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Accounting Policies of Remsons Industries Ltd. Company

Mar 31, 2015

I) BASIS OF ACCOUNTING :

The financial statements have been prepared under the historical cost convention, except where impairment is made and on accrual basis in accordance with accounting principles generally accepted in India and the provisions of the Companies Act, 1956,read with Circular 15/2013 dated 13th September, 2013, and 8/2014 dated 4th april 2014 issued by the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013. Accounting policies have been consistently applied by the Company and are consistent with those used in the previous year.

ii) USE OF ESTIMATES :

The preparation of financial statements in conformity with the generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts of the assets and liabilities on the date of financial statements and the reported amounts of revenue and expenses during the reported period. Differences between actual results and estimates are recognized in the period in which the results get materialized.

iii) TANGIBLE ASSETS AND DEPRECIATION:

a. Fixed Assets: All fixed assets are valued at cost less cenvat & accumulated depreciation and impairments if any, (other than freehold land where no depreciation is charged) except that certain assets revalued are adjusted for revaluation.

b. Capital-work-in-progress is carried at cost less cenvat, comprising direct cost, related incidental expenses and attributable interest.

c. Depreciation: Depreciation has been charged on straight line method on Buildings, Plants and Machineries, Electric Installations and Dies& Mould, all other assets on written down value method at the rate and manner prescribed in Schedule II of the Companies Act, 2013.

d. Depreciation on the increased cost of fixed assets due to revaluation is charged to profit & loss account.

e. Depreciation on Leasehold Improvements is charged over the period of lease.

f. All assets costing up to Rs. 5000/- are fully depreciated in the year of purchase.

iv) INTANGIBLES /AMORTIZATIONS:

Intangible assets are recognized if it is probable that the future economic benefits attributable to the asset will flow to the enterprise and cost of the asset can be measured reliably in accordance with AS - 26 on Intangible assets.

Intangible assets are amortized on straight line basis over the useful lives determined on the basis of expected future economic benefits. The amortization period and method would be reviewed at the end of each financial year. Software's are amortized over a period of 36 Months.

iv) IMPAIRMENT OF ASSETS:

At the end of each reporting period, the Company determines whether a provision should be made for impairment loss on assets by considering the indications that an impairment loss may have occurred in accordance with Accounting Standard 28 on "Impairment ofAssets".An impairment loss is charged to the Profit and Loss account in the period in which, an asset is identified as impaired, when the carrying value of the asset exceeds its recoverable value. The impairment loss recognised in the earlier accounting periods is reversed, if there has been a change in the estimate of recoverable amount.

vi) INVESTMENTS:

Long term investments are stated at cost less other than temporary diminution in value if any. Current investments are stated at lower of cost and quoted/ fair value.

vii) INVENTORIES:

Raw materials, Packing materials, Stores and Spare parts are valued at Lower of cost (cost includes direct cost & attributable overheads) and net realizable value. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. (FIFO Method) Semi finished goods are valued at lower of estimated cost and net realizable value & Finished goods are valued at lower of, cost or net realizable value (FIFO) also includes excise duty. Scrap is valued at net realizable value.

viii) ACCOUNTING OF CLAIMS :

a. Claims receivable are accounted for at the time when reasonable certainty of receipt is established. Claims payable are accounted for at the time of acceptance.

b. Claims raised by Government Authorities regarding taxes and duties, are accounted based on the merits of each claim. If same is disputed by the Company, these are shown as 'Contingent Liabilities'.

ix) PROVISIONS/ CONTINGENCIES:

A provision is recognized when an enterprise has a present obligation as a result of past event; it is probable that an outflow of resources embodying economic benefit 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. A contingent liability is disclosed, unless the possibility of an outflow of resources embodying the economic benefit is remote.

x) REVENUE RECOGNITION:

