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Accounting Policies of Pricol Ltd. Company

Mar 31, 2015

I. a) Basis of preparation :

The financial statements have been prepared to comply in all material respects with the accounting standards specified under Section 133 of Companies act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014. The financial statements have been prepared under the historical cost convention on an accrual basis. The accounting policies have been consistently applied by the Company and 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 amount of assets, liabilities, disclosures relating to contingent liabilities and assets as at the balance sheet date and the reported amounts of income and expenses during the year. Difference between the actual amounts and the estimates are recognised prospectively in the year in which the events are materialised.

II. Fixed Assets & Depreciation:

a) Fixed Assets are stated at original cost net of tax / duty credits availed, if any, less accumulated depreciation, accumulated amortisation and cumulative impairment. Costs include pre-operative expenses and all expenses related to acquisition and installation of the assets concerned.

b) Own manufactured assets are capitalised at cost including an appropriate share of overheads.

c) New Product Development Cost including Technology Fee payable to Technology providers will be appropriately capitalised as and when the liability gets crystalised with mutual consent of parties concerned.

d) (i) Depreciation has been provided under the Straight

Line Method as per the useful lives stated in Schedule II to the Companies Act 2013, except for Dies, Tools and Moulds, which are depreciated at 33.33%. Depreciation for Plant & Machinery has been provided on Triple shift basis.

(ii) Intangible assets are amortised as follows: -

i) Specialised software : Over a period of 4 years

ii) Fees for Technical : Over a period of 4 years Know-how

e) As at each balance sheet date, the carrying amount of assets is tested for impairment so as to determine ;

i) the provision for impairment loss, if any, required or ;

ii) the reversal, if any, required for impairment loss recognised in previous periods.

Impairment loss is recognised when the carrying amount of an asset exceeds its recoverable amount.

f) Leasehold Buildings are amortised over the lease period.

III. Investments:

a) Long Term Investments are stated at cost.

b) Current Investments are carried at lower of cost and fair value as on the Balance Sheet date.

c) Provision for diminution in value of long-term investments is made, if the diminution is other than temporary.

IV. Valuation of Inventories:

a) Inventories are valued at lower of cost and estimated net realisable value. Cost is arrived at, on weighted average basis.

b) Excise Duty is added in the Closing Inventory of Finished Goods.

c) The basis of determining cost for various categories of inventories are as follows:-

i) Raw Materials, Packing : Weighted Average Basis. Materials and Stores & spares

ii) Finished Goods and : Cost of Direct Material, Work-in-progress Labour and other Manufacturing overheads

V. Revenue Recognition:

a) The company generally follows the mercantile system of accounting and recognises income and Expenditure on an accrual basis except those with significant uncertainties.

b) Sale of goods is recognised when the risk and rewards of ownership are passed on to the customers, which is generally on despatch of goods.

c) Dividend Income is recognised when the right to receive the dividend is unconditional at the Balance Sheet date.

d) Interest is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

e) Claims made by the company including price escalations and those made on the Company are recognised in the Statement of Profit and Loss as and when the claims are accepted / liability is crystalised.

VI. Foreign Currency Transactions:

a) Foreign Currency Transactions are recorded at exchange rates prevailing on the date of such transaction.

b) Foreign currency assets and liabilities at the year end are realigned at the exchange rate prevailing at the year end and difference on realignment is recognised in the Statement of Profit & Loss.

c) Premium / Discount in respect of Forward Contract is amortised as expense / income over the period of contract. Exchange difference arising on forward contracts between the exchange rate on the date of the transaction and the exchange rate prevailing at the year end is recognised in the Statement of Profit and Loss.

VII. Research and Development:

Revenue Expenditure on Research and Development is charged under respective heads of account. Capital expenditure on research and development is included as part of fixed assets and depreciated on the same basis as other fixed assets.

