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Accounting Policies of PPAP Automotive Ltd. Company

Mar 31, 2015

I. Basis of preparation of financial statements:

These financial statements have been prepared to comply with Accounting Principles Generally accepted in India (Indian GAAP), the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2014 and the relevant provisions of the Companies Act, 2013. The financial statements are prepared on accrual basis under the historical cost convention.

All assets and liabilities have been classified as current or non-current as per the Company's normal operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013. Based on the nature of products and the time between the acquisition of assets for processing and their realisation 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.

II. Use of estimates:

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

III. Fixed Assets & Depreciation:

a) Fixed assets are stated at historical cost. Cost includes freight, installation cost, duties, taxes and incidental expenses but net of recoverable taxes.

b) Depreciation / amortization on tangible and intangible fixed assets are provided to the extent of depreciable amount on the Straight Line Method (SLM). Depreciation is provided at the rates and in the manner prescribed in Schedule II to the Companies Act, 2013 except on some assets, where useful life has been taken based on internal technical evaluation.

c) Intangible Assets are stated at cost of acquisition net of recoverable taxes less accumulated amortization / depletion and impairment loss, if any.

d) Technical knowhow is being amortised on pro-rata basis over a period six years.

e) Leasehold land is amortised over the period of lease.

IV. Investment

Long Term Investments are carried at cost. Provision for diminution in the value of long term investment is made only if such a decline is other than temporary.

Current investments are carried at lower of cost and fair value.

V. Inventories

i) Finished Goods have been valued at cost or net realizable value, whichever is lower.

ii) Raw Materials, Stores & Spares have been valued at cost on FIFO basis, which includes purchase price, freight, duty, taxes & other incidental expenses but net of recoverable taxes.

iii) Work-in-process is carried at cost or net realizable value whichever is lower.

VI. Revenue Recognition

i) Sales are recognised upon delivery of products and are recorded inclusive of excise duty but net of rebates, discounts and sales tax.

ii) Job work receipts are recorded net of service tax.

VII. Excise Duty / Service Tax and Sales Tax / Value Added Tax

Excise Duty / Service Tax is accounted on the basis of both, payments made in respect of goods cleared / service provided as also provision made for goods lying in bonded warehouses. Sales Tax / Value Added tax paid is charged to Profit and Loss Account.

VIII. Provision for Current and Deferred Tax

Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income Tax Act, 1961.

Deferred tax resulting from "timing difference" between taxable and accounting income is accounted for using

the tax rates and laws that are enacted or substantively enacted as on the Balance Sheet date. Deferred tax asset is recognised and carried forward only to the extent that there is a virtual certainty that the asset will be realised in future.

IX. Foreign Currency Transactions

i) Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction or the rate which approximates the actual rate at the date of the transaction.

ii) Monetary items denominated in foreign currencies at the year end are restated at year end rates. In case of items which are covered by forward contracts, the difference between the year end rate and rate on the date of the contract is recognised as exchange difference and the premium paid on forward contracts is recognised over the life of the contract.

iii) Any income or expense on account of exchange difference either on settlement or on translation is recognized in the profit and loss account.

X. Impairment of Assets

At each balance sheet date, the Company assesses whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount. If the carrying amount of the asset exceeds its recoverable amount, an impairment loss is recognized in the profit and loss account to the extent the carrying amount exceeds recoverable amount.

XI. Employee Benefits

i) Short-term employee benefits are recognised as an expense at the undiscounted amount in the profit and loss account of the year in which the related service is rendered.

ii) Long-term employee benefits: Liability towards Gratuity and unavailed leaves has been provided on the basis of actuarial valuation.

XII. Leases

Assets leased by the Company in the capacity of the lessee, where the Company has substantially all the risks and rewards of ownership are classified as finance lease. Such leases are capitalized at the inception of the lease at lower of the fair value or the present value of the minimum lease payments and a liability is created for an equivalent amounts. Each lease rental paid is allocated between the liability and the interest cost so as to obtain a constant periodic rate of interest on the outstanding liability for each year.

Lease arrangement where the risks and rewards incidental to ownership of an asset substantially vest with the lessor, are recognised as operating lease. Lease rentals under operating lease are recognized in profit & loss account in straight line basis.

