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Accounting Policies of Manugraph India Ltd. Company

Mar 31, 2015

(a) Basis of preparation

The Financial Statements have been prepared to comply in all material respects with the notified accounting standards by the Companies Accounting Standards Rules, 2006 (which are deemed to be applicable as per 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. The financial statements have been prepared under the historical cost convention, on an accrual basis of accounting.

The classification of assets and liabilities of the Company is done into current and non-current based on the operating cycle of the business of the Company. The operating cycle of the business of the Company is less than twelve months and therefore all current and non-current classifications are done based on the status of realisability and expected settlement of the respective asset and liability within a period of twelve months from the reporting date as required by the Schedule III of the Companies Act, 2013.

The accounting policies adopted in the preparation of the financial statements are consistent with those used in the previous year.

(b) Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period end. Although these estimates are based upon management's best knowledge of current events and actions, actual results could differ from these estimates. Difference between the actual results and estimates are recognized in the period in which the results are known.

(c) Inflation

Assets and liabilities are shown at historical cost . No adjustments are made for changes in purchasing power of money.

(d) Fixed Assets

i. Tangible assets are stated at cost net of accumulated depreciation and accumulated impairment losses, if any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition of its intended use. The costs comprises of the purchase price, borrowings costs if capitalisation criteria are met and directly attributable costs of bringing the asset to its working condition for the intended use. Any trade discounts and rebates are deducted in arriving at the cost of the tangible asset. Any subsequent expenses related to a tangible asset is added to its book value only if it increases the future benefits from the existing asset beyond its previously assessed standard of performance. All other day to day repairs and maintenance expenditure and the cost of replacing parts, are charged to the statement of profit and loss for the period during which such expenses are incurred.

ii. Cost of borrowing for assets taking substantial time to be ready for use is capitalised for the period up to the time the asset is ready for use.

iii. Intangible assets are stated at cost of construction less accumulated amortised amount and accumulated impairment losses, if any.

(e) Depreciation and Amortisation

i. Depreciation on all assets of the Company is charged on straight line method over the useful life of assets at the rates and in the manner provided in Schedule II of the Companies Act, 2013 for the proportionate period of use during the year.

ii. The useful life of the intangible asset being computer software is determined at five years.

(f) Impairment of assets

Cash generating unit/ fixed assets / Investments are assessed for possible impairment at balance sheet date based on external and internal sources of information. Impairment losses, if any, are recognised as an expense in the statement of profit and loss. Impairment loss in respect of assets sold / scrapped are reversed and consequent profit or loss on such sale is accounted. Impairment loss, if any, is provided to the extent, the carrying amount of assets exceeds their recoverable amount. Recoverable amount is higher of an asset's net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life. Depreciation charged on assets impaired is adjusted in future period over its remaining useful life.

On annual basis, the company makes an assessment of any indicator that may lead to impairment of assets. An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. Recoverable amount is higher of an asset's net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life.

An impairment loss is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired.

The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

(g) Inventories :

Cost of inventories is ascertained on the weighted average basis. Cost comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition.

i. Raw Material & Components : Raw materials and components, stores and spares are stated at lower of cost and net realisable value.

ii. Consumable Tools :

Consumable tools are stated at cost or below cost.

iii. Work-in-progress and manufactured components :

Work-in-progress and manufactured are valued at lower of cost components and net realisable value computed including Material, Labour and Overheads related to the manufacturing operations

iv. Finished Goods :

Finished products are valued at lower of cost and net realisable value Cost is computed including Material, Labour and Overheads related to the manufacturing operations.

Excise duty is included in the value of finished products inventory.

(h) Investment

i. Long term investments are stated at cost less provision for diminution other than temporary in nature, if any. Current investments are stated at lower of cost and fair value.

ii. Investments that are readily realisable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as long-term investments.

(i) Employee Benefits

i. Provident fund is a defined contribution scheme established under a State Plan. The contributions to the scheme are charged to the statement of profit and loss in the year in which the contributions to the fund are accrued.

ii. Superannuation fund is a defined contribution scheme and contributions to the scheme are charged to the Statement of profit and loss in the year when the contributions accrue. The scheme is funded with an insurance company in the form of a qualifying insurance policy and other permissible securities.

iii. The company has a defined benefit gratuity scheme. For the defined benefit scheme, actuarial valuations are being carried out on a projected unit credit method at each balance sheet date. Actuarial gains and losses are recognised in full in the statement of profit and loss in the period in which they occur.

iv. Leave encashment benefit is provided on the basis of actuarial valuation done at the end of the year. The aforesaid leave liability is not funded.