Sale of goods is recognized when the risk and rewards of ownership are passed on to the customers, which is generally on dispatch of goods. Export sales are accounted on the basis of date of Bill of Lading/Airway Bill. Conversion Charges Income is recognized as per the terms of contract with customers when the related services are rendered. DEPB/Duty draw back income recognized as and when export gets completed.

xi) DIVIDEND & INTEREST:

Dividend income on investments is accounted for when the right to receive the payment is established. Interest income is recognized on accrual basis.

xii) FOREIGN EXCHANGE TRANSACTIONS:

Transactions in foreign currencies are accounted at the exchange rate prevailing on the date of transaction. Gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies, are recognized in the profit and loss account. In case of forward contracts (non speculative), the premium / discount are dealt with in the profit and loss account over the period of contracts.

xiii) OPERATING LEASE:

The leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased items, are classified as operating leases. Operating lease payments are recognised as expenses in the Profit and Loss Account.

xiv) RESEARCH AND DEVELOPMENT EXPENDITURE :

Revenue expenditure on Research and Development is charged against the profit of the year, in which it is incurred.

xv) EXCISE AND IMPORT DUTY:

a. Excise duty in respect of goods manufactured by the Company is accounted on completion of manufacturing of goods.

b. Import duty payable is accounted as and when the goods enter the territory waters of the country.

xvi) EMPLOYEE BENEFITS:

a. Short Term Employee Benefits - All employee benefits payable within twelve months of rendering the service are recognized in the period in which the employee renders the related service.

b. Post Employment/Retirement Benefits - Defined Contribution Plans such as Provident Fund etc. are charged to the Profit and Loss Account as incurred. Defined Benefit Obligation Plans - The present value of the obligation under such plans is determined based on an actuarial valuation, using the Projected Unit Credit Method. Actuarial gains and losses arising on such valuation are recognized immediately in the Profit and Loss Account. In case of gratuity, which is funded with the Life Insurance Corporation of India, the fair value of the plan assets is reduced from the gross obligation under the defined benefit plans, to recognize the obligation on net basis.

c. Other Long Term Employee Benefits are recognized in the same manner as Defined Benefit Plans.

xvii) TAXATION:

Provision for Income Tax, comprising of current tax and deferred tax, is made on the basis of the results of the year. In accordance with Accounting Standard 22-Accounting for Taxes on Income, Deferred tax resulting from timing difference between the book profits and the tax profits for the year is accounted for using the tax rate and laws that have been enacted or substantively enacted as of the balance sheet date. The Deferred tax assets are recognized & carried forward only to the extent that there is a reasonable certainty of its realization.

xviii) BORROWING COST:

Borrowing cost which is directly related to the acquisition, construction or production of qualifying assets are capitalized in accordance withAS-16 Borrowing Cost. All other borrowing cost charged to profit & loss statement.

xix) EXPENDITURE DURING CONSTRUCTION PERIOD:

In case of new projects and substantial expansion of existing factories, expenditure incurred including trial production expenses net of revenue earned, prior to commencement of commercial production are capitalized.

xx) SEGMENT REPORTING POLICIES:

Primary Segment is identified based on the nature of products and services, the different risks and returns and the internal business reporting system. Secondary segment is identified based on geographical area in which major operating divisions of the Company operate.

xxi) PROVISION FOR BAD & DOUBTFUL DEBTS:

Provision is made in accounts for bad & doubtful debts which in the opinion of the Management are considered doubtful.

xxii) CASH AND CASH EQUIVALENTS :

Cash and cash equivalents comprise cash at bank, in hand (including cheque in hand) and short term investment with an original maturity of three months or less.

xxiii) EARNING PER SHARE

Basic earning per share is calculated by dividing the net profit or loss for the year attributable to equity share holders by the weighted average number of equity shares outstanding during the year. For the purpose of calculating diluted earning per share, the net profit or loss for the year attributable to equity share holders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.


