Home  »  Company  »  Rajoo Engineers  »  Quotes  »  Accounting Policy
Enter the first few characters of Company and click 'Go'

Accounting Policies of Rajoo Engineers Ltd. Company

Mar 31, 2018

A Significant Accounting Polices

A.1 Basis of Preparation of Financial Statements

Statement of Compliance with Indian Accounting Standards (IND AS): The financial statements have been prepared in accordance with IND AS notified under the Companies (Indian Accounting Standards) Rules, 2015 as amended and notifies under Section 133 of the Companies Act, 2013 (“the Act”) and other relevant provisions of the Act and other accounting principles generally accepted in India. These are the Companys first IND AS Financial Statements. The date of transition to IND AS is 1st April, 2016.

Up to the financial year ended on 31st March, 2017, the Company prepared its financial statements in accordance with the requirements of the previous applicable GAAP which included the Standards notified under the Companies (Accounting Standards) Rules, 2006 notified under Section 133 of the Act and other relevant provisions of the Act.

First time adoption: In accordance with IND AS 101 on First-time adoption of Indian Accounting Standards, the Companys first IND AS financial statements include, three balance sheets viz. the opening balance sheet as at 1st April, 2016 and balance sheets as at 31st March, 2017 and 2018, and, two statements each of profit and loss, cash flows and changes in equity for the years ended 31st March, 2017and 2018 together with related notes. The same accounting policies have been used for all periods presented, (except where the company has made use of exceptions and exemptions allowed under IND AS 101 in the preparation of the opening IND AS balance sheet which have been disclosed in note: D)

A.2 Summary of Significant Accounting Policies

A.2.1 Property, Plant and Equipment

Property, Plant and equipment are stated at cost, net of recoverable taxes, trade discount and rebates less accumulated depreciation and impairment losses, if any. Such cost includes purchase price, borrowing cost and any cost directly attributable to bringing the assets to its working condition for its intended use, net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the assets.

Subsequent costs are included in the asset’s carrying amount or recognized as separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the entity and the cost can be measured reliably.

Depreciation on Property, plant and equipment is provided on Straight Line Method (SLM) over the estimated useful lives of the assets considering the nature, estimated usage, operating conditions, past history or replacement, anticipated technological changes, manufacturer’s warranties and maintenance support.

Depreciation is provided based on useful life of the assets as prescribed in Schedule II to the Companies Act, 2013 except in respect of the following assets, where useful life is different than those prescribed in Schedule II.

The residual values, useful lives and methods of depreciation of Property, plant and equipment are reviewed at the end of each reporting period and adjusted prospectively, if appropriate.

Gains or losses arising from derecognition of a property, plant and equipment are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the Statement of Profit and Loss when the asset is derecognized.

A.2.2 Intangible Assets

Intangible Assets are stated at cost of acquisition net of recoverable taxes, trade discount and rebates less accumulated amortization/depletion and impairment loss, if any. Such cost includes purchase price, borrowing costs, and any cost directly attributable to bringing the asset to its working condition for the intended use, net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the intangible assets.

Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the entity and the cost can be measured reliably.

Gains or losses arising from de recognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the Statement of Profit and Loss when the asset is derecognized.

A.2.3 Research and Development Expenditure

Revenue expenditure pertaining to research is charged to the Statement of Profit and Loss. Development costs of products are charged to the Statement of Profit and Loss.

The company has recognized the research & development expenditure incurred for the development, modification, upgradation of plastic processing machinery and spares manufacturing. The capital expenditure is recognized and included in the cost of Plant & Machinery and Computer in the Balance sheet and Revenue expenditure is charged to Statement of Profit and Loss Account as detailed here;

A.2.4 Inventories

Items of inventories are measured at lower of cost and net realizable value after providing for obsolescence, if any. Cost of inventories comprises of cost of purchase, cost of conversion and other costs including manufacturing overheads net of recoverable taxes incurred in bringing them to their respective present location and condition.

Cost of raw materials, consumable and other products are determined on weighted average basis.

A.2.5 Provisions

Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.