(j) Research and Development

Revenue expenditure on research and development is charged to statement of profit and loss in the year in which it is incurred. Capital expenditure on research and development is included in additions to fixed assets under appropriate heads. Self manufactured R&D assets are carried at cost of manufacture.

(k) CENVAT Credit / Service Tax Credit

i. CENVAT credit utilised during the year is accounted in excise duty and unutilised CENVAT balance at the year end is considered as advance excise duty.

ii. Service tax credit utilised during the year towards excise liability is accounted in excise duty and unutilised service tax credit at the year-end is considered as advance Service Tax.

(l) Revenue Recognition

i. Revenue from sale of goods is recognised net of returns, product expiry claims and trade discount, on transfer of significant risk and rewards in respect of ownership to the buyer which is generally on dispatch of goods. Sales include excise duty but exclude sales tax and value added tax.

ii. In respect of incentives attributable to the export of goods, the Company following the accounting principle of matching revenue with the cost has recognised export incentive receivable when all conditions precedent to the eligibility of benefits have been satisfied and when it is reasonably certain of deriving the benefit.

iii. Revenue in respect of insurance/other claims, commission, etc. are recognised only when it is reasonably certain that the ultimate collection will be made.

iv. Interest income is recognised on time proportion method basis taking into account the amount outstanding and the rate applicable.

v. Dividend income is accounted when the right to receive the same is established.

(m) Borrowing Cost

Borrowing costs directly attributable to the acquisition or construction of qualifying assets are capitalised. Other borrowing costs are recognised as expenses in the period in which they are incurred. In determining the amount of borrowing costs eligible for capitalisation during a period, any income earned on the temporary investment of those borrowings is deducted from the borrowing costs incurred.

(n) Foreign Exchange Transactions

i) Transactions denominated in foreign currency are recorded at the exchange rate on the date of transaction. The exchange gain/loss on settlement / negotiation during the year is recognised in the Statement of Profit and Loss.

ii) Foreign currency transactions remaining unsettled at the end of the year are converted at year-end rates. Gain or loss arising on account of transactions covered by forward contract is recognised over the period of contracts.

iii. Monetary assets and liabilities at the end of the year are converted at the year end rate and the resultant gain or loss is accounted for in the Statement of Profit and Loss.

iv. The company has not used any derivative instrument except forward contracts which have been used for hedging its foreign currency exposure. The company does not undertake any speculative or trading activity through derivative instruments.

(o) Taxation

Tax expense comprises of current and deferred taxes.

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 income taxes reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set-off current tax assets against current tax liabilities and the deferred tax assets and the deferred tax liabilities related to the taxes on income levied by same governing taxation laws. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. In situations where the Company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that they can be realised against future taxable profits.

The carrying amount of 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 reasonably 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 write-down 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.

(p) Earnings per share

i. Basic and diluted earnings per share are calculated by dividing the net profit for the year/period attributed to equity shareholders by the weighted average number of equity shares outstanding during the year/period.

ii. For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

(q) Provisions, Contingent Liabilities and Contingent Assets

i. Provisions are recognised only when there is a present obligation as a result of past events and when a reliable estimate of the amount of the obligation can be made.

ii. Contingent liability is disclosed for possible obligations which will be confirmed only by future events not wholly within the control of the company or present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made.

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

(r) Operating Lease:

Leases where the lessor effectively retains substantially all risks and benefits of ownership for the leased term are classified as operating leases. Operating lease payments are recognized as expense in the statement of profit and loss account on a straight line basis over the lease term.

(s) Cash and cash equivalents

Cash and cash equivalents in the balance sheet comprise cash at bank, cheques on hand, cash in hand and short term investments with an original maturity of three months or less.


Mar 31, 2014

(a) Basis of preparation

The financial statements have been prepared to comply in all material respects with the notified accounting standards by the Companies Accounting Standards Rules, 2006 and the relevant provisions of the Companies Act, 1956 and Companies Act 2013 read with the General Circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013 and General Circular 08/2014 dated 4th April 2014 with respect to the Financial Statements. The financial statements have been prepared under the historical cost convention, on an accrual basis of accounting.

The classification of assets and liabilities of the Company is done into current and non-current based on the operating cycle of the business of the Company. The operating cycle of the business of the Company is less than twelve months and therefore all current and non-current classifications are done based on the status of realisability and expected settlement of the respective asset and liability within a period of twelve months from the reporting date as required by Revised Schedule VI to the Companies Act 1956.

The accounting policies adopted in the preparation of the financial statements are consistent with those used in the previous year.

