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Accounting Policies of Real Strips Ltd. Company

Mar 31, 2015

Corporate Information

Real Strips Limited (the Company) is a Listed public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. The Company is engaged in Business of manufacturing/trading of Cold Rolled Stainless Strips/coils. Its shares are listed on Bombay Stock Exchange in India.

1.01 Basis of Preparation of Financial Statements

The Financial Statements are prepared to comply in all material respects with the Accounting Standards notified by the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013. The financial statements have been prepared under the historical cost convention on an accrual basis in accordance with the generally accepted accounting principles in India.

1.02 Use of Estimates

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

1.03 Tangible Assets :

a) Fixed assets are stated at cost of acquisition or construction less accumulated depreciation. The cost of fixed assets includes non refundable taxes, duties, freight and other incidental expenses related to the acquisition and installation of the respective assets.

b) All the preoperative expenditure including interest on borrowing for the project/ item, incurred on capital work in progress or on fixed assets upto the date of installation of the individual item as taken by the company is capitalized and added on pro-rata basis to the cost of respective fixed Assets.

1.04 Intangible Assets :

An intangible asset is recognised, only where it is probable that future economic benefits attributable to the asset will accrue to the enterprise and the cost can be measured reliably.

1.05 Borrowing Costs:

Borrowing Costs that are directly attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. Exchange difference arising from foreign currency term loan borrowing beyond adjustment to interest cost is capitalized as part of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue.

1.06 Impairment of Assets:

a) The Company assesses at each Balance Sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the assets. If such recoverable amount of the assets is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the statement of profit and loss. If at the Balance Sheet date there is an indication that if a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of depreciated historical cost.

b) After impairment, depreciation is provided on the revised carrying amount after deducting 5% of Historical cost of the asset over its remaining useful life.

1.07 Provisions, Contingent Liabilities and Contingent Assets:

A provision is recognised 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 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.

Contingent Liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the financial statements.

1.08 Leases:

Where the Company is the lessee

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item, are classified as operating leases. Operating lease payments are recognized as a Capital assets till the assets are not put to use.

1.09 Deferred Revenue Expenses And Public Issue Expenses:

Public Issue Expenses and Preliminary expenses are amortized over a period of 5 years.

1.10 Depreciation:

a) The company has provided Depreciation on Straight-Line Method (SLM) on a) Plant & Machinery and b) Vehicles over the useful life of Assets as defined in Schedule II of the Companies Act, 2013.

b) Building, Furniture & Fixtures and Computers are depreciated on the Written Down Method over the useful life of Assets as defined in Schedule II of the Companies Act, 2013.

c) The Life has been decided by the Management considering the type and nature of assets as defined in Schedule II of The Companies Act, 2013. Except in case of Workroll, where the useful life of the asset is taken as less than one year considering it's nature & frequent replacement.

d ) Since the Depreciation for the Year under consideration has been computed considering the Balance useful life of the assets to comply with requirements of Schedule II of Companies Act, 2013, and being a transitional year, the Impact of change in method of depreciation has been reported.

1.11 Inventories :

Raw materials,Work in Progress and finished goods are valued at lower of cost or net realisable value. Stores & spare parts are stated at cost. Cost comprise all cost of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and condition. Cost formulae used is 'First-in-First-Out method'.

1.12 Revenue Recognition

a) Revenue from operations (gross) represents the amounts receivable for goods and services sold including excise duty thereon, Interest for late payment and forfeiture of sales advances,but excludes VAT/CST, trade discounts & other taxes, adjustments for late delivery charges and material returned/rejected.

b) Interest income is recognized on time proportion basis taking into account the amounts outstanding and the rates applicable.

c) Dividend is recognized when the Company's right to receive dividend is established by the balance sheet date.

d ) Revenue from windmill is recognised on unit generation basis.

1.13 Raw Material Consumption :

Cost of Raw Material Consumed includes interest expenses for late payment to suppliers.