A.2.6 Employee Benefits Expense Short Term Employee Benefits

The undiscounted amount of short term employee benefits expected to be paid in exchange for the services rendered by employees are recognized as an expense during the period when the employees render the services.

Post-Employment Benefits Defined Contribution Plans

Adefined contribution plan is a post-employment benefit plan under which the Company pays specified contributions to a separate entity. The Company makes specified monthly contributions towards Provident Fund. The Companys contribution is recognized as an expense in the Statement of Profit and Loss during the period in which the employee renders the related service.

Defined Benefit Plans

The Company pays gratuity to the employees whoever has completed five years of service with the Company at the time of resignation/superannuation. The gratuity is paid @15 days salary for every completed year of service as perthe Payment of Gratuity Act 1972.

The gratuity liability amount is contributed to the approved gratuity fund formed exclusively for gratuity payment to the employees. The gratuity fund has been approved by respective IT authorities.

The liability in respect of gratuity and other post-employment benefits is calculated using the Projected Unit Credit Method and spread over the period during which the benefit is expected to be derived from employees’ services.

Re-measurement of defined benefit plans in respect of post-employment are charged to the Other Comprehensive Income.

A.2.7 Tax Expenses

The tax expense for the period comprises current and deferred tax. Taxis recognized in Statement of Profit and Loss, except to the extent that it relates to items recognized in the comprehensive income or in equity. In which case, the tax is also recognized in other comprehensive income or equity.

- Current tax

Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities, based on tax rates and laws that are enacted or substantively enacted at the Balance sheet date.

- Deferred Tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The carrying amount of deferred tax liabilities and assets are reviewed at the end of each reporting period.

A.2.8 Foreign currencies transactions

The functional currency of the company is the Indian Rupee. These financial statements are presented in Indian Rupees.

Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency closing rates of exchange at the reporting date.

Gain or losses upon settlement of foreign currency transactions are recognized in the statement of profit and loss for the period in which the transaction is settled.

A.2.9 Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable. Revenue is recognized when it is earned and no significant uncertainty exists as to its realization or collection.

-Sale of goods

Revenue from sale of goods is recognized when ownership in the goods is transferred to the buyer for a price, when significant risks and rewards of ownership have been transferred to the buyer and no effective control, to a degree usually associated with ownership, is retained by the Company. Sale of goods are stated net of trade discounts and volume rebates and include excise duty up to 30th June, 2017.

- Income from services

Income from service rendered is recognized based on the terms of the agreements as and when services are rendered and are net of applicabletaxes.

-Other Income - Interest income

Interest income from a financial asset is recognized using effective interest rate method.

- Dividend Income

Dividend income on investments is recognized when the right to receive dividend is established.

A.2.10 Financial instruments

A.2.10.1 Financial Assets

- Initial recognition and measurement

All financial assets and liabilities are initially recognized at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities, which are not at fair value through profit or loss, are adjusted to the fair value on initial recognition. Purchase and sale of financial assets are recognized using trade date accounting.

- Subsequent measurement

- Financial assets carried at amortized cost (AC)

A financial asset is measured at amortized cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

- Financial assets at fair value through other comprehensive income (FVTOCI)

A financial asset is measured at FVTOCI if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

- Financial assets at fair value through profit or loss (FVTPL)

Afinancial assetwhich is not classified in any of the above categories are measured at FVTPL.

- Investment in subsidiaries, Associates and Joint Ventures

The Company has accounted for its investments in joint venture at cost.

- Other Equity Investments

All other equity investments are measured at fair value, with value changes recognized in Statement of Profit and Loss, except for those equity investments for which the Company has elected to present the value changes in Other Comprehensive Income1.

A.2.10.2 Financial Liabilities

- Initial recognition and measurement

All financial liabilities are recognized at fair value and in case of loans, net of directly attributable cost. Fees of recurring nature are directly recognized in the Statement of Profit and Loss as finance cost.

- Subsequent measurement

Financial liabilities are carried at amortized cost using the effective interest method. For trade and other payables maturing within one year from the balance sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.

A.2.11FairValue Measurement

The Company measures financial instruments at fair value at each balance sheet date.