XIII. Borrowing Cost

Borrowing costs attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets until such time the assets are substantially ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization.

XIV. Provisions, Contingent Liabilities & Contingent Assets

A provision is recognized when the Company has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which reliable estimate can be made. Provisions [excluding retirement benefit] are not discounted to its present value and are determined based on best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. Contingent liabilities are not recognized in the financial statements. A contingent asset is neither recognized nor disclosed in the financial statements.

XV. Measurement of EBITDA

The Company has elected to present earnings before interest, tax, depreciation and amortization (EBITDA) as a separate line item on the face of the statement of profit and loss. In its measurement, the Company does not include depreciation and amortization expense, finance costs and tax expense.

XVI. Unless specifically stated to be otherwise, these policies are consistently followed.


Mar 31, 2014

BASIS OF PREPARATION:

These financial statements have been prepared in accordance with the generally accepted accounting principles in India under the historical cost convention on accrual basis. These financial statements have been prepared to comply in all material aspects with the accounting standards notified under Section 211(3C) [(Companies (Accounting Standards) Rule ,2006 ,as amended ] and the other relevant provisions of the Companies Act,1956.

All assets and liabilities have been classified as current or non-current as per the company''s normal operating cycle and other criteria set out in the Revised Schedule VI to the Companies Act, 1956. Based on the nature of products and the time between the acquisition of assets for processing and their realisation 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.

1. USE OF ESTIMATES

The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognised in the period in which the results are known/ materialised.

2. FIXED ASSETS & DEPRECIATION

i) Fixed assets are stated at historical cost. Cost includes freight, installation cost, duties, taxes and incidental expenses but net of recoverable taxes.

ii) Depreciation is charged on Straight Line Method at the rates prescribed Under Schedule XIV of the Companies Act, 1956.

iii) Technical knowhow is being amortised on pro-rata basis over a period six years.

iv) Leasehold land is amortised over the period of lease.

3. INVESTMENT

Long Term Investments are carried at Cost. Provision for diminution in the value of long term investment is made only if such a decline is other than temporary.

Current investments are carried at lower of cost and fair value.

4. INVENTORIES

i) Finished Goods have been valued at cost or net realizable value whichever is lower. Cost is arrived at on direct costing method.

ii) Raw Materials, Stores & Spares have been valued at Cost on FIFO basis, which include purchase price, freight, duty, taxes & other incidental expenses but net of recoverable taxes.

iii) Work-in-process is carried at cost or net realizable value whichever is lower.

5. REVENUE RECOGNITION

i) Sales are recognised upon delivery of products and are recorded inclusive of excise duty but net of rebates, discounts and sales tax.

ii) Job work receipts are recorded net of Service Tax.

6. EXCISE DUTY / SERVICE TAX AND SALES TAX / VALUE ADDED TAX

Excise Duty / Service Tax is accounted on the basis of both, payments made in respect of goods cleared / service provided as also provision made for goods lying in bonded warehouses. Sales Tax / Value Added tax paid is charged to Profit and Loss Account.

7. PROVISION FOR CURRENT AND DEFERRED TAX

Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income- tax Act, 1961. Deferred tax resulting from "timing difference" between taxable and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date. Deferred tax asset is recognised and carried forward only to the extent that there is a virtual certainty that the asset will be realised in future.

8. FOREIGN CURRENCY TRANSACTIONS

i) Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction or that approximates the actual rate at the date of the transaction.

ii) Monetary items denominated in foreign currencies at the year-end are restated at year end rates. In case of items which are covered by forward exchange contracts, the difference between the year-end rate and rate on the date of the contract is recognised as exchange difference and the premium paid on forward contracts is recognised over the life of the contract.

9. IMPAIREMENT OF ASSETS

At each balance sheet date, the Company assesses whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount. If the carrying amount of the asset exceeds its recoverable amount, an impairment loss is recognized in the profit and loss account to the extent the carrying amount exceeds recoverable amount.

10. EMPLOYEE BENEFITS

(i) Short-term employee benefits are recognised as an expense at the undiscounted amount in the profit and loss account of the year in which the related service is rendered.

(ii) Post employment and other long term employee benefits are recognised as an expense in the Profit and Loss account for the year in which the employee has rendered services. The expense is recognised at the present value of the amounts payable determined using actuarial valuation techniques. Actuarial gains and losses in respect of post-employment and other long term benefits are charged to the Profit and Loss account.