1.14 Excise / Custom Duties:

Excise Duty on manufactured goods remaining in the inventory is included as a part of valuation of finished goods & Scrap. The customs duty on raw materials, stores, spares & components is accounted on clearance thereof.

1.15 Foreign Currency Transactions :

a) Foreign currency transaction are accounted at the exchange rate prevailing on the date of transaction. Monetary items related to foreign currency transaction remaining unsettled at the end of the year are translated at year end rates. Any exchange gain or loss arising out of the subsequent fluctuation are accounted for in the Statement of Profit and Loss.

b) In respect of forward contracts assigned to the foreign currency assets/liabilities as at Balance Sheet date, the proportionate premium/discount for the period up to the date of Balance sheet is recognized in the Statement of Profit and Loss. The exchange difference measured by the exchange rate between the inception of the forward contract and agreed contracted rate is applied on foreign currency amount of the forward contract.

1.16Treatment Of Retirement Benefits :

Company contributes to group gratuity policy with SBI Life Insurance as per actuarial valuation as on the Balance Sheet date for future payment of Gratuity to employees. Company's contributions paid/payable during the year to Provident Fund are charged to the Statement of Profit & Loss. Privilege leave is accounted for on accrual basis.

1.17Taxation:

Income-tax expense comprises current tax and deferred tax charge or credit. Tax on income for the current period is determined on financial year basis computed in accordance with the provisions of the Income Tax Act,1961 and based on expected outcome of assessment/appeal.

Minimum Alternative Tax (MAT) paid in accordance to the tax laws , which gives rise to the future economic benefits in the form of adjustment of future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax after the tax holiday period . Accordingly, MAT is recognised as an asset as MAT Credit Entitlement in the balance sheet when it is probable that the future economic benefit associated with it will flow to the Company and the asset can be measured reliably.

1.18 Deferred Taxation:

The deferred tax charge or credit is recognised using the tax rates that have been enacted or substantially enacted by the balance sheet date. Where there is unabsorbed depreciation or carry forward losses, deferred tax assets are recognised only if there is virtual certanity of realisation of such assets. Other deferred tax assets are recognised only to the extent there is reasonable certanity of realisation in future. Deferred tax assets/ liabilities are reviewed as at each Balance Sheet date based on development during the year and available case laws, to reassess realisation/liabilities.

1.19 Investment:

Investments are stated at cost. Dimunition in the value, if any, which is of permanent nature is provided for.

1.20 Cash and Cash Equivalents

Cash and cash equivalents for the purposes of cash flow statement comprise cash at bank and in hand and short- term investments with an original maturity of three months or less.

1.21 Cash Flow Statement

Cash flow statement is prepared using the indirect method, whereby profit before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flow from operating, investing and financing activities of the Company are segregated based on the available information.

1.22Segment Reporting

The Company's operating businesses are organised and managed separately according to the nature of products provided, with each segment representing a strategic business unit that offers different products and serves different markets. The analysis of geographical segment is based on the geographical location of the customers.

The company prepares its segment information in confirmity with the accounting policies adopted for preparing and presenting the financial statements of the company as a whole.

1.23 General

Accounting policies not specifically referred to are consistent with generally accepted accounting policies.


Mar 31, 2014

Corporate Information

Real Strips Limited (the Company) is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. The Company is engaged in manufacturing/trading of Cold Rolled Stainless Strips/coils. Its shares are listed on Bombay Stock Exchange in India.

1.01 Basis of Preparation of Financial Statements:

The Financial Statements are prepared to comply in all material respects with the Accounting Standards notified by the Companies (Accounting Standards) Rules, 2006 and the relevant provisions of the Companies Act, 1956 . The financial statements have been prepared under the historical cost convention on an accrual basis in accordance with the generally accepted accounting principles in India.

1.02 Use of Estimates

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

1.03 Tangible Assets

a) Fixed assets are stated at cost of acquisition or construction less accumulated depreciation. The cost of fixed assets includes non refundable taxes, duties, freight and other incidental expenses related to the acquisition and installation of the respective assets.

b) All the preoperative expenditure including interest on borrowing for the project/item, incurred on capital work in progress or on fixed assets upto the date of installation of the individual item as taken by the company is capitalized and added on pro-rata basis to the cost of respective fixed Assets.