The fair value of an asset or a liability is measured usinq the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs. The Company uses the following hierarchy for determining and disclosing thefair value of financial instruments by valuation technique:

Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities.

Level 2: Other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.

Level 3: Techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data.

For assets and liabilities that are recognized in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.


Mar 31, 2015

(i) Use of Estimates

The preparation of financial statements in conformity with Indian GAAP requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although these estimates are based on the management''s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring adjustment to carrying amounts of assets or liabilities in future periods. Difference between the actual results and estimates are recognized in the period in which the results are known /materialized.

3.02 Inventories:

Items of inventories are measured at lower of cost or net realizable value after providing for obsolescence, if any. Cost of inventories comprises of cost of purchase, cost of conversion and other cost including manufacturing overheads incurred in bringing them to their respective present condition and location. Cost of Raw Material including components, Testing Materials, Scrap and consumable stores are determined on FIFO basis.

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

3.03 Depreciation:

Depreciation on tangible assets and intangible assets is provided on the straight line method over the useful lives of assets prescribed under Part C of Schedule II of the Companies Act, 2013.

3.04 Revenue Recognition:

In appropriate circumstances, Revenue income is recognized when no significant uncertainty as to determination or realization exists. Interest income is recognized on a time proportion basis taking into account the amount outstanding and rate applicable.

3.05 Fixed Assets:

Tangible fixed assets are stated at cost net of recoverable taxes less accumulated depreciation.

Intangible assets are stated at cost of acquisition net of recoverable taxes less accumulated depreciation.

3.06 Foreign Currency Transactions:

(i) Transactions dominated in foreign currencies are recorded at the exchange rate prevailing on the date of 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 recognized as exchange difference and the premium paid on forward contracts is recognized over the life of the contracts.

(iii) In respect of branches, which are integral foreign operations, all transactions are translated at rates prevailing on the date of transaction or that approximates the actual rate at the date of transactions. Branch monetary assets and liabilities are restated at the year end rates.

(iv) Any income or expenses on account of exchange difference either on settlement or on translation is recognized in the profit or loss account.

3.07 Retirement Benefit:

i) Provident fund:

Retirement benefit in the form of provident fund is a defined contribution scheme. The contributions to the provident fund are charged to the statement of profit and loss for the year when the contributions are due. The company has no obligation, other than the contribution payable to the provident fund.

ii) Gratuity:

The company has established the employees Group Gratuity-Cum-Life Assurance Scheme with Life Insurance Corporation of India through employees trust. The cost of providing benefit under the scheme are determined on the basis of actuarial valuation at each year end and contribution for the year is charged to the statement of profit and loss for the year.

iii) Leave Encashment:

The company measures the expected cost that it expects to pay as a result of unused entitlement that has accumulated at the reporting date and the earned leave amount for the current reporting period is charged to the statement of profit and loss for the year. The company presents the entire leave as current liability in the balance sheet, since it does not have an unconditional right to defer its settlement for 12 months after the reporting date.

3.08 Borrowing Cost:

Borrowing costs that are attributable to the acquisition or construction of assets are capitalized as part of cost of such assets. All other borrowing costs are charged to revenue.

3.09 Related Parties Disclosures:

As required by Accounting Standard (AS) - 18 "Related Party Disclosures" is made as under:

(i) List of related parties where control exits and related parties with whom transactions have taken place and relationship. Names of the related party and description of relationship with whom there were transactions during the year.

3.10 Lease:

In earlier year, the Crome Plating Division of the factory at Veraval (Shapar), Rajkot was given on lease to M/s. Shail Engineers for a monthly rent of Rs.50,000/-. The lease rental agreement has not been renewed during the year.

3.11 Provision for Current and Deferred Tax:

Provision for Current tax is based on the assessable income under the provisions of the Income-tax Act, 1961.

Deferred tax is recognized on timing difference between taxable income and accounting income that originate in one period and capable of reversal in one or more subsequent periods. Deferred tax resulting from "timing differences" is accounted for using tax rates and laws that have been enacted or substantively enacted as on the balance sheet date. The deferred tax assets is recognized and carried forward only to the extent that there is a reasonable / virtual certainty that the asset will be realized in future.