Mar 31, 2014

I) BASIS OF ACCOUNTING :

The financial statements have been prepared under the historical cost convention, except where impairment is made and on accrual basis in accordance with accounting principles generally accepted in India and the provisions of the Companies Act, 1956,read with Circular 15/2013 dated 13th September, 2013, issued by the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013. Accounting policies have been consistently applied by the Company and are consistent with those used in the previous year.

ii) USE OF ESTIMATES :

The preparation of financial statements in conformity with the generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts of the assets and liabilities on the date of financial statements and the reported amounts of revenue and expenses during the reported period. Differences between actual results and estimates are recognized in the period in which the results get materialized.

iii) TANGIBLE ASSETS AND DEPRECIATION :

a. Fixed Assets: All fixed assets are valued at cost less cenvat & accumulated depreciation and impairments if any, (other than freehold land where no depreciation is charged) except that certain assets revalued are adjusted for revaluation.

b. Capital-work-in-progress is carried at cost less cenvat, comprising direct cost, related incidental expenses and attributable interest.

c. Depreciation: Depreciation has been charged on straight line method on Buildings, Plants and Machineries, Electric Installations and Dies& Mould, all other assets on written down value method at the rate and manner prescribed in Schedule XTV of the Companies Act, 1956.

d. Depreciation on the increased cost of fixed assets due to revaluation is charged to profit & loss account.

e. Depreciation on Leasehold Improvements is charged over the period of lease.

f. All assets costing up to Rs. 5000/- are fully depreciated in the year of purchase.

iv) INTANGIBLES/AMORTIZATIONS:

Intangible assets are recognized if it is probable that the future economic benefits attributable to the asset will flow to the enterprise and cost of the asset can be measured reliably in accordance with AS - 26 on Intangible assets.

Intangible assets are amortized on straight line basis over the useful lives determined on the basis of expected future economic benefits. The amortization period and method would be reviewed at the end of each financial year. Software''s are amortized over a period of 36 Months.

v) IMPAIRMENT OF ASSETS :

At the end of each reporting period, the Company determines whether a provision should be made for impairment loss on assets by considering the indications that an impairment loss may have occurred in accordance with Accounting Standard 28 on "Impairment of Assets". An impairment loss is charged to the Profit and Loss account in the period in which, an asset is identified as impaired, when the carrying value of the asset exceeds its recoverable value. The impairment loss recognised in the earlier accounting periods is reversed, if there has been a change in the estimate of recoverable amount.

vi) INVESTMENTS:

Long term investments are stated at cost less other than temporary diminution in value if any. Current investments are stated at lower of cost and quoted/ fair value.

vii) INVENTORIES:

Raw materials, Packing materials, Stores and Spare parts are valued at Lower of cost (cost includes direct cost & attributable overheads) and net realizable value. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. (FIFO Method) Semi finished goods are valued at lower of estimated cost and net realizable value & Finished goods are valued at lower of, cost or net realizable value (FIFO) also includes excise duty. Scrap is valued at net realizable value.

viii) ACCOUNTING OF CLAIMS :

a. Claims receivable are accounted for at the time when reasonable certainty of receipt is established. Claims payable are accounted for at the time of acceptance.

b. Claims raised by Government Authorities regarding taxes and duties, are accounted based on the merits of each claim. If same is disputed by the Company, these are shown as ''Contingent Liabilities".

ix) PROVISIONS/ CONTINGENCIES :

A provision is recognized when an enterprise has a present obligation as a result of past event; it is probable that an outflow of resources embodying economic benefit 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. A contingent liability is disclosed, unless the possibility of an outflow of resources embodying the economic benefit is remote.

x) REVENUE RECOGNITION:

Sale of goods is recognized when the risk and rewards of ownership are passed on to the customers, which is generally on dispatch of goods. Export sales are accounted on the basis of date of Bill of Lading/Airway Bill. Conversion Charges Income is recognized as per the terms of contract with customers when the related services are rendered. DEPB/Duty draw back income recognized as and when export gets completed.