(b) Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period end. Although these estimates are based upon management''s best knowledge of current events and actions, actual results could differ from these estimates. Difference between the actual results and estimates are recognized in the period in which the results are known.

(c) Inflation

Assets and liabilities are shown at historical cost. No adjustments are made for changes in purchasing power of money.

(d) Fixed Assets

i. Fixed assets are stated at cost less accumulated depreciation and impairment losses, if any.

ii. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition of its intended use.

iii. Borrowing costs relating to acquisition of fixed assets which take a substantial period of time to get ready for its intended use are also included to the extent they relate to the period till such assets are ready to be put to use.

(e) Depreciation and Amortisation

Depreciation on all assets of the Company is charged on straight line method over the useful life of assets estimated by the management in the manner provided in Schedule XIV of the Companies Act, 1956 for the proportionate period of use during the year. Intangible assets are amortised over the economic useful life estimated by the management. The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal / external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the asset''s net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pretax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

(f) Impairment of assets

Cash generating unit / fixed assets / Investments are assessed for possible impairment at balance sheet date based on external and internal sources of information. Impairment losses, if any, are recognised as an expense in the statement of profit and loss. Impairment loss in respect of assets sold / scrapped are reversed and consequent profit or loss on such sale is accounted. Impairment loss, if any, is provided to the extent, the carrying amount of assets exceeds their recoverable amount. Recoverable amount is higher of an asset''s net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life. Depreciation charged on assets impaired is adjusted in future period over its remaining useful life.

(g) Inventories

Cost of inventories is ascertained on the weighted average basis. Cost comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition.

i. Raw Material & Components

Raw materials and components, stores and spares are stated at lower of cost and net realisable value.

ii. Consumable Tools

Consumable tools are stated at cost or below cost.

iii.Work-in-progress and manufactured components

Work-in-progress and manufactured components are valued at lower of cost manufactured components and net realisable value computed including Material, Labour and Overheads related to the manufacturing operations.

iv. Finished Goods

Finished products are valued at lower of cost and net realisable value Cost is computed including Material, Labour and Overheads related to the manufacturing operations.

Excise duty is included in the value of finished products inventory.

(h) Investment

i. Long term investments are stated at cost less provision for diminution other than temporary in nature, if any. Current investments are stated at lower of cost and fair value.

ii. Investments that are readily realisable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as long-term investments.

(i) Employee Benefits

i. Provident fund is a defined contribution scheme established under a State Plan. The contributions to the scheme are charged to the statement of profit and loss in the year in which the contributions to the fund are accrued.

ii. Superannuation fund is a defined contribution scheme and contributions to the scheme are charged to the Statement of profit and loss in the year when the contributions accrue. The scheme is funded with an insurance company in the form of a qualifying insurance policy and other permissible securities.

iii. The company has a defined benefit gratuity scheme. For the defined benefit scheme, actuarial valuations are being carried out on a projected unit credit method at each balance sheet date. Actuarial gains and losses are recognised in full in the statement of profit and loss in the period in which they occur.

iv. Leave encashment benefit is provided on the basis of actuarial valuation done at the end of the year. The aforesaid leave liability is not funded.

(j) Research and Development

Revenue expenditure on research and development is charged to statement of profit and loss in the year in which it is incurred. Capital expenditure on research and development is included in additions to fixed assets under appropriate heads. Self manufactured R&D assets are carried at cost of manufacture.

(k) CENVAT Credit / Service Tax Credit

i. CENVAT credit utilised during the year is accounted in excise duty and unutilised CENVAT balance at the year end is considered as advance excise duty.

ii. Service tax credit utilised during the year towards excise liability is accounted in excise duty and unutilised service tax credit at the year-end is considered as advance Service Tax.

(I) Revenue Recognition

i. Sales comprise of sale of goods and spare parts and are net of trade discount and sales returns. Sales Include excise duty but exclude sales tax and value added tax. Sales are recognised when the goods are dispatched and all risks and rewards are transferred to the buyer. Income from Installation and commissioning is recognised after the service is rendered.

ii. Interest income is recognised on time proportion method basis taking into account the amounts outstanding and the rate applicable.

iii. Dividend income is accounted when the right to receive the same is established by the Balance sheet date .

(m) Borrowing Cost

Borrowing costs directly attributable to the acquisition or construction of qualifying assets are capitalised. Other borrowing costs are recognised as expenses in the period in which they are incurred. In determining the amount of borrowing costs eligible for capitalisation during a period, any income earned on the temporary investment of those borrowings is deducted from the borrowing costs incurred.