1.04 Intangible Assets

An intangible asset is recognised, only where it is probable that future economic benefits attributable to the asset will accrue to the enterprise and the cost can be measured reliably.

1.05 Borrowing Costs

Borrowing Costs that are directly attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. Exchange difference arising from foreign currency term loan borrowing beyond adjustment to interest cost is capitalized as part of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue.

1.06 Impairment of Assets

a) The Company assesses at each Balance Sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the assets. If such recoverable amount of the assets is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the statement of profit and loss. If at the Balance Sheet date there is an indication that if a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of depreciated historical cost.

b) After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.

1.07 Provisions, Contingent Liabilities and Contingent Assets

A provision is recognised 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 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.

Contingent Liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the financial statements.

1.08 Leases

Where the Company is the lessee

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item, are classified as operating leases. Operating lease payments are recognized as a Capital assets till the assets are not put to use.

1.09 Deferred Revenue Expenses And Public Issue Expenses

Public Issue Expenses and Preliminary expenses are amortized over a period of 5 years.

1.10 Depreciation

The company provides depreciation on Straight Line method on (a) Plant and Machinery and (b) Vehicles, whereas on (a) Building (b) Furniture and Fixtures and (c) computer, depreciation is provided on Written Down Value Method, at the rates and manner specified in Schedule XIV of the Companies Act, 1956, on the basis of shift wise working as determined by the company.

1.11 Inventories

Raw materials, Work in Progress and finished goods are valued at lower of cost or net realisable value. Stores & spare parts are stated at cost. Cost comprise all cost of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and condition. Cost formulae used is ''First-in-First-Out method''.

1.12 Revenue Recognition

a) Revenue from operations (gross) represents the amounts receivable for goods and services sold including excise duty thereon and forfeiture of sales advances, but excludes VAT/CST, trade discounts & other taxes, adjustments for late delivery charges and material returned/rejected.

b) Interest income is recognized on time proportion basis taking into account the amounts outstanding and the rates applicable.

c) Dividend is recognized when the Company''s right to receive dividend is established by the balance sheet date.

d) Revenue from windmill is recognised on unit generation basis.

1.13 Raw Material Consumption

Raw Material Consumed includes interest expenses for late payment to suppliers.

1.14 Excise/Custom Duties

Excise Duty on manufactured goods remaining in the inventory is included as a part of valuation of finished goods. The customs duty on raw materials, stores, spares & components is accounted on clearance thereof.

1.15 Foreign Currency Transactions

a) Foreign currency transaction are accounted at the exchange rate prevailing on the date of transaction. Monetary items related to foreign currency transaction remaining unsettled at the end of the year are translated at year end rates. Any exchange gain or loss arising out of the subsequent fluctuation are accounted for in the Statement of Profit and Loss.

b) In respect of forward contracts assigned to the foreign currency assets/liabilities as at Balance Sheet date, the proportionate premium/discount for the period up to the date of Balance sheet is recognized in the Statement of Profit and Loss. The exchange difference measured by the exchange rate between the inception of the forward contract and agreed contracted rate is applied on foreign currency amount of the forward contract.

1.16 Treatment Of Retirement Benefits

Company contributes to group gratuity policy with SBI Life Insurance as per actuarial valuation as on the Balance Sheet date for future payment of Gratuity to employees. Company''s contributions paid/payable during the year to Provident Fund are charged to the Statement of Profit & Loss. Privilege leave is accounted for on accrual basis.

1.17 Taxation

Income-tax expense comprises current tax and deferred tax charge or credit. Tax on income for the current period is determined on financial year basis computed in accordance with the provisions of the Income Tax Act,1961 and based on expected outcome of assessment/appeal.