11. LEASES

Assets leased by the company in the capacity of the lessee ,where the company has substantially all the risks and rewards of ownership are classified as finance lease. Such leases are capitalized at the inception of the lease at lower of the fair value or the present value of the minimum lease payments and a liability is created for an equivalent amounts. Each lease rental paid is allocated between the liability and the interest cost so as to obtain a constant periodic rate of interest on the outstanding liability for each year.

Lease arrangement where the risks and rewards incidental to ownership of an asset substantially vest with the lessor, are recognised as operating lease. Lease rentals under operating lease are recognized in Profit & Loss Account in straight line basis.

12. BORROWING COST

Borrowing costs attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets until such time the assets are substantially ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for Capitalization.

13. PROVISIONS, CONTINGENT, LIABILITIES & CONTINGENT ASSETS

A provision is recognized when the company has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which reliable estimate can be made. Provisions [excluding retirement benefit] are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. Contingent liabilities are not recognized in the financial statements. A contingent assets is neither recognized nor disclosed in the financial statements.

14. Measurement of EBITDA

As permitted by the Guidance Note on the Revised Schedule VI to the Companies Act, 1956, the company has elected to present earnings before interest, tax, depreciation and amortization (EBITDA) as a separate line item on the face of the statement of profit and loss. In its measurement, the company does not include depreciation and amortization expense, finance costs and tax expense.


Mar 31, 2013

1. SYSTEM OF ACCOUNTING

i) The Company follows mercantile system of accounting and recognise income and expenditures on accrual basis, except stated below.

ii) The Financial Statements are prepared on historical Cost Convention, in accordance with the generally accepted accounting principles in India and the relevant provisions of the Companies Act, 1956.

iii) Estimates and Assumptions used in the preparation of the financial statements and disclosures are based upon management''s evaluation of the relevant facts and circumstances as of date of the financial statements, which may differ from the actual results at a subsequent date.

2. FIXED ASSESTS & DEPRECIATION

i) Fixed assets are stated at historical cost. Cost includes freight, installation cost, duties, taxes and incidental expenses but net of Excise Duty (CENVAT).

ii) Depreciation is charged on Straight Line Method at the rate prescribed Under Schedule XIV of the Companies Act, 1956.

iii) Technical knowhow is being amortised on pro-rata basis over period of six years.

iv) Leasehold land is amortised over the period of lease.

3. INVESTMENT

Long Term Investments are carried at Cost after providing for diminution in value, if any, if it is of a permanent nature.

Current investments in Mutual Fund Units are carried at Cost.

4. INVENTORIES

i) Finished Goods have been valued at cost or net realizable value whichever is lower and Cost is arrived at on direct costing method. That is the manufacturing cost i.e. the value of raw material consumed divided by the Quantity of Raw Material consumed plus manufacturing expenses divided by Quantity of Finished goods manufactured. Finished goods lying in the factory premises are valued inclusive of excise duty.

ii) Raw Materials, Stores & Spares have been valued at Cost on FIFO basis, which included purchase price, freight, duty, taxes & other incidental expenses but net of excise duty (CENVAT).

iii) Wastage has been valued at net realizable value.

5. REVENUE RECOGNITION

i) Sales in the domestic market are recognised at the time of dispatch of goods to the buyers and are recorded net of sales return, rebates, trade discounts, sales tax and excise duty.

ii) Export sales are recognised on issue of bill of lading and recorded at the relevant exchange rates prevailing on the date of the transaction.

iii) Job work receipts are recorded net of Service Tax.

6. EXCISE DUTY / SERVICE TAX AND SALES TAX / VALUE ADDED TAX

Excise Duty / Service Tax is accounted on the basis of both, payments made in respect of goods cleared / service provided as also provision made for goods lying in bonded warehouses. Sales Tax / Value Added tax paid is charged to Profit and Loss Account.

7. TAXES ON INCOME

i) Tax on income for the current year is determined on the basis of Income Tax Act, 1961.

ii) Deferred tax is recognized, subject to the consideration of prudence in respect of deferred tax assets and expenses, on timing difference, being the difference between taxable incomes and accounting income that originate in one period and capable of reversal in one or more subsequent periods.