(n) Foreign Exchange Transactions

i. Transactions denominated in foreign currency are recorded at the exchange rate on the date of transaction. The exchange gain / loss on settlement / negotiation during the year is recognised in the Statement of Profit and Loss.

ii. Foreign currency transactions remaining unsettled at the end of the year are converted at year-end rates. Gain or loss arising on account of transactions covered by forward contract is recognised over the period of contracts.

iii. Monetary assets and liabilities at the end of the year are converted at the year end rate and the resultant gain or loss is accounted for in the Profit and Loss Account.

iv. The company has not used any derivative instrument except forward contracts which have been used for hedging its foreign currency exposure. The company does not undertake any speculative or trading activity through derivative instruments.

(o) Taxation

Tax expense comprises of current and deferred taxes.

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 income taxes reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set-off current tax assets against current tax liabilities and the deferred tax assets and the deferred tax liabilities related to the taxes on income levied by same governing taxation laws. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. In situations where the Company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that they can be realised against future taxable profits. The carrying amount of 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 reasonably 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 write-down 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.

(p) Earnings per share

i. Basic and diluted earnings per share are calculated by dividing the net profit for the year / period attributed to equity shareholders by the weighted average number of equity shares outstanding during the year / period.

ii. For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

(q) Provisions, Contingent Liabilities and Contingent Assets

i. Provisions are recognised only when there is a present obligation as a result of past events and when a reliable estimate of the amount of the obligation can be made.

ii. Contingent liability is disclosed for possible obligations which will be confirmed only by future events not wholly within the control of the company or present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made.

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

(r) Cash and cash equivalents

Cash and cash equivalents in the balance sheet comprise cash at bank, cheques on hand, cash in hand and short term investments with an original maturity of three months or less.


Mar 31, 2013

(a) Basis of preparation

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Comapny has prepared these financial statements to comply in all material respects with the notified accounting standards by 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 of accounting and under the historical cost convention

The classification of assets and liabilities of the Company is done into current and non-current based on the operating cycle of the business of the Company. The operating cycle of the business of the Company is less than twelve months and therefore all current and non-current classifications are done based on the status of readability and expected settlement of the respective asset and liability within a period of twelve months from the reporting date as required by Revised Schedule VI to the Companies Act 1956.

The accounting policies adopted in the preparation of the financial statements are consistent with those used in the previous year.

|b) Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period end. Although these estimates are based upon management''s best knowledge of current events and actions, actual results could differ from these estimates. Difference between the actual results and estimates are recognized in the period in which the results are known.

(c) Inflation

Assets and liabilities are shown at historical cost. No adjustments are made for changes in purchasing power of money.

Fixed Assets

i. Fixed assets are stated at their original cost of acquisition including incidental expenses related to acquisition and installation of the concerned assets. ii. The fixed assets manufactured by the company are stated at manufacturing cost. Fixed assets are shown net of accumulated depreciation. iii. Intangible Assets are recorded at cost of acquisition.

(e) Depreciation and Amortisation

Depreciation on fixed assets is provided on straight-line method at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956.

Depreciation of R&D assets (being prototype) is being done over a useful life of 5 years.

(fj Impairment of assets

Cash generating unit/ fixed assets/Investments are assessed for possible impairment at balance sheet date based on external and internal sources of information. Impairment losses, if any, are recognised as an expense in the statement of profit and loss. Impairment loss in respect of assets sold I scrapped are reversed and consequent profit or loss on such sale is accounted. Impairment loss, if any, is provided to the extent, the carrying amount of assets exceeds their recoverable amount. Recoverable amount is higher of an asset''s net selling price and its value in use.

Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life. Depreciation charged on assets impaired is adjusted in future period over its remaining useful life.

|g) Inventories

Cost of inventories is ascertained on the weighted average basis. Cost comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition.

i. Raw Material & Components Raw materials and components, stores and spares are stated at lower of cost and net realisable value.

ii. Consumable Tools Consumable tools are stated at cost or below cost.

iii. Work-in-progress and manufactured components Work-in-progress and manufactured components are valued at cost computed including Material, Labour and Overheads related to the manufacturing operations

iv. Finished Goods Finished products are valued at lower of cost and net realisable value Cost is computed including Material, Labour and Overheads related to the manufacturing operations.

Excise duty is included in the value of finished products inventory.

(h) Investment

Long term investments are stated at cost less provision for diminution other than temporary in nature, if any. Current investments are stated at lower of cost and fair value.

