, as at the Balance Sheet date, carried out by an independent actuary. The actuarial method used for measuring the liability is the Projected Unit Credit method in respect of past services.

D) Termination benefits are recognized as an expense as and when incurred.

E) The actuarial gains and losses arising during the year are recognized in the statement of profit and loss of the year without resorting to any amortization.

g) Investments

Long term Investments are stated at cost. Temporary fall in market value, if any, is not provided for. Current Investments are carried at lower of cost and fair value.

h) Foreign currency transactions

A) Transactions entered into and concluded during the year in foreign currency are recorded at the actual exchange rates prevailing at the time of the transactions.

B) Transactions in foreign currency are recorded at the original rate of exchange in-force at the time transactions are affected. Foreign Currency transactions remaining unsettled at the year-end are translated at the rate prevailing on the balance sheet date. The difference in translation of monetary assets and liabilities of realized gains or losses on foreign exchange transaction are recognized in the statement of profit and loss.

i) Borrowing costs

Borrowing costs that are attributable to the acquisition or construction of fixed assets are capitalised as part of the cost of such assets for the period until the asset is ready for its intended use. Other borrowing costs are recognised as an expense in the period in which they are incurred. A qualifying asset is on that takes substantial period of time to get ready for intended use.

j) Taxes

A) Provision for current taxation is made for the current accounting period (reporting period) on the basis of the taxable profits computed in accordance with Income Tax Act 1961 for relevant assessment year.

B) Deferred Tax resulting from "timing differences" between book and tax profits is accounted for under the liability method, using the tax rates and laws that has been enacted as of the balance sheet date, to the extent that the timing differences are expected to crystallize as deferred tax charge / benefit in the statement of Profit and Loss and as deferred tax asset or liabilities in the Balance Sheet. The deferred tax asset is recognized and carried forward only to the extent that there is a virtual certainty that the assets will be realized in future.

Deferred tax assets are recognized only if there is reasonable certainty that they will be realized in future and are reviewed for the appropriateness of their respective carrying values at each balance sheet date.

k) Provisions, contingent liabilities and contingent assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will bean outflow of resources. Contingent Assets are neither recognized nor disclosed in the financial statements. Contingent Liabilities are disclosed separately.

I) Impairment

At each balance sheet date, the Management reviews the carrying amounts of assets and goodwill included 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 ofthe assets and goodwill is estimated in order to determine the extent of impairment loss. Recoverable amount is the higher of an asset's net selling price and value in use. In assessing value in use, the estimated future cash flows expected from the continuing use ofthe assets and from disposal are discounted to their present value using a pre-tax discount rate that reflects the current market assessments of time value of money and the risk specific to the assets.

Reversal of impairment loss is recognized immediately as income in the statement of profit and loss.

m) Excise duty and CENVAT credit

Excise duties recovered are included in Sales and shown separately in financial statement as deduction from sales. Excise duty provision made in respect of finished goods lying at factory premises are shown separately as an item of manufacturing and other expenses and included in the valuation of finished goods. Cenvat credit available on purchases of service / materials / capital goods is accounted by reducing cost of services / materials / capital goods. Cenvat credit availed of is accounted byway of adjustment against excise duty payable on dispatch of finished goods.

n) Customs duty

Customs Duty on goods lying in Custom Bonded Warehouse is charged in the year of clearance of goods when it becomes payable.


Mar 31, 2011

I] ACCOUNTING CONVENTION

The financial statements are prepared under historical cost convention on accrual basis and are in accordance with the requirements of the Companies Act, 1956 and comply with the Accounting Standards specified by the Institute of Chartered Accountants of India and relevant provisions of the Companies Act, 1956.

II] USE OF ESTIMATES -

The preparation of financial statements requires the management of the Company to make estimates and assumptions that affect the reported balances of assets .and'liabilities and disclosures relating to the contingent liabilities as at the date of the financial statements and reported amounts of income and expenses during the year. Difference between the actual result and estimates are recognized in the period in which the results are known /materialized.