Minimum Alternative Tax (MAT) paid in accordance to the tax laws, which gives rise to the future economic benefits in the form of adjustment of future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax after the tax holiday period . Accordingly, MAT is recognised as an asset as MAT Credit Entitlement in the balance sheet when it is probable that the future economic benefit associated with it will flow to the Company and the asset can be measured reliably.

1.18 Deferred Taxation

The deferred tax charge or credit is recognised using the tax rates that have been enacted or substantially enacted by the balance sheet date. Where there is unabsorbed depreciation or carry forward losses, deferred tax assets are recognised only if there is virtual certanity of realisation of such assets. Other deferred tax assets are recognised only to the extent there is reasonable certanity of realisation in future. Deferred tax assets/liabilities are reviewed as at each Balance Sheet date based on development during the year and available case laws, to reassess realisation/liabilities.

1.19 Investment

Investments are stated at cost. Dimunition in the value, if any, which is of permanent nature is provided for.

1.20 Cash and Cash Equivalents

Cash and cash equivalents for the purposes of cash flow statement comprise cash at bank and in hand and short-term investments with an original maturity of three months or less.

1.21 Cash Flow Statement

Cash flow statement is prepared using the indirect method, whereby profit before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flow from operating, investing and financing activities of the Company are segregated based on the available information.

1.22 General

Accounting policies not specifically referred to are consistent with generally accepted accounting policies.


Mar 31, 2012

1.01 Basis of Preparation of Financial Statements

The Financial Statements are prepared to comply in all material respects with the Accounting Standards notified by the Companies (Accounting Standards) Rules, 2006 and the relevant provisions of the Companies Act, 1956 . The financial statements have been prepared under the historical cost convention on an accrual basis in accordance with the generally accepted accounting principles in India.

1.02 Use of Estimates

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

1.03 Tangible Assets :

i. The Gross Block of fixed assets are shown at cost which includes taxes, duties and preoperative expenses. Cost of Fixed Assets has been reduced to the extent of Excise Duty under Capital Cenvat Scheme, Service Tax & VAT where such credit is availed.

ii. Capital work in progress is shown at cost and includes Capital Goods in Transit.

iii. All the preoperative expenditure including interest on borrowing for the project/ item, incurred on capital work in progress or on fixed assets upto the date of installation of the individual item as taken by the company is capitalized and added on pro- rata basis to the cost of respective fixed Assets.

1.04 Intangible Assets:

An intangible asset is recognised, only where it is probable that future economic benefits attributable to the asset will accrue to the enterprise and the cost can be measured reliably.

1.05 Borrowing Costs:

Borrowing Costs that are directly attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. Exchange difference arising from foreign currency term loan borrowing beyond adjustment to interest cost is capitalized as part of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue.

1.06 Impairment of Assets:

a The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal/external factors. On such indication, the recoverable amount of the assets is estimated and if such estimation is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The recoverable amount is the greater of the asset's net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and risks specific to the asset.

b After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.

1.07 Provisions, Contingent Liabilities and Contingent Assets:

A provision is recognised when the Company has a present obligation as a result of past event; 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. 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.

Contingent Liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the financial statements.

1.08 Leases:

Where the Company is the lessee

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item, are classified as operating leases. Operating lease payments are recognized as a Capital assets till the assets are not put to use.

1.09 Deferred Revenue Expenses And Public Issue Expenses:

Public Issue Expenses and Preliminary expenses are amortized over a period of 5 years.

1.10 Depreciation:

The company provides depreciation on Straight Line method on (a) Plant and Machinery and (b) Vehicles, whereas on (a) Building

(b) Furniture and Fixtures and (c) computer, depreciation is provided on Written Down Value Method, at the rates and manner specified in Schedule XIV of the Companies Act, 1956.

1.11 Inventories:

Raw materials, Work in Progress and finished goods are valued at lower of cost or net realisable value. Stores & spare parts are stated at cost. Cost comprise all cost of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and condition. Cost formulae used is 'First-in-First-Out method

1.12 Sales:

Sales includes sales value of goods, Excise duty but excludes VAT/CST, trade discount & other taxes and material returned/rejected and the Operational income includes job charges income.