VIII. Employee Benefits:

a) Short-term employee benefits are recognised as an expense at the undiscounted amount in the Statement of Profit and Loss of the year in which the related service is rendered.

b) Post employment and other long term benefits, which are defined benefit plans, are recognised as an expense in the Statement of Profit and Loss for the year in which the employee has rendered service. The expense is recognised based on the present value of the obligation determined in accordance with Accounting Standard 15 on "Employee Benefits". Actuarial gains & losses are charged to the Statement of Profit and Loss.

c) Payments to defined contribution schemes are charged as expense as and when incurred.

d) Termination benefits are recognised as an expense, as and when incurred.

IX. Borrowing Costs:

a) Borrowing Costs attributable to the acquisition or construction of qualifying assets are capitalised as part of such assets. All other borrowing costs are charged to revenue.

b) A qualifying asset is an asset that necessarily requires substantial period of time to get ready for its intended use or sale.

X. Taxes on Income:

a) Current tax on income for the period is determined on the basis of taxable income and tax credits computed in accordance with the provisions of the Income Tax Act, 1961 and based on the expected outcome of assessment / appeals.

b) Deferred tax is recognised on timing differences between the accounting income and the taxable income for the year, and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date.

c) Deferred tax assets are recognised and carried forward to the extent that there is a reasonable certainty that sufficient future income will be available against which such deferred tax assets can be realised.

XI. Operating Leases :

Lease arrangements, where the risks and rewards incidental to the ownership of an asset substantially vest with the lessor, are recognised as an operating lease.

Lease payments under operating leases are recognised as an expense on a straight line basis over the lease period.

The Assets given under operating leases are shown in Balance Sheet under Fixed Assets and depreciated on a basis consistent with the depreciation policy of the company. The lease income is recognised in the Statement of Profit and Loss on a straight line basis over the lease period.

XII. Government Grant and Subsidies :

Grants and subsidies from the Government are recognised when there is a reasonable assurance that Grant / Subsidy are received and all attached conditions complied with. Grant related to specific fixed assets are presented in the Balance Sheet by showing such Grant as deduction from the Fixed Asset concerned. Grants received in the nature of promotors contribution is credited to Capital Reserve and treated as a part of Shareholders' fund.

XIII. Earnings per Share :

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period are adjusted for events of bonus issue, bonus element in a rights issue to existing shareholders, share split and consolidation of shares, if any.

For the purpose of calculating diluted earnings per share, the 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.

XIV. Provisions :

A provision is recognised when an enterprise has a present obligation as a result of past event and it is probable that an outflow of resources would be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions 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.

XV. Cash and Cash equivalents :

Cash flow are reported using the indirect method, whereby net profit / loss before tax is adjusted for the effects of transaction of a non cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flow comprises regular revenue generating, investing and financing activities of the company. Cash and cash equivalents in the balance sheet comprise of cash at bank and in hand and short term, highly liquid investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value.


Mar 31, 2014

1 Overview of the Group

HOV Services Limited ("Parent"), its subsidiaries and an associate collectively referred to as "the Group" is headquartered in Pune, India and operate as a hybrid between various investment portfolios and a diversified services corporation including software development, support services and environmental solutions. The Parent organize its portfolio companies by industry by sector with forward-looking goals for combination based on the ultimate benefit to the target customer base and to us as the owners.

2. Basis of Preparation of Consolidated Financial Statements

The consolidated financial statements are prepared and presented under historical cost convention on the accrual basis of accounting in accordance with the accounting principles generally accepted in India (''GAAP'') and in compliance with the Accounting Standards (''AS'') prescribed by the Companies (Accounting Standards) Rules, 2006, the provisions of the Companies Act, 1956 and guidelines issued by the Securities and Exchange Board of India to the extent applicable.

3. Use of Estimates

The preparation of consolidated financial statements in conformity with AS and GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures of contingent liabilities on the date of financial statements and reported amounts of revenue and expenses for that year. Actual result could differ from these estimates. Any revision to accounting estimates is recognized prospectively.