(I) Employee Benefits

i. Provident fund is a defined contribution scheme established under a State Plan. The contributions to the scheme are charged to the statement of profit and loss in the year in which the contributions to the fund are accrued. ii. Superannuation fund is a defined contribution scheme and contributions to the scheme are charged to the Statement of profit and loss in the year when the contributions accrue. The scheme is funded with an insurance company in the form of a qualifying insurance policy. iii. The company has a defined benefit gratuity scheme. For the defined benefit scheme, actuarial valuations are being carried out on unit credit method at each balance sheet date. Actuarial gains and losses are recognised

in full in the statement of profit and loss in the period in which they occur. iv. Leave encashment benefit is provided on the basis of actuarial valuation done at the end of the year. The aforesaid leave liability is not funded.

(J) Research and Development

Revenue expenditure on research and development is charged to statement of profit and loss in the year in which it is incurred. Capital expenditure on research and development is included in additions to fixed assets under appropriate heads. Self manufactured R&D assets are carried at cost of manufacture.

(k) CENVAT Credit / Service Tax Credit

i CENVAT credit utilised during the year is accounted in excise duty and unutilised CENVAT balance at the year end is considered as advance excise duty. ii Service tax credit utilised during the year towards excise liability is.accounted in excise duty and unutilised service tax credit at the year-end is considered as advance Service Tax

(I) Revenue Recognition

i. Sales comprise of sale of goods and spare parts and are net of trade discount and sales returns. Sales are recognised when the goods are dispatched and all risks and rewards are transferred to the buyer. Income from Installation and commissioning is recognised after the service is rendered.

ii. Interest income is recognised on time proportion method basis taking into account the amounts outstanding and the rate applicable.

iii. Dividend income is accounted when the right to receive the same is established by the Balane sheet date

|m) Borrowing Cost

Borrowing costs directly attributable to the acquisition or construction of qualifying assets are capitalised. Other borrowing costs are recognised as expenses in the period in which they are incurred. In determining the amount of borrowing costs eligible for capitalisation during a period, any income earned on the temporary investment of those borrowings is deducted from the borrowing costs incurred.

(n) Foreign Exchange Transactions

i. Transactions denominated in foreign currency are recorded at the exchange rate on the date of transaction. The exchange gain/loss on settlement / negotiation during the year is recognised in the Statement of Profit and Loss.

ii. Foreign currency transactions remaining unsettled at the end of the year are converted at year-end rates. Gain or toss arising on account of transactions covered by forward contract is recognised over the period of contracts.

iii. Current assets and current liabilities at the end of the year are converted at the year end rate and the resultant gain or loss is accounted for in the Profit and Loss Account.

iv. The company has not- used any derivative instrument except forward contracts which have been used for hedging its foreign currency exposure. The company does not undertake any speculative or trading activity through derivative instruments.

(o) Taxation

Tax expense comprises of current and deferred taxes.

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 income taxes reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set-off current tax assets against current tax liabilities and the deferred tax assets and the deferred tax liabilities related to the taxes on income levied by same governing taxation laws. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. In situations where the Company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that they can be realised against future taxable profits.

lp) Earnings per share

i. Basic and diluted earnings per share are calculated by dividing the net profit for the year/period attributed to equity shareholders by the weighted average number of equity shares outstanding during the year/period.

ii. For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

(q) Provisions, Contingent Liabilities and Contingent Assets

i. Provisions are recognised only when there is a present obligation as a result of past events and when a reliable estimate of the amount of the obligation can be made.

ii. Contingent liability is disclosed for possible obligations which will be confirmed only by future events not wholly within the control of the company or present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made.

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

(r) Cash and cash equivalents

Cash and cash equivalents in the balance sheet comprise cash at bank, cheques on hand, cash in hand and short term investments with an original maturity of three months or less.


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 (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the notified accounting standards by 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 of accounting and under the historical cost convention.

The classification of assets and liabilities of the Company is done into current and non-current based on the operating cycle of the business of the Company. The operating cycle of the business of the Company is less than twelve months and therefore all current and non-current classifications are done based on the status of readability and expected settlement of the respective asset and liability within a period of twelve months from the reporting date as required by Revised Schedule VI to the Companies Act 1956.

The accounting policies adopted in the preparation of the financial statements are consistent with those used in the previous year.

b Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period end. Although these estimates are based upon management's best knowledge of current events and actions, actual results could differ from these estimates. Difference between the actual results and estimates are recognized in the period in which the results are known.

c Inflation

Assets and liabilities are shown at historical cost. No adjustments are made for changes in purchasing power of money.

d Fixed Assets

i Fixed assets are stated at their original cost of acquisition including incidental expenses related to acquisition and installation of the concerned assets.

ii The fixed assets manufactured by the company are stated at manufacturing cost. Fixed assets are shown net of accumulated depreciation.

iii Intangible Assets are recorded at cost of acquisition.

e Depreciation and Amortization

Depreciation on fixed assets is provided on straight-line method at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956.