8. FOREIGN CURRENCY TRANSACTIONS

i) Foreign Currency transactions are re-stated at the rates prevailing at the time of receipt/payment thereof and all exchange losses/ gain arising therefrom are adjusted to the respective accounts. However, Foreign Currency transactions, payments for which were not received / made till the balance sheet date, are recorded in the books at the rate of exchange prevailing on the date of such transactions and any exchange difference is being recorded as profit or loss from change in Foreign Exchange Rates in profit & loss account.

ii) Monetary assets and liabilities related to foreign currency transactions remaining unsettled are translated at the year end rates and the exchange differences are recorded as unrealized foreign exchange gain/loss in profit & loss account.

9. IMPAIREMENT OF ASSETS

At each balance sheet date, the Company assesses whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount. If the carrying amount of the asset exceeds its recoverable amount, an impairment loss is recognized in the profit and loss account to the extent the carrying amount exceeds recoverable amount.

10. RETIREMENT BENEFIT COSTS

Gratuity Liability and provision for Leave Encashment benefits are accounted for as per Accounting Standard 15 (Re- vised).The expenses are recognised at the actuarially determined value by an actuary.

11. ADJUSTMENT PERTAINING TO EARLIER YEARS

Income / Expenditure relating to prior period, which are not material in each case, are treated as income / expenditure of current year.

12. Debit / Credit balances of various parties are subject to confirmation / reconciliation.

13. LEASES

Assets leased by the company in the capacity of the lessee ,where the company has substantially all the risks and rewards of ownership are classified as finance lease. Such leases are capitalized at the inception of the lease at lower of the fair value or the present value of the minimum lease payments and a liability is created for an equivalent amount. Each lease rental paid is allocated between the liability and the interest cost so as to obtain a constant periodic rate of interest on the outstanding liability for each year.

Lease arrangement where the risks and rewards incidental to ownership of an asset substantially vest with the lessor, are rec- ognised as operating lease. Lease rentals under operating lease are recognized in Profit & Loss Account on straight line basis.

14. BORROWING COST

Borrowing Costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets until such time the assets are substantially ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrow- ing costs eligible for Capitalization.

15. PROVISIONS, CONTINGENT LIABILITIES & CONTINGENT ASSETS

A provision is recognized when the company has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which reliable estimate can be made. Provisions [excluding retirement benefit are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. Contingent liabilities are not recognized in the financial statements. A contingent asset is neither recognized nor disclosed in the financial statements.


Mar 31, 2012

1. BASIS OF ACCOUNTING

I) The Company follows mercantile system of accounting and recognizes Income and expenditures on accrual basis, except stated below. The accounts are prepared on historical Cost convention, In accordance with the generally accepted accounting principles, accounting standards Issued by the Institute of Chartered Accountants of India, as applicable, and the relevant provisions of The CompaniesAct, 1956.

II) Insurance, Sales Tax, Export Incentives and other claims are accounted for as and when received.

2. FIXED ASSETS & DEPRECIATION

I) Fixed assists are stated at historical cost. Cost Includes freight, Installation cost, duties, taxes and Incidental expense but net of Excise Duty (CENVAT).

il) Depreciation Is charged on Straight Line Method at the rate prescribed Under Schedule XIV ofthe CompaniesAct, 1956.

ili) Technical know how is being amortised on pro-rata basis over period of Six years.

3. INVESTMENTS

Long Term investments are carried at Cost after providing for diminution in value, if any, If It is of a permanent nature. Current Investments in Mutual Fund Units are carried at Cost.

4. INVENTORIES

I) Finished Goods have been valued at cost or net realizable value whichever Is lower and Cost Is arrived at on direct costing method. That Is, the manufacturing Cost, I.e., the value of raw Material consumed divided by the Quantity of Raw Material consumed plus manufacturing expenses divided by Quantity of Finished goods manufactured.

il) Raw Materials, Stores & Spares have been valued at Cost on FIFO basis, which includes purchase price, freights, duty, taxes & other Incidental expenses but net of excise duty (CENVAT)

iii) Wastage has been valued at net realizable value.

5. REVENUE RECOGNITION

i) Sales in the domestic market are recognised at the time of dispatch of goods to the buyers and are recorded net of sales return, rebates, trade discounts, sales tax and excise duty.

ii) Export sales are recognised on issue of bill of lading.

iii) Job work receipts are recorded net of Service tax.