4. Principles of Consolidation

The consolidated financial statements include the financial statements of HOV Services Ltd and all it''s subsidiaries, which are more than 50% owned or controlled have been prepared in accordance with the consolidation procedures under AS 21 – ''Consolidated Financial Statements and an associate consolidated as per AS 23 –''Accounting for Investments in associates in consolidated financial statement'' prescribed by the Companies (Accounting Standards) Rules, 2006.

The consolidated financial statements have been prepared on the following basis:

- The financial statements of the parent and the subsidiaries have been combined on a line-by-line basis by adding together the book values of like items of assets, liabilities, income and expenses after eliminating intra-group balances / transactions and resulting profits in full.

- The consolidated financial statements are presented, to the extent possible, in the same format as that adopted by the parent for its separate financial statements.

- The consolidated financial statements are prepared using uniform accounting policies across the Group.

- Goodwill arising on consolidation

The excess of cost to the parent of its investment in subsidiaries over its portion of equity in the subsidiaries at the respective dates on which investment in subsidiaries was made is recognized in the financial statements as goodwill. The parent''s portion of equity in the subsidiaries is determined on the basis of the value of assets and liabilities as per the financial statements of the subsidiaries as on the date of investment.

5. Accounting Treatment for Investment in Associate:

Equity accounted associate are entities in respect of which, the group has significant influence, but not control, over the financial and operating policies. Investments in such entities are accounted for using the equity method (equity accounted associate) and are initially recognized at cost. The excess of the parent''s portion of equity of the associate over its cost its investment in the associate, at the date on which investment in the associate is made, is recognized in the consolidated financial statements as a capital reserve and the excess of cost to the parent of its investment in associate over its portion of equity in the associate is recognized in the consolidated financial statements as a Goodwill.

7. Revenue Recognition

a) Revenue from Software & IT enabled services are recognized as per the work orders/ agreements entered with the customers.

b) Rental and Interest income is recognized on time proportion basis and is disclosed under Other Income.

c) The revenue from supply of material is recognized on delivery and/or as per the agreements entered with the parties. In respect of revenue from installation and commissioning of Environmental projects are recognized on the basis of running/final invoices for the work completed. And in respect of consultancy services the income is recognized as and when the services are rendered or the invoices are raised.

8. Unbilled Revenue/Work In Progress :

Revenue recognized over and above the billings is classified as Unbilled Revenue.

Work in Progress (Environment Segment) comprise of work done and will be billed to the customers as per the agreement and valued at cost.

9. Fixed Assets

Tangible: Fixed assets are stated at historical cost, which comprises of purchase consideration and other directly attributable cost of bringing an asset to its working condition for the intended use, less accumulated depreciation.

Intangible: Costs that are directly associated with identifiable and unique software products controlled by the group, developed in-house or acquired, and have probable economic benefits exceeding the cost beyond one year are recognized as software products. Other acquired softwares meant for in-house consumption are capitalized at the acquisition price.

10. Impairment of Assets

In accordance with AS 28 on ''Impairment of Assets'' prescribed by Companies (Accounting Standards) Rules, 2006 , where there is an indication of impairment of the Group''s assets related to cash generating units, the carrying amounts of such assets are reviewed at each balance sheet date to determine whether there is any impairment. The recoverable amount of such assets is estimated as the higher of its net selling price and its value in use. An impairment loss is recognized whenever the carrying amount of such assets exceeds its recoverable amount. Impairment loss is recognized in the Statement of Profit and Loss. If at the balance sheet date, there is an indication that a previously assessed impairment loss no longer exists, then such loss is reversed and the asset is restated to extent of the carrying value of the asset that would have been determined (net of amortization / depreciation) had no impairment loss been recognized.

11. Method of Depreciation / Amortization: I) Parent Company

a) Tangible Assets - Depreciation is provided on Straight Line Method at the rate and in the manner prescribed in the Schedule XIV of the Companies Act, 1956. Individual assets acquired for less than Rs 5,000 are entirely depreciated in the year of acquisition.

