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Accounting Policies of Pitti Laminations Ltd. Company

Mar 31, 2016

Note-1.1 : Basis of Preparation of Financial Statements

(a) Basis of Accounting

The financial statements of Pitti Laminations Limited (PLL) or Company have been prepared and presented under the historical cost convention, on the accrual basis of accounting in accordance with the accounting principles generally accepted in India (‘Indian GAAP’) and comply with the Accounting standards prescribed in the Companies (Accounting Standards) Rules, 2006 which continue to apply under Section 133 of the Companies Act, 2013 (‘the Act’) read with Rule 7 of the Companies (Accounts) Rules, 2014.

(b) Use of Estimates

The preparation of financial statements in conformity with Indian GAAP requires judgments, estimates and assumptions to be made that affect the reported amount of assets and liabilities, disclosure of contingent liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known/ materialized.

(c) Current/ Non Current Classification

All assets and liabilities have been classified as current or noncurrent as per the Company’s normal operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013. Based on the nature of products and the time between acquisition of assets for processing and their realization in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current/non-current classification of assets and liabilities.

Note-1.2 : Tangible and Intangible Assets

Fixed Assets are stated at cost, less accumulated depreciation. All expenditure of capital nature is capitalized. Such expenditure comprises of purchase price, import duties, levies (other than refundable) and any directly attributable cost of bringing the assets to their working condition for intended use.

Pursuant to the requirements under Schedule II to the Companies Act, 2013, the Company has identified and determined the cost of each component of an asset separately when the component has a cost which is significant to the total cost of the asset and has useful life that is materially different from that of the remaining asset.

Capital Work in Progress & Capital Advances

Cost of Assets not ready for intended use, as on the balance sheet date, is shown as capital work in progress. Advances given towards acquisition of fixed assets outstanding at each balance sheet date are disclosed as Long Term Loans & Advances.

Note-1.3 : Depreciation

Depreciation on fixed assets is provided using straight line method based on the useful lives as prescribed under Schedule II to the Companies Act, 2013 and is charged to the Statement of Profit and Loss. Depreciation for assets purchased / sold during a period is proportionately charged.

Significant components of assets identified separately pursuant to the requirements under Schedule II of the Companies Act, 2013 are depreciated separately over their useful life.

All assets costing individually Rs.5, 000 and below are depreciated fully in the year of purchase.

Note-1.4 : Revenue / Expenditure Recognition

Revenue from sale of goods is recognized on transfer of all significant risks and rewards of ownership to the buyer. The amount recognized as sale is exclusive of sales tax/VAT and is net of returns & discounts. Sales are stated gross of excise duty as well as net of excise duty (on goods manufactured and outsourced), excise duty being the amount included in the amount of gross turnover.

Interest income is recognized on the time proportion basis.

Expenditure is accounted for on accrual basis and provision is made for all known losses and obligations.

Note-1.5 : Investments

Investments are classified into current and long-term investments. Investments that are readily realizable and intended to be held for not more than a year from the date of acquisition are classified as current investments. All other investments are classified as long term investments. However, that part of long term investments which are expected to be realized within twelve months from Balance Sheet date is also presented under “Current Investment” under “Current portion of long term investments” in consonance with the current / non-current classification of Schedule III of the Act.

Current investments are stated at the lower of cost and fair value. The comparison of cost and fair value is done separately in respect of each category of investments.

Long-term investments are stated at cost. A provision for diminution in the value of long-term investments is made only if such a decline is other than temporary in the opinion of the management. Reversal of such provision for diminution is made when there is a rise in the value of long term investment, or if the reasons for the decline no longer exist.

On disposal of an investment, the difference between its carrying amount and net disposal proceeds is recognized in the Statement of Profit and Loss.

Note-1.6 : Inventories

(a) Raw Materials, work in progress, finished goods, stores, spares and consumables are carried at the lower of cost and net realizable value.