Depreciation of R&D assets (being prototype) is being done over a useful life of 5 years, f Impairment of assets Cash generating unit / fixed assets / Investments are assessed for possible impairment at balance sheet date based on external and internal sources of information. Impairment losses, if any, are recognized as an expense in the statement of profit and loss. Impairment loss in respect of assets sold / scrapped are reversed and consequent

profit or loss on such sale is accounted. Impairment loss, if any, is provided to the extent, the carrying amount of assets exceeds their recoverable amount. Recoverable amount is higher of an asset's net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life. Depreciation charged on assets impaired is adjusted in future period over its remaining useful life.

g Inventories

Cost of inventories is ascertained on the weighted average basis. Cost comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition.

i Raw Material & Components Raw materials and components, stores and spares are stated at lower of cost and net realizable value.

ii Consumable Tools Consumable tools are stated at cost or below cost.

iii Work-in-progress and manufactured Work-in-progress and manufactured components are valued at components cost computed including Material, Labour and Overheads related to the manufacturing operations

iv Finished Goods Finished products are valued at lower of cost and net realizable value Cost is computed including Material, Labour and Overheads related to the manufacturing operations.

Excise duty is included in the value of finished products inventory,

h. Investment

Long term investments are stated at cost less provision for diminution other than temporary in nature, if any. Current investments are stated at lower of cost and fair value.

i Employee Benefits

i Provident fund is a defined contribution scheme established under a State Plan. The contributions to the scheme are charged to the statement of profit and loss in the year in which the contributions to the fund are accrued.

ii Superannuation fund is a defined contribution scheme and contributions to the scheme are charged to the Statement of profit and loss in the year when the contributions accrue. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

iii The company has a defined benefit gratuity scheme. For the defined benefit scheme, actuarial valuations are being carried out on unit credit method at each balance sheet date. Actuarial gains and losses are recognized in full in the statement of profit and loss in the period in which they occur.

iv Leave encashment benefit is provided on the basis of actuarial valuation done at the end of the year. The aforesaid leave liability is not funded.

j Research and Development

Revenue expenditure on research and development is charged to statement of profit and loss in the year in which it is incurred. Capital expenditure on research and development is included in additions to fixed assets under appropriate heads. Self manufactured R&D assets are carried at cost of manufacture.

k CEIMVAT Credit / Service Tax Credit

i CENVAT credit utilized during the year is accounted in excise duty and unutilized CENVAT balance at the year end is considered as advance excise duty.

ii Service tax credit utilized during the year towards excise liability is accounted in excise duty and unutilized service tax credit at the year-end is considered as advance Service Tax.

I Revenue Recognition

i Sales comprise of sale of goods and spare parts and are net of trade discount and sales returns. Sales are recognized when the goods are dispatched and all risks and rewards are transferred to the buyer. Income from Installation and commissioning is recognized after the service is rendered.

ii Interest income is recognized on time proportion method basis taking into account the amounts outstanding and the rate applicable.

iii Dividend income is accounted when the right to receive the same is established by the Balane Sheet date.

m Borrowing Cost

Borrowing costs directly attributable to the acquisition or construction of qualifying assets are capitalized. Other borrowing costs are recognized as expenses in the period in which they are incurred. In determining the amount of borrowing costs eligible for capitalization during a period, any income earned on the temporary investment of those borrowings is deducted from the borrowing costs incurred.

n Foreign Exchange Transactions

i) Transactions denominated in foreign currency are recorded at the exchange rate on the date of transaction. The exchange gain/ loss on settlement/ negotiation during the year is recognised in the Statement of Profit and Loss.

ii) Foreign currency transactions remaining unsettled at the end of the year are converted at year-end rates. Gain or loss arising on account of transactions covered by forward contract is recognized over the period of contracts.

iii) Current assets and current liabilities at the end of the year are converted at the yearend rate and the resultant gain or loss is accounted for in the Profit and Loss Account.

iv) The company has not used any derivative instrument except forward contracts which have been used for hedging its foreign currency exposure. The company does not undertake any speculative or trading activity through derivative instruments.

o Taxation

Tax expense comprises of current and deferred taxes.