6. Excise DUTY/Service Tax and Sales Tax/Value Added Tax

Excise Duty/Service Tax is accounted on the basis of both, payments mode in respect of goods Cleared/services provided as also provision made for goods lying in bonded warehouses. Sales Tax/Value added tax paid is charged to Profit and Loss account.

7. TAXES ON INCOME

i) Tax on income forthe currentyear is determined on the basis ofthe Income TaxAct, 1961.

ii) Deferred tax is recognized, subject to the consideration of prudence in respect of deferred tax assets and expenses, on timing difference, being the difference between taxable incomes and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

8. FOREIGN CURRENCYTRANSACTIONS

I) Foreign Currency transactions are re-stated at the rates prevailing at the time of receipt/payment thereof and all exchanges losses /gain arising there from are adjusted to the respective accounts. However Foreign Currency transactions, payment for which were not received/made till the balance sheet date, are recorded in the books at the rate of exchanges prevailing on the date of such transactions and any exchange difference is being recorded as profit or loss from change in Foreign Exchange Rates in profit loss account.

ii) Monetary assets and liabilities related to foreign currency transactions remaining unsettled are translated at year end rates and the exchange differences are recorded as unrealized foreign exchange gain/loss in profit & loss account.

9. IMPAIRMENT OF ASSETS

At each balance sheet date, the Company assesses whether there is any indication that an asset may be impaired. It any such indication exists, the Company estimates the recoverable amount. If the carrying amount of the asset exceeds its recoverable amount, an impairment loss is recognized in the profit and loss account to the extent the carrying amount exceeds recoverable amount.

10. RETIREMENT BENEFIT COSTS

Gratuity Liability is accounted for as per Accounting Standard -15 (R). Provision for Leave Encashment benefit has been made in accordance with the Accounting Standard -15 (R) Employee Benefit.

11. DEFERRED REVENUE EXPENDITURE

I) Pre-Operative expenses are being written offovera period of Sixyears.

ii) Shares issue expenses are being written off equally over a period of Five years.

12. ADJUSTMENTS PERTAINING TO EARLIER YEARS

Income/Expenditure relating to prior period, which are not material in each case, are treated as income/expenditure of current year.

13. Debit/Credit balances of various parties are subject to confirmation/ reconciliation.

14. Leases

Assets leased by the company in the capacity of the lessee, where the company has substantially all the risks and rewards of ownership are classified as finance lease. Such leases are capitalized at the inception of the lease at lower of the fair value or the present value of the minimum lease payments and a liability is created for an equivalent amount. Each lease rental paid is allocated between the liability and the interest cost so as to obtain a constant periodic rate of interest on the outstanding liability for each year.

Lease arrangements where the risks and rewards incidental to ownership of an asset substantially vest with the lessor, are recognized as operating lease. Lease rentals under operating lease are recognized in Profit & Loss Account on a straight line basis.

15. Borrowing Cost

Borrowing Costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets. Until such time as the assets are substantially ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for Capitalization.

16. Provisions, Contingent, Liabilities & Contingent Assets

A provision is recognized when the company has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which reliable estimate can be made. Provisions [excluding retirement benefit) are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjust to reflect the current best estimates. Contingent liabilities are not recognized in the financial statements. A contingent asset is neither recognized nor disclosed in the financial statements.

The policies not specifically mentioned above are in agreement with the Accounting Standards issued by the Institute of Chartered Accountants of India.


Mar 31, 2011

1. BASIS OF ACCOUNTING

i) The Company follows mercantile system of accounting and recognizes income and expenditures on accrual basis, except stated below. The accounts are prepared on historical cost convention, In accordance with the generally accepted accounting principles, accounting standards issued by the Institute of Chartered Accountants of India, as applicable, and the relevant provisions of the Companies Act, 1956.

ii) Insurance, Sales Tax, Export Incentives and other Claims are accounted for as and when received

2. FIXED ASSETS & DEPRECIATION

i) Fixed Assets are stated at historical cost. Cost includes freight, installation cost, duties, taxes, and incidental expenses but net of Excise duty (CENVAT).

ii) Depreciation is charged on Straight Line Method at the rate prescribed under Schedule XIV of the Companies Act, 1956.

iii) Technical know how is being amortised on pro-rata basis over a period of Six years.