(b) Following method is applied in determining cost of raw materials, work in progress, finished goods, stores, spares and consumables. Cost of inventory comprises all costs of purchase, duties, taxes (other than those subsequently recoverable from tax authorities) and all other costs incurred in bringing the inventory to their present location and condition.

(c) Cost of finished goods and work-in-process includes the cost of raw materials, an appropriate share of fixed and variable production overheads and other costs incurred in bringing the inventories to their present location and condition.

(d) Net realizable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and the estimated costs necessary to make the sale.

Note-1.7 : Foreign Currency Transactions And Balances

(a) Initial Recognition

Foreign currency transactions are recorded using the exchange rates prevailing on the date’s respective transactions. Exchange differences arising on foreign currency transactions settled during the year are recognized in the Statement of Profit and Loss.

(b) Measurement of foreign currency items at the Balance Sheet date

Monetary assets and liabilities denominated in foreign currencies as at the balance sheet date, not covered by forward exchange contracts, are translated at year end rates. The resultant exchange differences are recognized in the Statement of Profit and Loss. Non-Monetary assets are recorded at the rates prevailing on the date of the transaction.

(c) Forward Contracts

The Company enters into forward exchange contracts to hedge against its foreign currency exposures relating to the underlying transactions and firm commitments.

The Company does not enter into any derivative instruments for trading or speculative purposes.

The premium or discount arising at the inception of forward exchange contract is amortized and recognized as an expense/ income over the life of the contract. Exchange differences on such contracts are recognized in the Statement of Profit and Loss in the period in which the exchange rates change. Any Profit or Loss arising on cancellation or renewal of such forward exchange contract is also recognized as income or expense for the period.

Note-1.8 : Employee Benefits

Defined Contribution Plan:

Contribution as per Employee’s Provident Funds and Miscellaneous Provisions Act, 1952 towards Provident Fund and Family Pension Fund are provided for and payments in respect thereof are made to the relevant authorities on actual basis.

Defined Benefit Plan:

Gratuity: In accordance with applicable Indian Laws, the company provides gratuity, a defined benefit retirement plan (the Gratuity Plan) covering all employees. The gratuity plan provides a lump sum payment to vested employees, at retirement or termination of employment, an amount based on the respective employee’s last drawn salary and the years of employment with the company. Liability with regard to Gratuity Plan is accrued based on actuarial valuation at the Balance Sheet date.

Leave Encashment: In accordance with applicable Indian Laws, the company provides Encashment of Leave, a defined benefit plan (Leave Encashment Plan) covering all employees. Liability with regard to Leave Encashment Plan is accrued based on actuarial valuation at the Balance Sheet date.

Note-1.9 : Borrowing Costs

Borrowing cost includes interest, amortization of ancillary costs incurred in connection with the arrangement of borrowings and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost, if any.

Borrowing costs, which are directly attributable to the acquisition/ construction of fixed assets, till the time such assets are ready for intended use, are capitalized as part of the costs of such assets. Other Borrowing costs are recognized as expenses in the year in which they are incurred.

Note-1.10 : Leases

Assets acquired by way of finance lease are capitalized at the lower of the fair value and the present value of the minimum lease payments at the inception of the lease term and disclosed as leased assets. Lease payments are apportioned between finance charge and reduction of the lease liability based on the implicit rate of return. Finance charges are recognized as finance costs in the Statement of Profit and Loss. Lease rentals paid in respect of operating leases are recognized as an expense in the statement of Profit and Loss.

Note-1.11 : Impairment

An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to the Profit and Loss Statement 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.

Note-1.12 : Earnings per Share

The basic earnings per share (‘EPS’) is computed by dividing the net profit after tax for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes) by weighted average number of equity shares outstanding during the year.

For the purpose of calculating diluted earning’s per share, the net profit after tax for the period 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. The dilutive potential equity shares are deemed to be converted as of the beginning of the year, unless they have been issued at a later date.