Investment property is amortized over the period of lease.

b) Intangible Assets – Software product (meant for sale) are amortized over its estimated useful life of 8 years. Other Software products are depreciated over its period of license.

12. Investments

Investments are classified into long-term investments and current investments. Long-term investments are carried at cost and provision is made to recognize any decline, other than temporary, in the value of such investments. Current investments are carried at the lower of the cost and fair value and provision is made to recognize any decline in the value of investment.

13. Accounting of Employee Benefits Employee Benefits to employees in India

a) Gratuity:

The parent Company provides for gratuity, a defined benefit retirement plan, covering eligible employees. Liability under gratuity plan is determined on actuarial valuation done by the Life Insurance Corporation of India (LIC) at the beginning of the year, based upon which, the parent Company contributes to the Scheme with LIC. The parent Company also provides for the additional liability over the amount contributed to LIC based on the actuarial valuation done by an independent valuer using the Projected Unit Credit Method.

b) Provident Fund:

Retirement benefits in the form of Provident Fund / Pension Fund is a defined contribution scheme and the contributions are charged to the Statement of Profit and Loss of the period when the contributions to the respective funds are due.

c) Leave Entitlement:

Liability for Leave entitlement for employees is provided on the basis of Actuarial Valuation done during the period.

Employee Benefits to employees in Foreign Subsidiary Companies:

In respect of employees in Foreign Subsidiary Companies, contributions to defined contribution pension plans are recognized as an expense in the statement of profit & loss as incurred and necessary provision has been done as per applicable laws.

14. Accounting for Taxes on Income

Provision for current income tax is made on the basis of the estimated taxable income for the year in accordance with the specific applicable laws.

MAT credit asset pertaining to the Parent and its Indian subsidiary company is recognized and carried forward only if there is a reasonable certainty of it being set off against regular tax payable within the stipulated statutory period.

Deferred tax resulting from timing differences between book and tax profits is accounted for under the liability method, at the current rate of tax, to the extent that the timing differences are expected to crystallize. Deferred tax assets are recognized and carried forward only if there is a reasonable / virtual certainty that they will be realized and are reviewed for the appropriateness of their respective carrying values at each balance sheet date.

The deferred Tax Assets /Liabilities and tax expenses are determined separately for parent and each subsidiary company, as per their applicable laws and then aggregated.

15. Translation of Foreign Currency Items

(i) Initial Recognition

Transactions in foreign currency are recorded at the rate of exchange in force on the date of the transactions. Current assets, current liabilities and borrowings denominated in foreign currency are translated at the exchange rate prevalent at the date of the Balance Sheet. The resultant gain/loss is recognized in the Statement of Profit & Loss.

(ii) Conversion

All the activities of the foreign subsidiaries are carried out with a significant degree of autonomy from those of the Parent. Accordingly, as per the provisions of AS – 11 "Effects of changes in foreign exchange rates", these operations have been classified as ''Non integral operations'' and therefore, all assets and liabilities, both monetary and non- monetary, are translated at the closing rate while the income and expenses are translated at the average rate for the year. The resulting exchange differences are accumulated in the foreign currency translation reserve until the disposal of net investment.

16. Borrowing Costs

Borrowing costs directly attributable to acquisition, construction and production of qualifying assets are capitalized as a part of the cost of such asset up to the date of completion. Other borrowing costs are charged to the Statement of Profit & Loss.

17. Lease

Where the Group has substantially acquired all risks and rewards of ownership of the assets, leases are classified as financial lease. Such assets are capitalized at the inception of the lease, at the lower of the fair value or present value of minimum lease payment and liability is created for equivalent amount. Each lease rent paid is allocated between liability and interest cost so as to obtain constant periodic rate of interest on the outstanding liability for each year.

Where significant portion of risks and reward of ownership of assets acquired under lease are retained by lessor, leases are classified as Operating Lease. Lease rentals for such leases are charged to Statement of Profit & Loss.