III] FIXED ASSETS, DEPRECIATION AND TREATMENT OF EXPENDITURE DURING CONSTRUCTION:

Fixed Assets are stated at cost net of cenvat / value added tax and includes amount added on revaluation less accumulated depreciation and impairment loss, if any. All Cost is inclusive of Freight, Duties, (net of tax credits as applicable) levies and any directly attributable cost till commencement of commercial production.

Depreciation on fixed assets is provided as per the straight line method (SLM) at the rate and in the manner prescribed in schedule XIV of the Companies act, 1956 on prorata basis. Fixed Assets are capitalized at cost inclusive of expenses and interest wherever applicable.

IV] IMPAIRMENT OF ASSETS

At each balance sheet date, the Management reviews the carrying amounts of assets and goodwill included 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 assets and goodwill is estimated in order to determine the extent of impairment loss. Recoverable amount is the higher of an asset's net selling price and value in use. In assessing value in use, the estimated future cash flows expected from the continuing use of the assets and from disposal are discounted to their present value using a pre tax discount rate that reflects the current market assessments of time value of money and the risk specificto the assets. Reversal of impairment loss is recognized immediately as income in the profit and loss account.

V] VALUATION OF INVENTORIES

[a] Raw Materials, General Stores & Packing Material are valued at cost or net realizable value, which ever is lower.

[b] Work-in progress is valued at cost of materials or their net realizable value, whichever is lower and labours together with relevant factory overheads.

[c] Finishecj Goods valued at cost or market value whichever is less. The value includes excise duty paid/payable on such goods.

Due consideration is given to the saiability of the stocks and no obsolete or unserviceable damaged items included therein except at their net realizable value.

VI] EXPENSES

Materia! known liabilities are provided for on the basis of available information/estimates.

VII] REVENUE RECOGNITION

A: Sales are recognized, net of returns and trade discounts, on dispatch of goods to customers and are reflected in the accounts at gross realizable value i.e. Inclusive of excise duty.

B: In appropriate circumstances, Revenue (Income) is recognized when no significant uncertainty as to measurability or collectibles exists and in case of, Export benefits/incentives are accounted on accrual basic. C: Interest income is recognized on time proportionate method.

VIII] EMPLOYEE RETIREMENT BENEFITS

A: Defined Contribution Plans:

The company has defined contribution plan for Post -employment benefits in the form of Provident fund for all eligible employees; which is administered by the Regional Provident Fund Commissioner. Company has no further obligations beyond its monthly contribution.

B: Defined Benefits Plans:

Funded Plan: The Company has defined benefit plan for Post-employment benefit in the form of Gratuity for all employees which is administered through Life Insurance Corporation (LIC).

Liability for above defined benefit plan is provided on the basis of valuation, as at the Balance Sheet date, carried out by an independent actuary. The actuarial method used for measuring the liability is the Projected Unit Credit method.

C: Other Long Term Employee Benefits:

Liability for compensated absence (unutilized leave benefit) is provided on the basis of valuation, as at the Balance Sheet date, carried out by an independent actuary. The actuarial method used for measuring the liability is the Projected Unit Credit method in respect of past services.

D: Termination benefits are recognized as an expense as and when incurred.

E: The actuarial gains and losses arising during the year are recognized in the profit and loss account of the year without resorting to any amortization.

IX] EXCISE DUTY & CENVAT CREDIT

Excise Duties recovered are induded in Sales and shown separately in financial statement as deduction from sales. Excise duty provision made in respect of finished goods lying at factory premises are shown separately as an item of manufacturing and other expenses and included in the valuation of finished goods.Cenvat credit available on purchases of service / materials / capital goods is accounted by reducing cost of services / materials / capital goods.Cenavat credit availed of is accounted by way of adjustment against excise duty payable on dispatch of finished goods.

X] CUSTOMS DUTY

Customs Duty on goods lying in Custom Bonded -Warehouse is charged in the year of clearance of goods when it becomes payable.