Note-1.13 : Segment Reporting

Segments are identified having regard to the dominant source and nature of risks and returns and internal organization and management structure. The Company has considered business segments as the primary segments for disclosure.

Geographical segment is recognized as Secondary Segment.

Note-1.14 : Provisions and Contingencies

The Company creates a provision when there exists a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not require an outflow of resources. When there is a possible obligation or a present obligation in respect of which likelihood of outflow of resources is remote, no provision or disclosure is made.

Note- 1.15 : Taxation

Tax expense comprises of current tax (i.e. amount of tax for the period determined in accordance with the Income Tax Act, 1961) and deferred tax charge or credit (reflecting the tax effects of timing differences between accounting income and taxable income for the period).

(a) Current Tax:

The provision for taxation is based on assessable profits of the Company as determined under the Income Tax Act, 1961.

(b) Deferred Tax :

The Company is providing and recognizing deferred tax on timing differences between taxable income and accounting income subject to consideration of prudence.


Mar 31, 2014

Note 1.1 BASIS OF ACCOUNTING

The financial statements of Pitti Laminations Limited (PLL or Company) have been prepared and presented in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the basis of a going concern with revenues recognized and expenses accounted on their accrual.

Note 1.2 FIXED ASSETS

Fixed Assets are stated at historical cost. Expenditure which is of capital nature is capitalized. Such expenditure comprises of purchase price, import duties, levies and any directly attributable cost of bringing the assets to their working condition for intended use. Depreciation is provided (except in the case of leasehold property which is being amortized over the period of lease) on the Straight Line Method (SLM) and at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956.

Note 1.3 REVENUE / EXPENDITURE RECOGNITION

Revenue is recognized when it can be reliably measured and when all significant risks and rewards/ownership are transferred to the customer.

Expenditure is accounted for on accrual basis and provision is made for all known losses and obligations.

Note 1.4 INVESTMENTS

Non-current investments are stated at cost, and provision is made when there is a decline other than temporary in the carrying value of such investments, determined separately in respect of each category of investment.

Note 1.5 INVENTORIES

Inventories are valued as under:

Sl Particulars Basis of Valuation No.

1 Raw Material Weighted average cost or net realizable value whichever is lower

2 Work In Process Weighted average cost or net realizable value whichever is lower

3 Finished Goods Weighted average cost or net realizable value whichever is lower

4 Stores & Spares Weighted average cost or net realizable value whichever is lower

5 Scrap At Realizable value

6 Press Tools & Dies Tools & Dies manufactured in the Company''s in-house Tool Room are valued at cost on a consistent basis. Consumption of Tools is calculated on the actual wear and tear of these Tools & Dies. Obsolete tools and tools which have become more than three years old are written off net of salvage value.

The cost of inventories comprises of all costs of purchases, cost of conversion and other costs incurred in bringing the inventories to their present conditions.

Net realizable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and the estimated costs necessary to make the sale.

Note 1.6 RETIREMENT BENEFITS

1.6.1 Defined Contribution Plan:

Contribution as per Employee''s Provident Funds and Miscellaneous Provisions Act, 1962 towards Provident Fund and Family Pension Fund are provided for and payments in respect thereof are made to the relevant authorities on actual basis.

1.6.2 Defined Benefit Plan:

a) Gratuity: In accordance with applicable Indian Laws, the company provides gratuity, a defined benefit retirement plan (the Gratuity Plan) covering all employees. The gratuity plan provides a lump sum payment to vested employees, at retirement or termination of employment, an amount based on the respective employee''s last drawn salary and the years of employment with the company. Liability with regard to Gratuity Plan is accrued based on actuarial valuation at the Balance Sheet date.

b) Leave Encashment: In accordance with applicable Indian Laws, the company provides Encashment of Leave, a defined benefit plan (Leave Encashment Plan) covering all employees. Liability with regard to Leave Encashment Plan is accrued based on actuarial valuation at the Balance Sheet date.