1.13 Raw Material Consumption :

Raw Material Consumed includes interest expenses for late payment to suppliers.

1.14 Excise / Custom Duties:

Excise Duty on manufactured goods remaining in the inventory is included as a part of valuation of finished goods. The customs duty on raw materials, stores, spares & components is accounted on clearance thereof.

1.15 Foreign Currency Transactions :

(a) Foreign currency transaction are accounted at the exchange rate prevailing on the date of transaction. Monetary items related to foreign currency transaction remaining unsettled at the end of the year are translated at year end rates. Any exchange gain or loss arising out of the subsequent fluctuation are accounted for in the Profit and Loss Account.

(b) In respect of forward contracts assigned to the foreign currency assets/liabilities as at Balance Sheet date, the proportionate premium/discount for the period up to the date of Balance sheet is recognized in the Profit and Loss account. The exchange difference measured by the exchange rate between the inception of the forward contract and date of balance sheet is applied on foreign currency amount of the forward contract.

1.16 Treatment Of Retirement Benefits :

Company contributes to group gratuity policy with SBI Life Insurance as per actuarial valuation as on the Balance Sheet date for future payment of Gratuity to employees. Company's contributions paid/payable during the year to Provident Fund are charged to the Profit & Loss Account. Privilege leave is accounted for accrual basis.

1.17 Taxation:

Income-tax expense comprises current tax and deferred tax charge or credit. Tax on income for the current period is determined on financial year basis computed in accordance with the provisions of the Income Tax Act,1961 and based on expected outcome of assessment/appeal.

Minimum Alternative Tax (MAT) paid in accordance to the tax laws, which gives rise to the future economic benefits in the form of adjustment of future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax after the tax holiday period. Accordingly, MAT is recognised as an asset as MAT Credit Entitlement in the balance sheet when it is probable that the future economic benefit associated with it will flow to the Company and the asset can be measured reliably.

1.18 Deferred Taxation:

The deferred tax charge or credit is recognised using current tax rates. Where there is unabsorbed depreciation or carry forward losses, deferred tax assets are recognised only if there is virtual certainty of realisation of such assets. Other deferred tax assets are recognised only to the extent there is reasonable certainty of realisation in future. Deferred tax assets/ liabilities are reviewed as at each Balance Sheet date based on development during the year and available case laws, to reassess realisation/liabilities.

1.19 Investment:

Investments are stated at cost. Diminution in the value, if any, which is of permanent nature is provided for.


Mar 31, 2010

A. : ACCOUNTING CONVENTION :

The Financial Statements are prepared under historical cost convention on accrual basis in accordance with the generally accepted accounting principles in India and the provisions of the Companies Act, 1956 as adopted consistently by the company.

B. : USE OF ESTIMATES :

The preparation of financial statements in confirmity with generally accepted accounting principles requires managements to make estimates and assumptions that affect the reported amounts of assets & liabilities and disclosures of contingent liabilities at the date of financial statements and the results of operation during the reporting period. Although these estimates are based upon managements best knowledge of current events and actions, actual results could differ from these estimates.

C. : FIXED ASSETS :

i. The Gross Block of fixed assets are shown at cost which includes taxes, duties and preoperative expenses.Cost of Fixed Assets has been reduced to the extent of Excise Duty under Capital Cenvat Scheme, Service Tax & VAT where such credit is availed.

ii. Capital work in progress is shown at cost and includes the amount of capital work in progress,advances for capital goods.

iii. All the preoperative expenditure including interest on borrowing for the project/ item, incurred on capital work in progress or on fixed assets upto the date of installation of the individual item as taken by the company is capitalized and added on pro-rata basis to the cost of respective fixed Assets.