18. Provisions, Contingent Liabilities and Contingent Assets

i) Provisions involving substantial degree of estimation in measurement are recognized when there is present obligation as a result of past events and it is probable that there will be outflow of resources.

ii) Disclosures for a contingent liability is made, without a provision in books, when there is an obligation that may, but probably will not, require outflow of resources.

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


Mar 31, 2013

I. a) Basis of preparation :

The financial statements have been prepared to comply in all material respects with the accounting standards notified under 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. This accounting policies have been consistently applied by the Company 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 amount of assets, liabilities, disclosures relating to contingent liabilities and assets as at the balance sheet date and the reported amounts of income and expenses during the year. Difference between the actual amounts and the estimates are recognised prospectively in the year in which the events are materialised.

II. Fixed Assets & Depreciation :

a) Fixed Assets are stated at original cost net of tax / duty credits availed, if any, less accumulated depreciation, accumulated amortisation and cumulative impairment. Costs include pre-operative expenses and all expenses related to acquisition and installation of the assets concerned.

b) Own manufactured assets are capitalised at cost including an appropriate share of overheads.

c) (i) Depreciation has been provided under the

Straight Line Method as per Schedule XIV to the Companies Act, 1956 except for Dies, Tools and Moulds, which are depreciated at 33.33%. Depreciation for Plant & Machinery has been provided on triple shift basis.

(ii) Intangible assets are amortised as follows: -

i) Specialised software : Over a period of 4 years

ii) Fees for technical : Over a period of Know-how 4 years

d) As at each balance sheet date, the carrying amount of assets is tested for impairment so as to determine;

i) the provision for impairment loss, if any, required or;

ii) the reversal, if any, required for impairment loss recognised in previous periods.

Impairment loss is recognised when the carrying amount of an asset exceeds its recoverable amount.

e) Leasehold Buildings are amortised over the lease period.

III. Investments :

a) Long Term Investments are stated at cost.

b) Current Investments are carried at lower of cost and fair value as on the Balance Sheet date.

c) Provision for diminution in value of long term investments is made, if the diminution is other than temporary.

IV. Valuation of Inventories :

a) Inventories are valued at lower of cost and estimated net realisable value. Cost is arrived at on weighted average basis.

b) Excise Duty is added in the closing inventory of finished goods.

c) The basis of determining cost for various categories of inventories are as follows:

i) Raw Materials, Packing : Weighted Average Materials and Stores & Basis.

Spares

ii) Finished Goods and : Cost of Direct

Work-in-progress Material,

Labour & other

Manufacturing

overheads

V. Revenue Recognition :

a) The Company generally follows the mercantile system of accounting and recognises income and expenditure on an accrual basis except those with significant uncertainties.

b) Sale of goods is recognised when the risk and rewards of ownership are passed on to the customers, which is generally on despatch of goods.

c) Dividend Income is recognised when the right to receive the dividend is unconditional at the Balance Sheet date.

d) Claims made by the Company and those made on the Company are recognised in the Statement of Profit and Loss as and when the claims are accepted.

e) Price increase / decrease consequent to fluctuations in market prices of input, are accounted as and when the same are approved by the customers.

VI. Foreign Currency Transactions :

a) Foreign Currency transactions are recorded at exchange rates prevailing on the date of such transaction.

b) Foreign Currency assets and liabilities at the year end are realigned at the exchange rate prevailing at the year end and difference on realignment is recognised in the Statement of Profit & Loss.

c) Premium / discount in respect of Forward Contract is amortised as expense / income over the period of contract. Exchange difference arising on forward contracts between the exchange rate on the date of the transaction and the exchange rate prevailing at the year end is recognised in the Statement of Profit and Loss.

VII. Research and Development :

Revenue Expenditure on Research and Development is charged under respective heads of account. Capital expenditure on research and development is included as part of fixed assets and depreciated on the same basis as other fixed assets.