Note 1.7 BORROWING COSTS

Borrowing costs attributable to the acquisition / construction of qualifying fixed assets are capitalized for the eligible period. Other borrowing costs are expensed in the period they occur.

Note 1.8 FOREIGN CURRENCY TRANSACTIONS

Foreign currency transactions are recorded at the exchange rates prevailing on the dates when the relevant transactions took place. Exchange difference arising settled foreign currency transactions during the year and translation of assets and liabilities at the yearend are recognized in the statement of profit and loss.

Difference between the forward exchange contract rate and the exchange rate as at the date of transaction is recognized as income or expense over the life of the said contract.

Note 1.9 LEASES

Assets acquired by way of finance lease are capitalized at the lower of the fair value and the present value of the minimum lease payments at the inception of the lease term and disclosed as leased assets. Lease payments are apportioned between finance charge and reduction of the lease liability based on the implicit rate of return. Finance charges are recognized as finance costs in the Statement of Profit and Loss. Lease rentals paid in respect of operating leases are recognized as an expense in the statement of Profit and Loss.

Note 1.10 TAXATION

1.10.1 Income Tax

The provision for taxation is based on assessable profits of the company as determined under the Income Tax Act, 1961.

1.10.2 Deferred Tax

The company is providing and recognizing deferred tax on timing differences between taxable income and accounting income subject to consideration of prudence.


Mar 31, 2013

1.1 BASIS OF ACCOUNTING

The fi nancial statements of Pitti Laminations Limited (PLL or Company) have been prepared and presented in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the basis of a going concern with revenues recognised and expenses accounted on their accrual.

1.2 FIXED ASSETS

Fixed Assets are stated at cost. Expenditure which is of capital nature is capitalised. Such expenditure

1.4 INVENTORIES:

Inventories are valued as under:

comprises of purchase price, import duties, levies and any directly attributable cost of bringing the assets to their working condition for intended use. Depreciation is provided (except in the case of leasehold property which is being amortised over the period of lease) on the Straight Line Method (SLM) and at the rates and in the manner specifi ed in Schedule XIV to the Companies Act, 1956.

1.3 INVESTMENTS

Long term investments are stated at cost, and provision is made when there is a decline, other than temporary in the carrying value of such investments.

1.5 RETIREMENT BENEFITS

1.5.1 Defi ned Contribution Plan:

Contribution as per Employee''s Provident Funds and Miscellaneous Provisions Act, 1962 towards Provident Fund and Family Pension Fund are provided for and payments in respect thereof are made to the relevant authorities on actual basis.

1.5.2 Defi ned Benefi t Plan:

Gratuity: In accordance with applicable Indian Laws, the Company provides gratuity, a defi ned benefi t retirement plan (the Gratuity Plan) covering all employees. The gratuity plan provides a lump sum payment to vested employees, at retirement or termination of employment, an amount based on the respective employee''s last drawn salary and the years of employment with the Company. Liability with regard to Gratuity Plan is accrued based on actuarial valuation at the Balance Sheet date.

1.5.3 Defi ned Benefi t Plan:

Leave Encashment: In accordance with applicable Indian Laws, the Company provides Encashment of Leave, a defi ned benefi t plan (Leave Encashment Plan) covering all employees. Liability with regard to Leave Encashment Plan is accrued based on actuarial valuation at the Balance Sheet date.

1.6 BORROWING COSTS

Borrowing costs attributable to the acquisition / construction of qualifying fi xed assets are capitalised for the eligible period. Other borrowing costs are expensed in the period they occur.

1.7 FOREIGN CURRENCY TRANSACTIONS

Revenue transactions in foreign currency are recorded at the exchange rates prevailing on the dates when the relevant transactions took place. The Company recognises gains / losses on foreign exchange rate fl uctuations relating to current assets and current liabilities at the year end.