D. : DEPRECIATION:

The company provides depreciation on Straight Line method on (a) Plant and Machinery and (b) Vehicles, whereas on (a) Building (b) Furniture and Fixtures and (c) computer, depreciation is provided on Written Down Value Method,at the rates and manner specified in Schedule XIV of the Companies Act, 1956.

E. : INVENTORIES :

Raw materials,Work in Progress and finished goods are valued at lower of cost or net realisable value.Stores & spare parts are stated at cost. Cost comprise all cost of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and condition. Cost formulae used is First-in-First-Out method .

F. : SALES :

Sales includes sales value of goods, Excise duty but excludes VAT/CST, trade discount & other taxes and material returned/ rejected and the Operational income includes job charges income.

G. : RAW MATERIAL CONSUMPTION :

Raw Material Consumed includes interest expenses for late payment to suppliers. H. : EXCISE / CUSTOM DUTIES:

Excise Duty on manufactured goods remaining in the inventory is included as a part of valuation of finished goods. The customs

duty on raw materials, stores, spares & components is accounted on clearance thereof. I. : FOREIGN CURRENCY TRANSACTIONS :

(a) Foreign currency transaction are accounted at the exchange rate prevailing on the date of transaction. Monetary items related to foreign currency transaction remaining unsettled at the end of the year are translated at year end rates. Any exchange gain or loss arising out of the subsequent fluctuation are accounted for in the Profit and Loss Account.

(b) In respect of forward contracts assigned to the foreign currency assets/liabilities as at Balance Sheet date, the proportionate premium/discount for the period up to the date of Balance sheet is recognized in the Profit and Loss account. The exchange difference measured by the exchange rate between the inception of the forward contract and date of balance sheet is applied on foreign currency amount of the forward contract.

J. : TREATMENT OF RETIREMENT BENEFITS :

Company contributes to group gratuity policy with Life Insurance Corporation of India as per actuarial valuation as on the Balance Sheet date for future payment of Gratuity to employees. Companys contributions paid/payable during the year to Provident Fund are charged to the Profit & Loss Account.Privilege leave is accounted for accrual basis.

K . : DEFERRED REVENUE EXPENSES AND PUBLIC ISSUE EXPENSES :

Public Issue Expenses and Preliminary expenses are amortized over a period of 5 years.

L. : BORROWING COSTS:

Borrowing Costs that are directly attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. Exchange difference arising from foreign currency term loan borrowing beyond adjustment to interest cost is capitalized as part of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue.

M. : TAXATION:

Income-tax expense comprises current tax and deferred tax charge or credit. Tax on income for the current period is determined on financial year basis computed in accordance with the provisions of the Income Tax Act,1961 and based on expected outcome of assessment/appeal.

N. : DEFERRED TAXATION:

The deferred tax charge or credit is recognised using current tax rates. Where there is unabsorbed depreciation or carry forward losses, deferred tax assets are recognised only if there is virtual certanity of realisation of such assets. Other deferred tax assets are recognised only to the extent there is reasonable certanity of realisation in future. Deferred tax assets/ liabilities are reviewed as at each Balance Sheet date based on development during the year and available case laws, to reassess realisation/liabilities.

O. : INVESTMENT:

Investments are stated at cost. Dimunition in the value, if any, which is of permanent nature is provided for.

P. : IMPAIRMENT OF ASSETS:

The Company assesses at each Balance Sheet date whether there is any indication that an asset may be impaired. If any such indication exists,the Company estimates the recoverable amount of the assets. If such recoverable amount of the assets is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the Profit and Loss account. If at the Balance Sheet date there is an indication that if a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of depreciated historical cost.

Q. : PROVISION AND CONTINGENT LIABILITIES :

(a) Provisions are recognized when the present obligation of a past event gives rise to a probable outflow, embodying economic benefits on settlement, and the amount of obligation can be reliably estimated.

(b) Contingent Liabilities are disclosed after a careful evaluation of facts and legal aspects of the matter involved.

(c) Provisions and Contingent Liabilities are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. R. : Accounting policies not specifically referred to are consistent with generally accepted accounting practices.



 
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