XI] FOREIGN CURRENCY TRANSACTIONS

A: Transactions entered into and concluded during the year in foreign currency are recorded at the actual exchange rates prevailing at the time of thetransactions.

B: Transactions in Foreign Currency are recorded at the original tote of exchange in-force at the time transactions are effected. Foreign Currency transactions remaining unsettled at the year-end are translated at the rate prevailing on the balance sheet date. The difference in translation of monetary assets and liabilities of realized gains or losses on foreign exchange transaction are recognized in the Profit and Loss Account.

XII] BORROWING COSTS

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

XIII] TAXATION

A: Provision for current taxation is made for the current accounting period (reporting period) on the basis of the taxable profits computed in accordance with Income Tax Act 1961 for relevant assessment year. B: Deferred Tax resulting from "timing differences" between book and tax profits is accounted for under the liability method, using the tax rates and laws that has been enacted as of the balance sheet date, to the extent that the timing differences are expected to crystallize as deferred tax charge /benefit in the Profit and Loss Account and as deferred tax asset or liabilities in the Balance Sheet. The deferred tax asset is recognized and carried forward only to the extent that there is a virtual certainty that the assets will be realized in future.

Deferred tax assets are recognized only if there is reasonable certainty that they will be realized in future and are reviewed for the appropriateness of their respective carrying values at each balance sheet date.

XIV] PROVISIONS. CONTINGENT LIABILITIES & CONTINGENT ASSETS

Provisions involving degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it probable that there will be an outflow of resources. Contingent Assets are neither recognized nor disclosed in the financial statements. Contingent liabilities are disclosed separately.

Accounting policies not specifically referred to otherwise are consistent with generally accepted accounting principles followed by the Company.


Mar 31, 2010

I] ACCOUNTING CONVENTION

The financial statements are prepared under historical cost convention on accrual basis and are in accordance with the requirements of the Companies Act, 1956 and comply with the Accounting Standards specified by the Institute of Chartered Accountants of India and relevant provisions of the Companies Act, 1956.

II] USE OF ESTIMATES

The preparation of financial statements requires the management of the Company to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to the contingent liabilities as at the date of the financial statements and reported amounts of income and expenses during the year. Difference between the actual result and estimates are recognized in the period in which the results are known/materialized.

III] FIXED ASSETS, DEPRECIATION AND TREATMENT OF EXPENDITURE DURING CONSTRUCTION:

Fixed Assets are stated at cost net of cenvat / value added tax and includes amount added on revaluation less accumulated depreciation and impairment loss, if any. All Cost is inclusive of Freight, Duties, (net of tax credits as applicable) levies and any directly attributable cost till commencement of commercial production. Depreciation on fixed assets is provided as per the straight line method (SLM) at the rate and in the manner prescribed in schedule XIV of the Companies act, 1956 on prorata basis. Fixed Assets are capitalized at cost . inclusive of expenses and interest wherever applicable.

[V] IMPAIRMENT OF ASSETS

At each balance sheet date, the Management reviews the carrying amounts of assets and goodwill included 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 assets and goodwill is estimated in order to determine the

extent of impairment loss. Recoverable amount is the higher of an assets net selling price and value in use. In assessing value in use, the estimated future cash flows expected from the continuing use of the assets and from disposal are discounted to their present value using a pre-tax discount rate that reflects the current market assessments of time value of money and the risk specific to the assets. Reversal of impairment loss is recognized immediately as income in the profit and loss account.

V] VALUATION OF INVENTORIES

[a] Raw Materials, General Stores & Packing Material are valued at cost.

[b] Work-in-progress is valued at cost of materials and labours together with relevant factory overheads.

[c] Finished Goods valued at cost or market value whichever is less. The value includes excise duty paid/payable on such goods,

- Due consideration is given to the salability of the stocks and no obsolete or unserviceable damaged items included therein except at their net realizable value.

VI] EXPENSES

Material known liabilities are provided for on-the basis of available information / estimates.