VIII. Employee Benefits :

a) Short term employee benefits are recognised as an expense at the undiscounted amount in the Statement of Profit and Loss of the year in which the related service is rendered.

b) Post employment and other long term benefits, which are defined benefit plans, are recognised as an expense in the Statement of Profit and Loss for the year in which the employee has rendered service. The expense is recognised based on the present value of the obligation determined in accordance with Accounting Standard 15 on "Employee Benefits". Actuarial gains & losses are charged to the Statement of Profit and Loss.

c) Payments to defined contribution schemes are charged as an expense, as and when incurred.

d) Termination benefits are recognised as an expense as and when incurred.

IX. Borrowing Costs :

a) Borrowing costs attributable to the acquisition or construction of qualifying assets are capitalised as part of such assets. All other borrowing costs are charged to revenue.

b) A qualifying asset is an asset that necessarily requires substantial period of time to get ready for its intended use or sale.

X. Taxes on Income :

a) Current tax on income for the period is determined on the basis of taxable income and tax credits computed in accordance with the provisions of the

Income Tax Act, 1961 and based on the expected outcome of assessment / appeals.

b) Deferred tax is recognised on timing differences between the accounting income and the taxable income for the year, and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date.

c) Deferred tax assets are recognised and carried forward to the extent that there is a reasonable certainty that sufficient future income will be available against which such deferred tax assets can be realised.

XI. Operating Leases :

The premium paid for leasehold rights are amortised over the lease period. The annual lease payments are charged off to the Statement of Profit and Loss.

XII. Earnings per Share :

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period are adjusted for events of bonus issue, bonus element in a rights issue to existing shareholders, share split and consolidation of shares, if any.

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.

XIII. Provisions :

A provision is recongnised when an enterprise has a present obligation as a result of past event; and it is probable that an outflow of resources would be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions 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.

XIV. Cash and Cash equivalents :

Cash flow are reported using the indirect method, whereby net profit before tax is adjusted for the effects of transaction of a non cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flow comprises regular revenue generating, investing and financing activities of the company. Cash and cash equivalents in the balance sheet comprise of cash at bank and in hand and short term, highly liquid investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value.


Mar 31, 2012

I. Accounting Convention :

The financial statements have been prepared under Historical Cost Convention on the basis of going concern and in accordance with the accounting standards referred to in Section 211 (3C) of the Companies Act, 1956, wherever applicable.

II. Fixed Assets & Depreciation :

a) Fixed Assets are stated at original cost net of tax / duty credits availed, if any, less accumulated depreciation, accumulated amortisation and cumulative impairment. Costs include pre-operative expenses and all expenses related to acquisition and installation of the assets concerned.

b) Own manufactured assets are capitalised at cost including appropriate share of overheads.

c) (i) Depreciation has been provided under the Straight Line Method as per Schedule XIV to the Companies Act, 1956 except for Dies, Tools and Moulds, which are depreciated at 33.33%. Depreciation for Plant & Machinery has been provided on three shift basis.

(ii) Intangible assets are amortised as follows: -

i) Specialised software : Over a period of 4 years

ii) Fees for technical : Over a period of Know-how 4 years

d) As at each balance sheet date, the carrying amount of assets is tested for impairment so as to determine;

i) the provision for impairment loss, if any, required or;

ii) the reversal, if any, required of impairment loss recognised in previous periods.

Impairment loss is recognised when the carrying amount of an asset exceeds its recoverable amount.

III. Investments :

a) Long Term Investments are stated at cost.

b) Current Investments are carried at lower of cost and fair value as on the Balance Sheet date.

c) Provision for diminution in value of long term investments is made, if the diminution is other than temporary.

IV. Valuation of Inventories :

a) Inventories are valued at lower of cost and estimated net realisable value. Cost is arrived at on weighted average basis.

b) Excise Duty is added in the closing inventory of finished goods.

c) The basis of determining cost for various categories of inventories are as follows:

i) Raw Materials, Packing : Weighted Average Materials and Stores & Basis.