3.12 Impairment of Assets:

An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to statement of profit and loss account 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.

3.13 Provisions, Contingent Liabilities and Contingent Assets:

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognized nor disclosed in the Financial Statements.

3.14 Segment Reporting:

As the company''s business activity falls within a single business segment viz. Plastic Processing Machineries and post extrusion equipments, the disclosure requirements of Accounting standard (AS) 17 "Segment reporting" issued by the Institute of Chartered Accountants of India is not applicable.


Mar 31, 2012

1.01 Disclosure of Accounting Policies:

(i) Presentation and disclosure of financial statements

The revised schedule VI notified under the companies Act, 1956, has become applicable to the company, for preparation and presentation of its financial statements for the current year. The adoption of revised schedule VI does not impact recognition and measurement principal followed for preparation and presentation of its financial statements. However, it has significant impact on presentation and disclosures made in the financial statements. The company has also reclassified the previous year figures in accordance with the requirements applicable in the current year.

(ii) Use of Estimates

The preparation of financial statements in conformity with Indian GAAP requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although these estimates are based on the management's best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring adjustment to carrying amounts of assets or liabilities in future periods. Difference between the actual results and estimates are recognized in the period in which the results are known /materialized.

1.02 Inventories:

Items of inventories are measured at lower of cost or net realizable value after providing for obsolescence, if any. Cost of inventories comprises of cost of purchase, cost of conversion and other cost including manufacturing overheads incurred in bringing them to their respective present condition and location. Cost of Raw Material including components, Testing Materials, Scrap and consumable stores are determined on FIFO basis.

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

1.03 Depreciation:

Depreciation on tangible fixed assets is provided on straight line method (SLM) at the rate specified in schedule XIV of the Companies Act, 1956.

Depreciation on intangible fixed assets is provided on straight line method (SLM) at the rate determined considering the estimated useful life of the assets.

1.04 Revenue Recognition:

In appropriate circumstances, Revenue income is recognized when no significant uncertainty as to determination or realization exists. Interest income is recognized on a time proportion basis taking into account the amount outstanding and rate applicable.

1.05 Fixed Assets:

Tangible fixed assets are stated at cost net of recoverable taxes less accumulated depreciation.

Intangible assets are stated at cost of acquisition net of recoverable taxes less accumulated depreciation,

1.06 Foreign Currency Transactions:

(i) Transactions dominated in foreign currencies are recorded at the exchange rate prevailing on the date of 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 recognized as exchange difference and the premium paid on forward contracts is recognized over the life of the contracts.

(iii) In respect of branches, which are integral foreign operations, all transactions are translated at rates prevailing on the date of transaction or that approximates the actual rate at the date of transactions. Branch monetary assets and liabilities are restated at the year end rates,

(iv) Any income or expenses on account of exchange difference either on settlement or on translation is recognized in the profit or loss account.

1.07 Retirement Benefit:

i) Provident fund:

Retirement benefit in the form of provident fund is a defined contribution scheme. The contributions to the provident fund are charged to the statement of profit and loss for the year when the contributions are due. The company has no obligation, other than the contribution payable to the provident fund.

ii) Gratuity:

The company has established the employees Group Gratuity-Cum-Life Assurance Scheme with Life Insurance Corporation of India through employees trust. The cost of providing benefit under the scheme are determined on the basis of actuarial valuation at each year end and contribution for the year is charged to the statement of profit and loss for the year.

iii) Leave Encashment:

The company measures the expected cost that it expects to pay as a result of unused entitlement that has accumulated at the reporting date and the earned leave amount for the current reporting period is charged to the statement of profit and loss for the year. The company presents the entire leave as current liability in the balance sheet, since it does not have an unconditional right to defer its settlement for 12 months after the reporting date.

1.08 Borrowing Cost:

Borrowing costs that are attributable to the acquisition or construction of assets are capitalized as part of cost of such assets. All other borrowing costs are charged to revenue.