VII] REVENUE RECOGNITION

A : Sales are recognized, net of returns and trade discounts, on dispatch of goods to customers and are reflected in the accounts at gross realizable value i.e. Inclusive of excise duty. Inter-unit sales/ purchases have been eliminated during the year.

B: In appropriate circumstances, Revenue (Income) is recognized when no significant uncertainty as to Measurability or collectibles exists and in case of, Export benefits/incentives are accounted on accrual basic.

C: Interest income is recognized on time proportionate method.

VIII] EMPLOYEE RETIREMENT BENEFITS

A: Defined Contribution Plans:

The company has defined contribution plan for Post -employment benefits in the form of Provident fund for ail eligible employees; which is administered by the Regional Provident Fund Commissioner. Company has no further obligations beyond its monthly contribution. B: Defined Benefits Plans:

Funded Plan: The Company has defined benefit plan for Post-employment benefit in the form of Gratuity for all employees which is administered through Life Insurance Corporation (LIC).

Liability for above defined benefit plan is provided on the basis of valuation, as at the Balance Sheet date, carried out by an independent actuary. The actuarial method used for measuring the liability is the Projected Unit Credit method.

C: Other Long Term Employee Benefits:

Liability for compensated absence (unutilized leave benefit) is provided on the basis of valuation, as at the Balance Sheet date, carried out by an independent actuary. The actuarial method used for measuring the liability is the Projected Unit Credit method in respect of past services.

D: Termination benefits are recognized as an expense as and when incurred.

E: The actuarial gains and losses arising during the year are recognized in the profit and loss account of the year without resorting to any amortization.

IX] EXCISE DUTY & CENVAT CREDIT

Excise Duties wherever recovered are included in Sales and shown separately in financial statement as deduction from sales. Excise duty provision made in respect of finished goods lying at factory premises are shown separately as an item of manufacturing and other expenses and included in the valuation of finished goods. Cenvat credit available on purchases of service / materials / capital goods is accounted by reducing cost of services / materials / capital goods, Cenvat credit availed of is accounted by way of adjustment against excise duty payable on dispatch of finished goods.

X] CUSTOMS DUTY

Customs Duty on goods lying in Custom Bonded Warehouse is charged in the year of clearance of goods when it becomes payable.

XI] FOREIGN CURRENCY TRANSACTIONS

A : Transactions entered into and concluded during the year in foreign currency are recorded at the actual exchange rates prevailing at the time of the transactions.

B: Transactions in Foreign Currency are recorded at the original rate of exchange in-force at the time transactions are effected. Foreign Currency transactions remaining unsettled at the year-end are translated at the rate prevailing on the balance sheet date. The difference in translation of monetary assets and liabilities of realized gains or losses on foreign exchange transaction are recognized in the Profit and Loss Account.

XII] BORROWING COSTS

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

XIII] TAXATION

A: Provision for current taxation is made for the current accounting period (reporting period) on the basis of the taxable profits computed in accordance with Income Tax Act 1961 for relevant assessment year.

B : Deferred Tax resulting from "timing differences" between book and tax profits is accounted for under the liability method, using the tax rates and laws that has been enacted as of the balance sheet date, to the extent that the timing differences are expected to crystallize as deferred tax charge / benefit in the Profit and Loss Account and as deferred tax asset or liabilities in the Balance Sheet. The deferred tax asset is recognized and carried forward only to the extent that there is a virtual certainty that the assets will be realized in future.

Deferred tax assets are recognized only if there is- reasonable certainty that they will be realized in future and are reviewed for the appropriateness of their respective carrying values at each balance sheet date.

Accounting policies not specifically referred to otherwise are consistent with generally accepted accounting principles followed by the Company.

XIV] PROVISIONS, CONTINGENT LIABILITIES & CONTINGENT ASSETS

Provisions involving degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it probable that there will be an outflow of resources. Contingent Assets are neither recognized nor disclosed in the financial statements. Contingent liabilities are disclosed separately.

 
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