3. INVESTMENTS

Long Term investments are carried at cost after providing for diminution in value, if any, if it is of a permanent nature. Current investments in Mutual Fund Units are carried at cost.

4. INVENTORIES

i) Finished Goods have been valued at cost or net realizable value whichever is lower and cost is arrived at on direct costing method. That is, the manufacturing cost, i.e., the value of Raw Material consumed, divided by the Quantity of Raw Material consumed Plus manufacturing expenses divided by the Quantity of Finished goods manufactured.

ii) Raw Materials, Stores & Spares have been valued at cost on FIFO basis, which includes purchase price, freights, duties, taxes & other incidental expenses but net of excise duty (CENVAT).

iii) Wastage has been valued at net realizable value.

5. REVENUE RECOGNITION

i) Sales in the domestic market are recognised at the time of dispatch of goods to the buyers and are recorded net of sales return, rebates, trade discounts, sales tax and excise duty.

ii) Export sales are recognised on issue of bill of lading.

iii) Job work receipts are recorded net of Service tax.

iv) Dividend is recognised as and when the right to receive such payment is established.

6. TAXES ON INCOME

i) Tax on income for the current year is determined on the basis of the Income Tax Act, 1961.

ii) Deferred tax is recognized, subject to the consideration of prudence in respect of deferred tax assets and expenses, on timing difference, being the difference between taxable incomes and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

7. FOREIGN CURRENCY TRANSACTIONS

i) Foreign Currency transactions are re-stated at the rates prevailing at the time of receipt/payment thereof and all exchanges losses /gain arising there from are adjusted to the respective accounts. However Foreign Currency transactions, payment for which were not received/made till the balance sheet date, are recorded in the books at the rate of exchanges prevailing on the date of such transactions and any exchange difference is being recoded as profit or loss from change in Foreign Exchange Rates in profit & loss account.

ii) Monetary assets and liabilities related to foreign currency transactions remaining unsettled are translated at year end rates and the exchange differences are recorded as unrealized foreign exchange gain/loss in profit & loss account.

8. IMPAIRMENT OF ASSETS

At each balance sheet date, the Company assesses whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount. If the carrying amount of the asset exceeds its recoverable amount, an impairment loss is recognized in the profit and loss account to the extent the carrying amount exceeds recoverable amount.

9. RETIREMENT BENEFIT COSTS

Gratuity liability is accounted for on accrual basis based on the actual liability calculated as per the Payment of Gratuity Act, 1972 as at the Balance Sheet date. Provision for Leave Encashment benefit has been made in accordance with the Accounting Standard - 15 "Employee Benefit".

10. DEFERRED REVENUE EXPENDITURE

i) Pre-Operative expenses are being written off over a period of Six years.

ii) Shares issue expenses are being written off equally over a period of Five Years.

11. ADJUSTMENTS PERTAINING TO EARLIER YEARS

Income/expenditure relating to prior period, which are not material in each case, are treated as income/expenditure of current year.

12. Debit/Credit balances of various parties are subject to confirmation/ reconciliation.

13. Leases.

Assets leased by the company in the capacity of the lessee, where the company has substantially all the risks and rewards of ownership are classified as finance lease. Such leases are capitalized at the inception of the lease at lower of the fair value or the present value of the minimum lease payments and a liability is created for an equivalent amount. Each lease rental paid is allocated between the liability and the interest cost so as to obtain a constant periodic rate of interest on the outstanding liability for each year.

Lease arrangements where the risks and rewards incidental to ownership of an asset substantially vest with the lessor, are recognized as operating lease. Lease rentals under operating leases are recognized in Profit & Loss Account on a straight line basis.

14. Borrowing Cost

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization.

15. Provisions, Contingent Liabilities and Contingent Assets.

A provision is recognized when the company has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which reliable estimate can be made. Provisions (excluding retirement benefit) are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjust to reflect the current best estimates. Contingent liabilities are not recognized in the financial statements. A contingent asset is neither recognized nor disclosed in the financial statements.

The policies not specifically mentioned above are in agreement with the Accounting Standards issued by the Institute of Chartered Accountants of India.