1.09 Related Parties Disclosures:

As required by Accounting Standard (AS) - 18 "Related Party Disclosures" is made as under:

(I) List of related parties where control exits and related parties with whom transactions have taken place and relationship. Names of the related party and description of relationship with whom there were transactions during the year.

1.10 Lease:

The lease arrangement with Veeram Pack Pvt. Ltd. (formerly known as Wonderpack Industries Pvt. Ltd.) for their factory at Nashik is terminated with effect from 30.09.2011 and Lease rent paid is charged to statement of Profit and Loss account of Wonderpack Division as prepared under Note No. 29 forming an integral part of financial statements.

For the Crome Plating Division of the factory at Veraval (Shapar), Rajkot, the company has entered into Rent Agreement with M/s. Shail Engineers from 01.04.2011 at monthly rent of Rs.50,000/- which is renewable every year.

1.11 Provision for Current and Deferred Tax:

Provision for Current tax is based on the assessable income under the provisions of the Income-tax Act, 1961.

Deferred tax is recognized on timing difference between taxable income and accounting income that originate in one period and capable of reversal in one or more subsequent periods. Deferred tax resulting from "timing differences" is accounted for using tax rates and laws that have been enacted or substantively enacted as on the balance sheet date. The deferred tax assets is recognized and carried forward only to the extent that there is a reasonable / virtual certainty that the asset will be realized in future.

1.12 Discontinuing Operations of Wonderpack Division, Nashik :

The company has discontinued manufacturing operations of Wonderpack Division at Nashik, (Maharashtra) from 30.09.2011 which was under lease arrangement and there are no plans for revival of manufacturing activities in near future.

Loss from Wonderpack Division, Nashik is separately disclosed as per Note No. 29,

The computers System remained after closure of the division are transferred to Veraval(Shapar), Rajkot Unit,

1.13 Impairment of Assets:

An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to statement of profit and loss account 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.

1.14 Provisions, Contingent Liabilities and Contingent Assets:

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognized nor disclosed in the Financial Statements.

Contingent Liability Rs. In Lacs

Bank Guarantee for Performance 19.42

1.15 Segment Reporting:

As the company's business activity falls within a single business segment viz. Plastic Processing Machineries and post extrusion equipments and as Nashik Unit do not affect predominantly risk and return of the enterprise on account of negligible turnover in relation to total turnover of the enterprise, the disclosure requirements of Accounting standard (AS) 17 "Segment reporting" issued by the Institute of Chartered Accountants of India is not applicable.


Mar 31, 2011

1. Basis of Preparations of financial statement:

The Financial statements are prepared in accordance with generally accepted accounting principles under historical cost convention on the accrual basis.

2. Use of Estimates:

The presentation 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 result and the estimates are recognized in the period in which the results are known /materialized.

3. Revenue Recognition:

In appropriate circumstances, revenue income is recognized when no significant uncertainty as to determination or realization exists.

4. Fixed Assets:

Fixed assets are stated at cost net of CENVAT, less accumulated depreciation. Direct costs are capitalized until fixed assets are ready for use. Capital work in progress comprised outstanding advances paid to acquire fixed assets and the cost of fixed assets that are not yet ready for their intended use before the balance sheet date are recorded at the consideration paid for acquisition.

5. Depreciation:

Depreciation on fixed assets is provided on straight line method (SLM) at the rate specified in schedule XIV of the Companies Act, 1956.

6. Foreign Currency transactions:

Foreign currency transaction forward contracts are stated at the forward contract rates while those not covered by forward contracts are restated at the rates ruling at the end of the year. Exchange differences relating to fixed assets are adjusted in the cost of the assets. Any other exchange differences are dealt with in the Profit & Loss A/c.

7. Investments:

Long term investments are stated at cost and provisions for diminution in the value of long term investments are made only if such a decline is other than temporary in the opinion of the management.