Difference between the forward exchange contract rate and the exchange rate as at the date of transaction is recognised as income or expense over the life of the said contract.

1.8 LEASES

Assets acquired by way of fi nance lease are capitalised at the lower of the fair value and the present value of the minimum lease payments at the inception of the lease term and disclosed as leased assets. Lease payments are apportioned between

fi nance charge and reduction of the lease liability based on the implicit rate of return. Finance charges are recognised as fi nance costs in the Statement of Profi t and Loss. Lease rentals paid in respect of operating leases are recognised as an expense in the statement of Profi t and Loss.

1.9 TAXATION

1.9.1 Income Tax

The provision for taxation is based on assessable profi ts of the Company as determined under the Income Tax Act, 1961.

1.9.2 Deferred Tax

The Company is providing and recognising deferred tax on timing differences between taxable income and accounting income subject to consideration of prudence.


Mar 31, 2012

Note 1.1 BASIS OF ACCOUNTING

The financial statements of Pitti Laminations Limited (PLL or Company) have been prepared and presented in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the basis of a going concern with revenues recognized and expenses accounted on their accrual.

Note 1.2 FIXED ASSETS

Fixed Assets are stated at cost. Expenditure which is of capital nature is capitalized. Such expenditure comprises of purchase price, import duties, levies and any directly attributable cost of bringing the assets to their working condition for intended use. Depreciation is provided (except in the case of leasehold property which is being amortized over the period of lease) on the Straight Line Method (SLM) and at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956.

Note 1.3 INVESTMENTS

Long term investments are stated at cost, and provision is made when there is a decline, other than temporary in the carrying value of such investments.

Note 1.4 RETIREMENT BENEFITS

Note 1.4.1 DEFINED CONTRIBUTION PLAN

Contribution as per Employee's Provident Funds and Miscellaneous Provisions Act, 1962 towards Provident Fund and Family Pension Fund are provided for and payments in respect thereof are made to the relevant authorities on actual basis.

Note 1.4.2 DEFINED BENEFIT PLAN

Gratuity: In accordance with applicable Indian Laws, the company provides gratuity, a defined benefit retirement plan (the Gratuity Plan) covering all employees. The gratuity plan provides a lump sum payment to vested employees, at retirement or termination of employment, an amount based on the respective employee's last drawn salary and the years of employment with the company. Liability with regard to Gratuity Plan is accrued based on actuarial valuation at the Balance Sheet date.

Note 1.4.3 DEFINED BENEFIT PLAN

Leave Encashment: In accordance with applicable Indian Laws, the company provides Encashment of Leave, a defined benefit plan (Leave Encashment Plan) covering all employees. Liability with regard to Leave Encashment Plan is accrued based on actuarial valuation at the Balance Sheet date.

Note 1.6 BORROWING COSTS

Borrowing costs attributable to the acquisition / construction of qualifying fixed assets are capitalized for the eligible period. Other borrowing costs are expensed in the period they occur.

Note 1.7 FOREIGN CURRENCY TRANSACTIONS

Revenue transactions in foreign currency are recorded at the exchange rates prevailing on the dates when the relevant transactions took place. The company recognizes gains / losses on foreign exchange rate fluctuations relating to current assets and current liabilities at the year end.

Difference between the forward exchange contract rate and the exchange rate as at the date of transaction is recognized as income or expense over the life of the said contract.

Note 1.8 LEASES

Assets acquired by way of finance lease are capitalized at the lower of the fair value and the present value of the minimum lease payments at the inception of the lease term and disclosed as leased assets. Lease payments are apportioned between finance charge and reduction of the lease liability based on the implicit rate of return. Finance charges are recognized as finance costs in the Statement of Profit and Loss. Lease rentals paid in respect of operating leases are recognized as an expense in the statement of Profit and Loss.