Mar 31, 2010

1. BASIS OF ACCOUNTING

i) The Company follows mercantile system of accounting and recognizes income and expenditures on accrual basis, except stated below. The accounts are prepared on historical cost convention, In accordance with the generally accepted accounting principles, accounting standards issued by the Institute of Chartered Accountants of India, as applicable, and the relevant provisions of the Companies Act, 1956.

iii) Insurance, Sales Tax, Export Incentives and other Claims are accounted for as and when received

2. FIXED ASSETS & DEPRECIATION

i) Fixed Assets are stated at historical cost. Cost includes freight, installation cost, duties, taxes, and incidental expenses but net of Excise duty (CENVAT).

ii) Depreciation is charged on Straight Line Method at the rate prescribed under Schedule XIV of the Companies Act, 1956.

iii) Technical know how is being amortised on pro-rata basis over a period of Six years.

3. INVESTMENTS

Long Term investments are carried at cost after providing for diminution in value, if any, if it is of a permanent nature. Current investments in Mutual Fund Units are carried at cost.

4. INVENTORIES

i) Finished Goods have been valued at cost or net realizable value whichever is lower and cost is arrived at on direct costing method. That is, the manufacturing cost, i.e., the value of Raw Material consumed, divided by the Quantity of Raw Material consumed Plus manufacturing expenses divided by the Quantity of Finished goods manufactured.

ii) Raw Materials, Stores & Spares have been valued at cost on FIFO basis, which includes purchase price, freights, duties, taxes & other incidental expenses but net of excise duty (CENVAT).

iii) Wastage has been valued at net realizable value.

5. REVENUE RECOGNITION

i) Sales in the domestic market are recognised at the time of dispatch of goods to the buyers and are recorded net of sales return, rebates, trade discounts, sales tax and excise duty.

ii) Export sales are recognised on issue of bill of lading.

iii) Job work receipts are recorded net of Service tax.

iv) Dividend is recognised as and when the right to receive such payment is established.

6. TAXES ON INCOME

i.) Tax on income for the current year is determined on the basis of the Income Tax Act, 1961.

iii) Deferred tax is recognized, subject to the consideration of prudence in respect of deferred tax assets and expenses, on timing difference, being the difference between taxable incomes and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

7. FOREIGN CURRENCYTRANSACTIONS

i) Foreign Currency transactions are re-stated at the rates prevailing at the time of receipt/payment thereof and all exchanges losses /gain arising there from are adjusted to the respective accounts. However Foreign Currency transactions, payment for which were not received/made till the balance sheet date, are recorded in the books at the rate of exchanges prevailing on the date of such transactions and any exchange difference is being recoded as profit or loss from change in Foreign Exchange Rates in profit & loss account.

ii) Monetary assets and liabilities related to foreign currency transactions remaining unsettled are translated at year end rates and the exchange differences are recorded as unrealized foreign exchange gain/loss in profit & loss account.

8. IMPAIRMENT OF ASSETS

At each balance sheet date, the Company assesses whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount. If the carrying amount of the asset exceeds its recoverable amount, an impairment loss is recognized in the profit and loss account to the extent the carrying amount exceeds recoverable amount.

9. RETIREMENT BENEFIT COSTS

Gratuity liability is accounted for on accrual basis based on the actual liability calculated as per the Payment of Gratuity Act, 1972 as at the Balance Sheet date. Provision for Leave Encashment benefit has been made in accordance with the Accounting Standard - 15 "Employee Benefit".

10. DEFERRED REVENUE EXPENDITURE

i) Pre-Operative expenses are being written off over a period of Six years.

ii) Shares issue expenses are being written off equally over a period of Five Years.

11. ADJUSTMENTS PERTAINING TO EARLIER YEARS

Income/expenditure relating to prior period, which are not material in each case, are treated as income/expenditure of current year.

12 Debit/Credit balances of various parties are subject to confirmation/ reconciliation.

13. CONTINGENT LIABILITIES

Contingent Liabilities as defined in Accounting Standard 29 on Provision, Contingent Liabilities and Contingent Assets are disclosed by way of notes to accounts. A provision is recognised when it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

The policies not specifically mentioned above are in agreement with the Accounting Standards issued by the Institute of Chartered Accountants of India.



 
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