8. Retirement Benefits to Employees:

i) Provident fund:

The Company's contribution to provident fund and family pension fund is charged to profit & loss account. The company has no further obligation under Employees Provident fund Act.

ii) Gratuity:

The company has taken a group policy for gratuity with Life Insurance Corporation of India. The contribution on the basis of actuarial valuation is charged to profit and loss account. The company has no further obligation under Gratuity Act.

iii) Leave Encashment:

The liability for leave encashment payable to employees is debited to profit and loss account as calculated by the management.

iv) ESIC:

ESIC is applicable for Wonderpack Division Nashik only and the Company's contribution to ESIC is charged to Profit & Loss account. The Companyhas no further obligation under ESI Act.

9. Sales:

Sales is accounted excluding excise duty, service tax and Central sales tax (CST). Value Added Tax (VAT) collected on sales is accounted separately in the VAT - Input Credit Account.

10. Purchase:

Purchase of raw material and components, testing material, consumable stores are accounted excluding excise duty and Central Sales tax. Value Added tax (VAT) paid on purchase is accounted separately in VAT - Input Credit Account.

11. Excise duty (Including Education Cess & Secondary & Higher Secondary Education Cess):

The Excise duty is applicable to Raw Material and finished goods of the company. The company is eligible for CENVAT credit for excise duty paid on purchase of Raw material, Components and Stores. The Balance of CENVAT credit remained unavailed at the end of the year is eligible for carry forward for the purpose of set-off against excise duty payable on sales in subsequent year. The balance of CENVAT credit unavailed at the end of the year is shown under "Excise Duty Receivable" under "Loans and Advances" in the schedule of "Current Assets, Loans and Advances" forming part of Balance Sheet.

12. Sales tax:

a) The company is eligible for Set off of Value Added tax paid on purchases made from parties situated in the state of Gujarat as per the Provision of Gujarat Value Added Tax Act, 2003 and Maharashtra Value Added Tax Act, 2002. The amount eligible for sales-tax set-off is accounted separately in VAT- Input Credit Account and not included in the purchases of the company.

b) Value Added Tax collected on sales and eligible for VAT set-off as per the provision of Gujarat Value Added Tax Act 2003 and Maharashtra Value Added Tax Act,2002 is accounted separately in VAT- Input Credit Account and not included in the sales of the company. The Debit balance of VAT- Input Credit Account represents the excess of VAT paid on purchase over the VAT collected on sales and is shown under "VAT Receivable" under "Loans and Advances" in the schedule of "Current Assets, Loans and Advances" forming part of Balance Sheet.

13. Service Tax:

Service Tax on services availed and services provided are accounted separately in Service Tax Account and set-off is claimed against Excise Duty payable on Sales. The balance of the Service tax Credit un availed at the end of the year is shown under "Service Tax Receivable" under " Loans & Advances" in the schedule of "Current Assets, Loans and Advances" forming part of Balance sheet.

14. Inventories:

i) Raw Material & Components

It is valued at Purchase cost excluding Central Excise Duty but including Central Sales Tax and other cost incurred to bring the inventory to present condition and location. The Central Excise duty and Gujarat Value Added Tax paid on purchase are not considered in the valuation of inventories for the following reasons.

1) A purchase is accounted excluding Central Excise Duty and therefore, it is not considered for valuation of Inventories.

2) The Value Added Tax paid on purchases eligible for VAT set-off is accounted separately under VAT – Input Credit Account. It is not included in purchases and therefore, it is not considered for valuation of inventories.

ii) Testing Material

It is valued at Purchase cost including Central Sales Tax and other cost incurred to bring the inventory to present condition and location.

iii) Consumable stores

At cost or net realizable value whichever is lower.

iv) Scrap / Plastic Packing Material for Captive Consumption At cost or net realizable value whichever is lower.

v) Stock in Process

It is valued at Raw Material cost plus production cost incurred to bring the inventory to present condition and location.

vi) Finished Goods

It is valued at Selling rate.

The Finished Goods have been valued at selling price as the company manufactures goods on customer's order

15. Research and Development:

Expenditure relating to capital items is debited to fixed assets and depreciated at applicable rates. Revenue expenditure is charged to profit and loss account of the year.

16. Borrowing Costs:

Borrowing costs that are attributable to the acquisition or construction of assets are capitalized as part of cost of such assets. All other borrowing costs are charged to revenue.