xi) DIVIDEND & INTEREST:

Dividend income on investments is accounted for when the right to receive the payment is established. Interest income is recognized on accrual basis.

xii) FOREIGN EXCHANGE TRANSACTIONS:

Transactions in foreign currencies are accounted at the exchange rate prevailing on the date of transaction. Gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies, are recognized in the profit and loss account. In case of forward contracts (non speculative), the premium / discount are dealt with in the profit and loss account over the period of contracts.

xiii) OPERATING LEASE:

The leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased items, are classified as operating leases. Operating lease payments are recognised as expenses in the Profit and Loss Account.

xiv) RESEARCH AND DEVELOPMENT EXPENDITURE:

Revenue expenditure on Research and Development is charged against the profit of the year, in which it is incurred.

xv) EXCISE AND IMPORT DUTY:

a. Excise duty in respect of goods manufactured by the Company is accounted on completion of manufacturing of goods.

b. Import duty payable is accounted as and when the goods enter the territory waters of the country.

xvi) EMPLOYEE BENEFITS:

a. Short Term Employee Benefits - All employee benefits payable within twelve months of rendering the service are recognized in the period in which the employee renders the related service.

b. Post Employment/Retirement Benefits - Defined Contribution Plans such as Provident Fund etc. are charged to the Profit and Loss Account as incurred. Defined Benefit Obligation Plans - The present value of the obligation under such plans is determined based on an actuarial valuation, using the Projected Unit Credit Method. Actuarial gains and losses arising on such valuation are recognized immediately in the Profit and Loss Account. In case of gratuity, which is funded with the Life Insurance Corporation of India, the fair value of the plan assets is reduced from the gross obligation under the defined benefit plans, to recognize the obligation on net basis.

c. Other Long Term Employee Benefits are recognized in the same manner as Defined Benefit Plans.

xvii) TAXATION:

Provision for Income Tax, comprising of current tax and deferred tax, is made on the basis of the results of the year. In accordance with Accounting Standard 22- Accounting for Taxes on Income, Deferred tax resulting from timing difference between the book profits and the tax profits for the year is accounted for using the tax rate and laws that have been enacted or substantively enacted as of the balance sheet date. The Deferred tax assets are recognized & carried forward only to the extent that there is a reasonable certainty of its realization.

xviii) BORROWING COST :

Borrowing cost which is directly related to the acquisition, construction or production of qualifying assets are capitalized in accordance with AS-16 Borrowing Cost. All other borrowing cost charged to profit & loss statement.

xix) EXPENDITURE DURING CONSTRUCTION PERIOD :

In case of new projects and substantial expansion of existing factories, expenditure incurred including trial production expenses net of revenue earned, prior to commencement of commercial production are capitalized.

xx) SEGMENT REPORTING POLICIES:

Primary Segment is identified based on the nature of products and services, the different risks and returns and the internal business reporting system. Secondary segment is identified based on geographical area in which major operating divisions of the Company operate.

xxi) PROVISION FOR BAD & DOUBTFUL DEBTS :

Provision is made in accounts for bad & doubtful debts which in the opinion of the Management are considered doubtful.

xxii) CASH AND CASH EQUIVALENTS :

Cash and cash equivalents comprise cash at bank, in hand (including cheque in hand) and short term investment with an original maturity of three months or less.

xxih) EARNING PER SHARE

Basic earning per share is calculated by dividing the net profit or loss for the year attributable to equity share holders by the weighted average number of equity shares outstanding during the year. For the purpose of calculating diluted earning per share, the net profit or loss for the year attributable to equity share holders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.