Spares

ii) Finished Goods and : Cost of Direct Work-in-progress Material,

labour & other Manufacturing overheads

V. Revenue Recognition :

a) The Company generally follows the mercantile system of accounting and recognises income and expenditure on an accrual basis except those with significant uncertainties.

b) Sale of goods is recognised when the risk and rewards of ownership are passed on to the customers, which is generally on despatch of goods.

c) Dividend Income is recognised when the right to receive the dividend is unconditional at the Balance Sheet date.

d) Claims made by the Company and those made on the Company are recognised in the Statement of Profit and Loss as and when the claims are accepted.

e) Price Increase / Decrease consequent to fluctuations in market prices, are accounted as and when the same are approved by the customers.

VI. Foreign Currency Transactions :

a) Foreign Currency transactions are recorded at exchange rates prevailing on the date of such transaction.

b) Foreign Currency assets and liabilities at the year end are realigned at the exchange rate prevailing at the year end and difference on realignment is recognised in the Statement of Profit & Loss.

c) Premium / discount in respect of Forward Contract is amortised as expense / income over the period of contract. Exchange difference arising on forward contracts between the exchange rate on the date of the transaction and the exchange rate prevailing at the year end is recognised in the Statement of Profit and Loss.

VII. Research and Development :

Revenue Expenditure on Research and Development is charged under respective heads of account. Capital expenditure on research and development is included as part of fixed assets and depreciated on the same basis as other fixed assets.

VIII. Employee Benefits :

a) Short term employee benefits are recognised as an expense at the undiscounted amount in the Statement of Profit and Loss of the year in which the related service is rendered.

b) Post employment and other long term benefits, which are defined benefit plans are recognised as an expense in the Statement of Profit and Loss for the year in which the employee has rendered service. The expense is recognised based on the present value of the obligation determined in accordance with Revised Accounting Standard 15 on "Employee Benefits". Actuarial gains & losses are charged to the Statement of Profit and Loss.

c) Payments to defined contribution schemes are charged as expense as and when incurred.

d) Termination benefits are recognised as an expense as and when incurred.

IX. Borrowing Costs :

a) Borrowing costs attributable to the acquisition or construction of qualifying assets are capitalised as part of such assets. All other borrowing costs are charged to revenue.

b) A qualifying asset is an asset that necessarily requires substantial period of time to get ready for its intended use or sale.

X. Taxes on Income :

a) Current tax on income for the period is determined on the basis of taxable income and tax credits computed in accordance with the provisions of the Income Tax Act, 1961 and based on the expected outcome of assessment / appeals.

b) Deferred tax is recognised on timing differences between the accounting income and the taxable income for the year, and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date.

c) Deferred tax assets are recognised and carried forward to the extent that there is a reasonable certainty that sufficient future income will be available against which such deferred tax assets can be realised.

XI. Accounting Standards :

Accounting Standards as prescribed under Section 211 (3C) of the Companies Act, 1956 have been followed wherever applicable.

XII. Operating Leases :

The premium paid for leasehold rights are amortised over the lease period. The annual lease payments are charged off to the Statement of Profit and Loss.


Mar 31, 2010

1. Accounting Convention:

The financial statements have been prepared under Historical Cost Convention on the basis of going concern and in accordance with the accounting standards referred to in Section 211 (3C) of the Companies Act, 1956, wherever applicable.

2. Fixed Assets & Depreciation:

a) Fixed Assets are stated at original cost net of tax/ duty credits availed, if any, less accumulated depreciation, accumulated amortisation and cumulative impairment. Costs include pre-operative expenses and all expenses related to acquisition and installation of the assets concerned.

b) Own manufactured assets are capitalised at cost including an appropriate share of overheads.

c) (i) Depreciation has been provided under the

Straight Line Method as per Schedule XIV to the Companies Act, 1956 except for Dies, Tools and Moulds, which are depreciated at 33.33%. Depreciation for Plant & Machinery has been provided on three shift basis.