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 income taxes reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set-off current tax assets against current tax liabilities and the deferred tax assets and the deferred tax liabilities related to the taxes on income levied by same governing taxation laws. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. In situations where the Company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits.

p Earnings per share

i Basic and diluted earnings per share are calculated by dividing the net profit for the year / period attributed to equity shareholders by the weighted average number of equity shares outstanding during the year/ period.

ii For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

q Provisions, Contingent Liabilities and Contingent Assets

i. Provisions are recognized only when there is a present obligation as a result of past events and when a reliable estimate of the amount of the obligation can be made.

ii. Contingent liability is disclosed for possible obligations which will be confirmed only by future events not wholly within the control of the company or present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made.

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

r Cash and cash equivalents

Cash and cash equivalents in the balance sheet comprise cash at bank, cheques on hand, cash in hand and short term investments with an original maturity of three months or less.


Mar 31, 2011

Basis for preparation of accounts

The financial statements have been prepared to comply in all material respects with the notified accounting standards by the Companies (Accounting Standards) Rules, 2006 and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared under the historical cost convention, on an accrual basis of accounting. The accounting policies discussed more fully below, are consistent with those used in the previous year.

Revenue Recognition

Sales comprise of sale of goods and spare parts and are net of trade discount and sales returns.

Interest income is recognised on time proportion method basis taking into account the amounts outstanding and the rate applicable.

Dividend income is accounted when the right to receive the same is established.

Employee benefits

(i) Provident fund is a defined contribution scheme established under a State Plan. The contributions to the scheme are charged to the profit and loss account in the year in which the contributions to the fund are accrued.

(ii) Superannuation fund is a defined contribution scheme and contributions to the scheme are charged to the profit and loss account in the year when the contributions accrue. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

(iii) The company has a defined benefit gratuity scheme. For the defined benefit scheme, actuarial valuations are being carried out at each balance sheet date. Actuarial gains and losses are recognised in full in the profit and loss account in the period in which they occur.

iv) Leave encashment benefit is provided on the basis of actuarial valuation done at the end of the year. The aforesaid leave liability is not funded.

Research and Development

Revenue expenditure on research and development is charged to profit and loss account in the year in which it is incurred. Capital expenditure on research and development is included in additions to fixed assets under appropriate heads. Self manufactured R&D assets are carried at cost of manufacture.

Depreciation

Depreciation on fixed assets is provided on straight-line method at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956.

Amortisation of R&D assets (being prototype) is being done over a useful life of 5 years.

Transactions in foreign currencies

Transactions in foreign currencies are accounted for in the following manner:

Transactions covered by forward contracts are accounted for by recognising the difference between the forward rate and the exchange rate on the date of the transaction as income or expenditure over the life of the contract.

Transactions not covered by forward contracts are accounted for in the following manner:

(i) Export sales and import purchases are accounted for at exchange rates prevailing at the time of the transactions.

(ii) Gains/ losses arising out of the foreign currency transactions are recognised in the profit and loss account.

(iii) Other assets and liabilities are restated at the rates ruling at the year-end and the differences on such retranslation are recognised in the profit and loss account.

The company has not used any derivative instrument except forward contracts which have been used for hedging its foreign currency exposure. The company does not undertake any speculative or trading activity through derivative instruments.

Fixed assets

Fixed assets are stated at their original cost of acquisition including incidental expenses related to acquisition and installation of the concerned assets.

The fixed assets manufactured by the company are stated at manufacturing cost. Fixed assets are shown net of accumulated depreciation.

Impairment of assets

Cash generating unit/ assets are assessed for possible impairment at balance sheet date based on external and internal sources of information. Impairment losses, if any, are recognised as an expense in the profit and loss account.

Investments

Long term investments are stated at cost less provision for diminution other than temporary in nature, if any. Current investments are stated at lower of cost and fair value, determined on a portfolio basis.

Borrowing Cost

Borrowing costs directly attributable to the acquisition or construction of qualifying assets are capitalised. Other borrowing costs are recognised as expenses in the period in which they are incurred. In determining the amount of borrowing costs eligible for capitalisation during a period, any income earned on the temporary investment of those borrowings is deducted from the borrowing costs incurred.

Inventories

Cost of inventories is ascertained on the weighted average basis. Cost comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition.

Raw materials and components, stores and spares are stated at lower of cost and net realisable value.

Consumable tools are stated at cost or below cost.

Work-in-progress and manufactured components are valued at cost.

Finished products are valued at lower of cost and net realisable value.

Excise duty is included in the value of finished products inventory.

Provision for doubtful debts/ advances

Sundry debtors / advances are stated after making adequate provision for doubtful debts/advances.

Cash and Cash Equivalents

Cash and cash equivalents in the balance sheet comprise cash at bank, cheques on hand, cash in hand and short term investments with an original maturity of three months or less.