Note 1.9 TAXATION Note |1.9.1| INCOME TAX

The provision for taxation is based on assessable profits of the company as determined under the Income Tax Act, 1961.

Note 1.9.2 DEFERRED TAX

The company is providing and recognizing deferred tax on timing differences between taxable income and accounting income subject to consideration of prudence.

The company had allotted 40,50,000 equity shares of Rs.10/- each at a price of Rs. 39.15 per share (including premium of Rs.29.15 per share) to the promoters and promoters group.

The issue price is determined in accordance with the guidelines stipulated under SEBI (Issue of Capital and Disclosure Requirements) Regulations 2009.

The shares allotted shall rank pari-passu in all respects with the existing equity shares of the company including entitlement to dividend and voting.

Notes:

a. Term loans from scheduled banks viz State Bank of India, Oriental Bank of commerce and Allahabad Bank are secured by equitable mortgage of movable and immovable properties and first charge on the present and future fixed assets of the company situated at Plant I and Plant II Nadigaon, Mahaboobnagar district. A. P. Further these are secured by a second charge on the present and future current assets of the company and collateral security provided by the Chairman and Managing Director/relative of Chairman and Managing Director. (Refer Note 2.7 (a) for terms of repayment)

b. The above loan is secured by exclusive charge on the machinery purchased to the extent funded and Personal guarantee provided by the Chairman and Managing Director & Vice Chairman and Managing Director. (Refer Note 2.7 (a) for terms of repayment)

c. Secured against lien on FDR from Agroha Co-operative Urban Bank. (Repayable in September'2013)

d. Secured against hypothecation of vehicles. (Refer Note 2.7 (b) for terms of repayment)

e. Unsecured Loans from Shri G.Vijaya Kumar (Director) (Repayable in June'2013)

f. Represents 14 years interest free sales tax deferment loan received from Government of Andhra Pradesh. Repayment commences from January ,2018 based on the deferment availed in the respective years.

g. Inter Corporate Deposit received from M/s. Sri Venkateswara Coir Products Private Limited. (Repayable in June'2013)

Note:

Working capital facilities from State Bank of India, Indian Overseas Bank, Allahabad Bank, Indusind Bank and Kotak Mahindra Bank are secured on a pari passu first charge basis against hypothecation of stocks, Tools & Dies, Spares & consumables, Book debts and all other current assets both present and future. Further these are secured by second charge on fixed assets of the company both present and future, apart from the personal guarantees of the Chairman and Managing Director, Vice Chairman and Managing Director and one of the relatives of the promoter.

Note:

Out of the said amount Rs.186.69 lacs (March 31 2011 Rs.386.97 lacs) pertain to Micro, Small and Medium Enterprises as defined under Micro, Small and Medium Enterprises Development Act, 2006. The information has been given in respect of such vendors to the extent they could be identified as Micro and Small enterprises on the basis of information available with the company on records.

Note:

a) Terms of repayment are given below:

i) Loan taken from SBI IFB is repayable in quarterly instalments of Rs.99.65 lacs each till March'2013

ii) Loan taken from Allahabad Bank is repayable in quarterly instalments of Rs.85.63 lacs each till March'2013

iii) Loan taken from Oriental Bank of Commerce is repayable in quarterly instalments of Rs.68.75 lacs each till January'2016.

iv) Loan taken from TATA Capital Ltd., is repayable in quarterly instalments of Rs.20.00 lacs each till May'2013

v) Loan taken from L & T Finance Ltd., is repayable in monthly instalments of Rs.7.46 lacs each till June'2016

b) Terms of repayment are given below:

i) Loan taken from ICICI Bank is repayable in monthly instalments of Rs.0.99 lacs each inclusive of interest till June'2013

ii) Loan taken from Kotak Bank is repayable in monthly instalments of Rs.0.40 lacs each inclusive of interest till May'2013

iii) Loan taken from Axis Bank is repayable in monthly instalments of Rs.0.36 lacs each inclusive of interest till November'2014

iv) Loan taken from Tata Capital is repayable in monthly instalments of Rs.2.81 lacs each inclusive of interest till January'2014


Mar 31, 2011

01.1 BASIS OF ACCOUNTING

The financial statements are prepared under the historical cost convention on the basis of a going concern with revenues recognized and expenses accounted on their accrual.