17. Income Tax:

Provision for current tax is made on the basis of taxable income computed in accordance with the Income Tax Act, 1961.

18. Deferred tax:

Deferred tax is recognized on timing difference between taxable income and accounting income that originate in one period and capable of reversal in one or more subsequent periods. Deferred tax resulting from "timing differences" is accounted for using tax rates and laws that have been enacted or substantively enacted as on the balance sheet date. The deferred tax assets is recognized and carried forward only to the extent that there is a reasonable / virtual certainty that the asset will be realized in future.

19. Contingent Liabilities:

All liabilities have been provided for in the accounts except liabilities of a contingent nature, which have been disclosed at their estimated value in the Notes on Accounts.

20. Earning per share:

The company reports basic and diluted Earning per share (EPS) in accordance with Accounting standard (AS) - 20. Basic earning per share is computed by dividing net profit for the year by the weighted average number of shares outstanding during the period. Diluted earning per share is computed by dividing net profit by the weighted shares considered for deriving basic earning per share and also the weighted average number of equity shares that could have been issued on the conversion of all dilutive potential equity shares.


Mar 31, 2010

1. Basis of Preparations of financial statement:

The Financial statements are prepared in accordance with generally accepted accounting principles under historical cost convention on the accrual basis,

2. Use of Estimates

The presentation ot 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 result and the estimates are recognized in the period in which the results are known /materialized.

3. Revenue Recognition

in appropriate circumstances, revenue income is recognized when no significant uncertainty as to determination or realization exists.

4. Fixed Assets

Fixed assets are stated at cost net of CENVAT, less accumulated depreciation. Direct costs are capitalized until fixed assets are ready for use, Capital work in progress comprised outstanding advances paid to acquire fixed assets and the cost of fixed assets that are not yet ready for their intended use before the balance sheet date are recorded ai the consideration paid for acquisition.

5. Depreciation

Depreciation on fixed assets is provided on straight line method (SIM) at the rate specified in schedule XIV of the Companies Act, 1956.

6. Foreign Currency transactions

Foreign currency transaction forward contracts are stated at the forward contract rates while those not covered by forward contracts are restated at the rates ruling at the end of the year, Exchange differences relating to fixed assets are adjusted in the cost of the assets. Any other exchange differences are dealt with in the Profit & Loss A/a

7. Investments

Long term investments are stated at cost and provisions for diminution in the value of long term investments are made only if such a decline is other than temporary in the opinion of the management.

8. Retirement Benefits to Employees

i) Provident fund

The Companys contribution to provident fund and family pension fund is charged to profit & loss account. The company has no further obligation under Employees Provident fund Act,

ii) Gratuity

The company has taken a group policy for gratuity with Life Insurance Corporation of India, The contribution on the basis of actuarial valuation is charged to profit and loss account, The company has no further obligation under Gratuity Act,

iii) Leave Encashment

The liability for leave encashment payable to employees is debited to profit and loss account as calculated by the management,

9. Sales

Sales are accounted excluding excise duty, service tax and Central sales fax (CST). Value Added Tax (VAT) collected on sales is accounted separately in the VAT - input Credit Account,

10. Purchase

Purchase of raw material and components, testing material, consumable stores are accounted excluding excise duty and Centra! Sales tax, Value Added tax (VAT) paid on purchase is accounted separately in VAT - input Credit Account,

11. Excise duty (Including Education Cess & Secondary & Higher Secondary Education Cess)

The Excise duty is applicable to Raw Material and finished goods of the company. The company is eligible for CENVAT credit for excise duty paid on purchase of Raw material Components and Stores. The Balance of CENVAT credit remained unavailed at the end of the year is eligible for carry forward for the purpose of set-off against excise duty payable on sales in subsequent year. The balance of CENVAT credit unavailed at the end of the year is shown under "Excise Duty Receivable" under "Loans and Advances" In the schedule of "Current Assets, Loans and Advances" forming part of Balance Sheet.