Tax Expense

Tax expense comprises of current and deferred taxes.

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 income taxes reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years after considering the tax holiday period as required by the Accounting Standard Interpretation issued by the Institute of Chartered Accountants of India. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised.

Provisions, contingent liabilities and contingent assets

Provisions are recognised only when there is a present obligation as a result of past events and when a reliable estimate of the amount of the obligation can be made. Contingent liability is disclosed for:

i> possible obligations which will be confirmed only by future events not wholly vithin the control of the company or

ii) present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made. Contingent assets are neither recognized nor disclosed in the financial statements.


Mar 31, 2010

Basis for preparation of accounts

The financial statements have been prepared under the historical cost convention, on an accrual basis of accounting in accordance with the generally accepted accounting principles, accounting standards notified under section 211(3C) of the Companies Act, 1956, and the relevant provisions thereof.

Sales

Sales comprise of sale of goods and spare parts and are net of trade discount and sales returns.

Employee benefits

(i) Provident fund is a defined contribution scheme established under a State Plan. The contributions to the scheme are charged to the profit and loss account in the year in which the contributions to the fund are accrued.

(ii) Superannuation fund is a defined contribution scheme and contributions to the scheme are charged to the profit and loss account in the year when the contributions accrue. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

(iii) The company has a defined benefit gratuity scheme. For the defined benefit scheme, acturial valuations are being carried out at each balance sheet date. Acturial gains and losses are recognised in full in the profit and loss account in the period in which they occur.

(iv) Leave encashment benefit is provided on the basis of actuarial valuation done at the end of the year. The aforesaid leave liability is not funded.

Research and development

Revenue expenditure on research and development is charged to profit and loss account in the year in which it is incurred. Capital expenditure on research and development is included in additions to fixed assets under appropriate heads.

Depreciation

Depreciation on fixed assets is provided on straight-line method at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956.

Transactions in foreign currencies

Transactions in foreign currencies are accounted for in the following manner :

Transactions covered by forward contracts are accounted for by recognising the difference between the forward rate and the exchange rate on the date of the transaction as income or expenditure over the life of the contract.

Transactions not covered by forward contracts are accounted for in the following manner :

(i) Export sales and import purchases are accounted for at exchange rates prevailing at the time of the transactions.

(ii) Gains/losses arising out of the foreign currency transactions are recognised in the profit and loss account.

(iii) Other assets and liabilities are restated at the rates ruling at the year-end and the differences on such retranslation are recognised in the profit and loss account.

The company has not used any other derivative instrument except forward contracts which have been used for hedging its foreign currency exposure. The company has not undertaken any speculative or trading activity through derivative instruments.

As at the year end the company had unutilised foreign exchange forward contracts of USD 3,500,000 (previous year USD 9,363,530)

Fixed assests

Fixed assets are stated at their original cost of acquisition including incidental expenses related to acquisition and installation of the concerned assests.

The fixed assests manufactured by the company are stated at manufacturing cost. Fixed assets are shown net of accumulated depreciation.

Impairment of assets

Cash generating units/assets are assessed for possible impairment at balance sheet date based on external and internal sources of information. Impairment losses, if any, are recognised as an expense in the profit and loss account.

Investments

Long term investments are stated at cost less other than temporary diminution in value, if any. Currrent investments are stated at lower of cost and fair value, determined on a portfolio basis.

Inventories

Cost of inventories is generally ascertained on the weighted average basis. Cost comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition.

Raw materials and components, stores and spares are stated at lower of cost and net realisable value.

Consumable tools are stated at cost or under.

Work-in-progress and manufactured components are valued at estimated cost. Finished products are valued at lower of cost and net realisable value. Excise duty is included in the value of finished products inventory.

Provision for doubtful debts/advances

Sundry debtors/advances are stated after making adequate provision for doubtful debts/advances.

Taxation

Provision for income-tax is made on the basis of the estimated taxable income per the provisions of the Income-tax Act, 1961 and the relevant Finance Act. The company provides for deferred tax using the liability method, based on the tax effects of timing differences resulting from the recognition of items in the financial statements and in estimating its current income-tax provision.

Provisions, contingent liabilities and contingent assets

Provisions are recognised only when there is a present obligation as a result of past events and when a reliable estimate of the amount of the obligation can be made. Contingent liability is disclosed for (i) possible obligations which will be confirmed only by future events not wholly within the control of the company or

(ii) present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made. Contingent assets are not recognised in the financial statements since this may result in the recognition of income that may never be realised.

 
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