01.2 FIXED ASSETS

Fixed Assets are stated at cost. Expenditure which is of capital nature is capitalized. Such expenditure comprises of purchase price, import duties, levies and any directly attributable cost of bringing the assets to their working condition for intended use. Depreciation is provided ( except in the case of leasehold land which is being amortized over the period of lease) on the Straight Line Method (SLM) and at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956.

01.3 INVESTMENTS

Long term investments are stated at cost, and provision is made when there is a decline, other than temporary in the carrying value of such investments.

01.4 BORROWING COSTS

Borrowing costs attributable to the acquisition / construction of qualifying fixed assets are capitalized for the eligible period. Other borrowing costs are charged to Profit and Loss account.

01.5 INVENTORIES: Inventories are valued as under:

Sl. Particulars Basis of Valuation No. 1 Raw Material Weighted average cost or net realizable value which ever is lower

2 Work In Process Weighted average cost or net realizable value which ever is lower

3 Finished Goods Weighted average cost or net realizable value which ever is lower

4 Stores & Spares Weighted average cost or net realizable value which ever is lower

5 Scrap At Realizable value

6 Press Tools & Tools & Dies manufactured in the Company's in-house Tool Room are valued at cost on a consistent basis. Consumption of Tools is calculated on the actual wear and tear of these Tools & Dies. Obsolete tools and tools which have become more than three years old are written off net of salvage value.



01.6 RETIREMENT BENEFITS

01.6.1 Defined Contribution Plan:

Contribution as per Employee’s Provident Funds and Miscellaneous Provisions Act, 1962 towards Provident Fund and Family Pension Fund are provided for and payments in respect thereof are made to the relevant authorities on actual basis.

01.6.2 Defined Benefit Plan:

Gratuity: In accordance with applicable Indian Laws, the company provides gratuity, a defined benefit retirement plan (Gratuity Plan) covering all employees. The gratuity plan provides a lump sum payment to vested employees, at retirement or termination of employment, an amount based on the respective employee’s last drawn salary and the years of employment with the company. Liability with regard to Gratuity Plan is accrued based on actuarial valuation at the balance sheet date.

01.6.3 Defined Benefit Plan:

Leave Encashment: In accordance with applicable Indian Laws, the company provides Encashment of Leave, a defined benefit plan (Leave Encashment Plan) covering all employees. Liability with regard to Leave Encashment Plan is accrued based on actuarial valuation at the balance sheet date..

01.7 FOREIGN CURRENCY TRANSACTIONS

Revenue transactions in foreign currency are recorded at the exchange rates prevailing on the dates when the relevant transactions took place. The company recognizes gains / losses on foreign exchange rate fluctuations relating to current assets and current liabilities at the year end.

Difference between the forward exchange contract rate and the exchange rate as at the date of transaction is recognized as income or expense over the life of the said contract.

01.8 Leases

Assets acquired by way of fi nance lease are capitalized at the lower of the fair value and the present value of the minimum lease payments at the inception of the lease term and disclosed as leased assets. Lease payments are apportioned betweenfi nance charge and reduction of the lease liability based on the implicit rate of return. Finance charges are charged in the Profit and Loss Account. Lease rentals paid in respect of operating leases are charged to Profit and Loss Account.

01.9 TAXATION

Current year Charge

01.9.1) Income Tax

The provision for taxation is based on assessable profits of the company as determined under the Income Tax Act, 1961.

01.9.2) Wealth Tax

Wealth Tax is provided under the Wealth Tax Act, 1957.