(ii) Intangible assets are amortised as follows:

i) Specialised software : Over a period of 4 years.

ii) Fees for technical : Over a period of know-how 4 years.

d) As at each balance sheet date, the carrying amount of assets is tested for impairment so as to determine;

i) the provision for impairment loss, if any, required or;

ii) the reversal, if any, required of impairment loss recognised in previous periods.

Impairment loss is recognised when the carrying amount of an asset exceeds its recoverable amount.

3. Investments:

a) Long Term Investments are stated at cost.

b) Current Investments are carried at lower of cost and fair value as on the Balance Sheet date.

c) Provisions for diminution in value of long term investments is made, if the diminution is other than temporary.

4. Valuation of Inventories:

a) Inventories are valued at lower of cost and estimated net realisable value. Cost is arrived at on weighted average basis.

b) Excise Duty is added in the Closing Inventory of Finished Goods.

c) The basis of determining cost for various categories of inventories are as follows:

i) Raw Materials, Packing : Weighted Average Materials and Stores basis. & spares ii) Finished Goods and : Cost of Direct Work-in-Progress Material, Labour &

other Manufacturing overheads.

5. Revenue Recognition:

a) The company generally follows the mercantile system of accounting and recognises income and expenditure on an accrua) basis except those with significant uncertainties.

b) Sale of goods is recognised when the risk and rewards of ownership are passed on to the customers, which is generally on dispatch of goods.

c) Dividend Income is recognised when the right to receive the dividend is unconditional at the Balance Sheet date.

d) Claims made by the company and those made on the company are recognised in the profit and loss account as and when the claims are accepted.

e) Price Increase / Decrease consequent to fluctuations in market prices, are accounted as and when the same are approved by the customers.

6. Foreign Currency Transactions:

a) Foreign currency transactions are recorded at exchange rates prevailing on the date of such transaction.

b) Foreign currency assets and liabilities at the year end are realigned at the exchange rate prevailing at the year end and difference on realignment is recognised in the Profit & Loss account.

c) Premium / discount in respect of Forward Contract is amortised as expense / income over the period of contract. Exchange difference arising on forward contracts between the exchange rate on the date of the transaction and the exchange rate prevailing at the year end is recognised in the Profit and Loss account.

7. Research and Development:

Revenue expenditure on Research and Development is charged under respective heads of account. Capital expenditure on research and development is included as part of fixed assets and depreciated on the same basis as other fixed assets.

8. Employee Benefits:

a) 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.

b) Post employment and other long term benefits which are defined benefit plans are recognised as an expense in the Profit and Loss Account for the year in which the employee has rendered service. The expense is recognised based on the present value of the obligation determined in accordance with Revised Accounting Standard 15 on "Employee Benefits". Actuarial gains & losses are charged to the Profit and Loss Account.

c) Payments to defined contribution schemes are charged as expense as and when incurred.

d) Termination benefits are recognised as an expense as and when incurred.

9. Borrowing Costs:

a) Borrowing costs attributable to the acquisition or construction of qualifying assets are capitalised as part of such assets. All other borrowing costs are charged to revenue.

b) A qualifying asset is an asset that necessarily requires substantial period of time to get ready for its intended use or sale.

10. Taxes on Income:

a) Current tax on income for the period is determined on the basis of taxable income and tax credits computed in accordance with the provisions of the Income Tax Act, 1961 and based on the expected outcome of assessment / appeals.

b) Deferred tax is recognised on timing differences between the accounting income and the taxable income for the year and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date.

c) Deferred tax assets are recognised and carried forward to the extent that there is a reasonable certainty that sufficient future income will be available against which such deferred tax assets can be realised.

11. Accounting Standards:

Accounting Standards as prescribed under section 211(3C) of the Companies Act, 1956 have been followed wherever applicable.

12. Operating Leases :

The premium paid for leasehold rights are amortised over the lease period. The annual lease payments are charged off to the Profit and Loss Account.

 
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