12. Sales tax

a) The company Is eligible for Set off of Value Added tax paid on purchases made from parties situated in the state of Gujarat as per the Provision of Gujarat Value Added Tax Act, 2003. The amount eligible for sales-tax set-off is accounted separately in VAT-lnput Credit Account and not included In the purchases of the company.

b) Value Added Tax collected on sales and eligible for VAT set-off as per the provision of Gujarat Value Added Tax Act 2003 and is accounted separately in VAT- Input Credit Account and not included in the sales of the company The Debit balance of VAT-lnput Credit Account represents the excess of VAT paid on purchase over the VAT collected on sales and is shown under "VAT Receivable" under "Loans and Advances" in the schedule of "Current Assets, Loans and Advances" forming part of Balance Sheet,

c) In respect of the factory of the company situated at Village: Veraval (Shapar), Taluka; Kotda Sangani, District: Rajkot, Sales tax collected under deferred payment scheme 1990-95 of State Government Rs, 209.04 lacs is required to be repaid in six equal installment commencing from May-2004. The company has already paid Rs.209.04 lacs and there is no balance Amount unpaid at the end of the year,

13. Service Tax

Service Tax on services availed and services provided are accounted separately in Service Tax Account and set-off is claimed against Excise Duty payable on Sales.

14. Inventories

i) Raw Material & Components

It is valued at Purchase cost excluding Central Excise Duty but including Central Sales Tax other cost incurred to bring the inventory to present condition and location. The Central Excise duty and Gujarat Value Added Tax paid on purchase are not considered in the valuation of inventories for the following reasons,

1) Purchases are accounted excluding Central Excise Duty and therefore, if is not considered for valuation of Inventories.

2) As explained in para no, 12(a), the Value Added Tax paid on purchases eligible for VAT set-off is accounted separately under VAT - Input Credit Account, If is not included in purchases and therefore, it is not considered for valuation of inventories.

II) Testing Material

It is valued at Purchase cost including Central Sales Tax and other cost incurred to bring the inventory to present condition and location,

III) Consumable stores

At cost or net realizable value whichever is lower.

iv) Scrap / Plastic Packing Material for Captive Consumption At cost or net realizable value whichever is lower,

v) Stock in Process

It is valued at Raw Material cost plus production cost incurred to bring the inventory to present condition and location,

vi) Finished Goods

St is valued at selling rate,

The Finished Goods have been valued at selling price as the company manufactures goods on customers order specification and thus the finished goods at selling price reflects the realizable value, The finished goods have to be valued c0 lower of cost or net realizable value as per Accounting Standard (AS) - 2, Further, the quantum effect of deviation on the net profit Is as under;

15. Research and Development

Expenditure relating to capital items is debited to fixed assets and depreciated at applicable rates, Revenue expenditure is charged to profit and loss account of the year,

16. Borrowing Costs

Borrowing costs that are attributable to the acquisition or construction of assets are capitalized as part of cost of such assets. All other borrowing costs are charged to revenue.

17. Income Tax

Provision for current tax is made on the basis of taxable income computed in accordance with the Income Tax Act, 1961.

18. Deferred tax

Deferred tax is recognized on timing difference between taxable income and accounting income that originate in one period and capable of reversal in one or more subsequent periods, Deferred tax resulting from "timing differences" is accounted for using tax rates and laws that have been enacted or substantively enacted as on the balance sheet date. The deferred tax assets is recognized and carried forward only to the extent that there is a reasonable / virtual certainty that the asset will be realized in future.

19. Contingent Liabilities

All liabilities have been provided for in the accounts except liabilities of a contingent nature, which have been disclosed at their estimated value in the Notes on Accounts.

20. Earning per share

The company reports basic and diluted Earning per share (EPS) in accordance with Accounting standard (AS) - 20, Basic earning per share is computed by dividing net profit for the year by the weighted average number of shares outstanding during the period, Diluted earning per share is computed by dividing net profit by the weighted shares considered for deriving basic earning per share and also the weighted average number of equity shares that could have been issued on the conversion of all dilutive potential equity shares,

Get Instant News Updates
Enable
x
Notification Settings X
Time Settings
Done
Clear Notification X
Do you want to clear all the notifications from your inbox?
Settings X