01.9.3) Deferred Tax

The company is providing and recognizing deferred tax on timing differences between taxable income and accounting income subject to consideration of prudence.


Mar 31, 2010

01.1 BASIS OF ACCOUNTING

The financial statements are prepared under the historical cost convention on the basis of a going concern with revenues recognized and expenses accounted on their accrual.

01.2 FIXED ASSETS

Fixed Assets are stated at cost. Expenditure which is of capital nature is capitalized. Such expenditure comprises of purchase price, import duties, levies and any directly attributable cost of bringing the assets to their working condition for intended use. Depreciation is provided (except in the case of leasehold land which is being amortized over the period of lease) on the Straight Line Method (SLM) and at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956.

01.3 INVESTMENTS

Long term investments are stated at cost, and provision is made when there is a decline, other than temporary in the carrying value of such investments.

01.4 BORROWING COSTS

Borrowing costs attributable to the acquisition/construction of qualifying fixed assets are capitalized for the eligible period. Other borrowing costs are charged to Profit and Loss account.

01.5 INVENTORIES: Inventories are valued as under: Particulars Basis of Valuation

Raw Material Weighted average cost or net realizable value which ever is lower

Work In Process Weighted average cost or net realizable value which ever is lower

Finished Goods Weighted average cost or net realizable value which ever is lower

Stores & Spares Weighted average cost or net realizable value which ever is lower

Scrap At Realizable value

Press Tools & Dies Tools & Dies manufactured in the Companys in-house Tool Room are valued at cost on a consistent basis. Consumption of Tools is calculated on the actual wear and tear of these Tools & Dies.Obsolete tools and tools which have become more than three years oldare written off net of salvage value.

01.6 RETIREMENT BENEFITS

01.6.1 Defined Contribution Plan:

Contribution as per Employees Provident Funds and Miscellaneous Provisions Act, 1962 towards Provident Fund and Family Pension Fund are provided for and payments in respect thereof are made to the relevant authorities on actual basis.

01.6.2 Defined Benefit Plan:

Gratuity: In accordance with applicable Indian Laws, the company provides gratuity, a defined benefit retirement plan (Gratuity Plan) covering all employees. The gratuity plan provides a lump sum payment to vested employees, at retirement or termination of employment, an amount based on the respective employees last drawn salary and the years of employment with the company. Liability with regard to Gratuity Plan is accrued based on actuarial valuation at the balance sheet date.

01.6.3 Defined Benefit Plan:

Leave Encashment: In accordance with applicable Indian Laws, the company provides Encashment of Leave, a defined benefit plan (Leave Encashment Plan) covering all employees. Liability with regard to Leave Encashment Plan is accrued based on actuarial valuation at the balance sheet date..

01.7 FOREIGN CURRENCY TRANSACTIONS

Revenue transactions in foreign currency are recorded at the exchange rates prevailing on the dates when the relevant transactions took place. The company recognizes gains / losses on foreign exchange rate fluctuations relating to current assets and current liabilities at the year end.

Difference between the forward exchange contract rate and the exchange rate as at the date of transaction is recognized as income or expense over the life of the said contract.

01.8 Leases

Assets acquired by way of finance lease are capitalized at the lower of the fair value and the present value of the minimum lease payments at the inception of the lease term and disclosed as leased assets. Lease payments are apportioned between finance charge and reduction of the lease liability based on the implicit rate of return. Finance charges are charged in the Profit and Loss Account. Lease rentals paid in respect of operating leases are charged to Profit and Loss Account.

01.9 TAXATION

Current year Charge

01.9.1) Income Tax

The provision for taxation is based on assessable profits of the company as determined under the Income Tax Act, 1961.

01.9.2) Wealth Tax

Wealth Tax is provided under the Wealth Tax Rules, 1957.

01.9.3) Deferred Tax

The company is providing and recognizing deferred tax on timing differences between taxable income and accounting income subject to consideration of prudence.