Mar 31, 2013

I) BASIS OF ACCOUNTING :

The financial statements have been prepared under the historical cost convention, except where impairment is made and on accrual basis in accordance with accounting principles generally accepted in India and the provisions of the Companies Act, 1956. Accounting policies have been consistently applied by the Company and are consistent with those used in the previous year.

ii) USE OF ESTIMATES :

The preparation of financial statements in conformity with the generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts of the assets and liabilities on the date of financial statements and the reported amounts of revenue and expenses during the reported period. Differences between actual results and estimates are recognized in the period in which the results get materialized.

iii) TANGIBLE ASSETS AND DEPRECIATION :

a. Fixed Assets: All fixed assets are valued at cost less cenvat & accumulated depreciation and impairments if any, (other than freehold land where no depreciation is charged) except that certain assets revalued are adjusted for revaluation.

b. Capital-work-in-progress is carried at cost less cenvat, comprising direct cost, related incidental expenses and attributable interest.

c. Depreciation: Depreciation has been charged on straight line method on Buildings, Plants and Machineries, Electric Installations and Dies& Mould, all other assets on written down value method at the rate and manner prescribed in Schedule XIV of the Companies Act, 1956.

d. Depreciation on the increased cost of fixed assets due to revaluation is charged to profit & loss account.

e. Depreciation on Leasehold Improvements is charged over the period of lease.

f. All assets costing up to Rs. 5000/- are fully depreciated in the year of purchase.

iv) INTANGIBLES / AMORTIZATIONS :

Intangible assets are recognized if it is probable that the future economic benefits attributable to the asset will flow to the enterprise and cost of the asset can be measured reliably in accordance with AS - 26 on Intangible assets.

Intangible assets are amortized on straight line basis over the useful lives determined on the basis of expected future economic benefits. The amortization period and method would be reviewed at the end of each financial year. Software''s are amortized over a period of 36 Months.

iv) IMPAIRMENT OF ASSETS :

At the end of each reporting period, the Company determines whether a provision should be made for impairment loss on assets by considering the indications that an impairment loss may have occurred in accordance with Accounting Standard 28 on "Impairment of Assets". An impairment loss is charged to the Profit and Loss account in the period in which, an asset is identified as impaired, when the carrying value of the asset exceeds its recoverable value. The impairment loss recognised in the earlier accounting periods is reversed, if there has been a change in the estimate of recoverable amount.

vi) INVESTMENTS :

Long term investments are stated at cost less other than temporary diminution in value if any. Current investments are stated at lower of cost and quoted/ fair value.

vii) INVENTORIES :

Raw materials, Packing materials, Stores and Spare parts are valued at Lower of cost (cost includes direct cost & attributable overheads) and net realizable value. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. (FIFO Method) Semi finished goods are valued at lower of estimated cost and net realizable value & Finished goods are valued at lower of, cost or net realizable value (FIFO) also includes excise duty. Scrap is valued at net realizable value.

viii) ACCOUNTING OF CLAIMS :

a. Claims receivable are accounted for at the time when reasonable certainty of receipt is established. Claims payable are accounted for at the time of acceptance.

b. Claims raised by Government Authorities regarding taxes and duties, are accounted based on the merits of each claim. If same is disputed by the Company, these are shown as ‘Contingent Liabilities''.

ix) PROVISIONS/ CONTINGENCIES :

A provision is recognized when an enterprise has a present obligation as a result of past event; it is probable that an outflow of resources embodying economic benefit 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. A contingent liability is disclosed, unless the possibility of an outflow of resources embodying the economic benefit is remote.

x) REVENUE RECOGNITION :

Sale of goods is recognized when the risk and rewards of ownership are passed on to the customers, which is generally on dispatch of goods. Export sales are accounted on the basis of date of Bill of Lading/Airway Bill. Conversion Charges Income is recognized as per the terms of contract with customers when the related services are rendered. DEPB/Duty draw back income recognized as and when export gets completed.

xi) DIVIDEND & INTEREST :

Dividend income on investments is accounted for when the right to receive the payment is established. Interest income is recognized on accrual basis.

xii) FOREIGN EXCHANGE TRANSACTIONS :

Transactions in foreign currencies are accounted at the exchange rate prevailing on the date of transaction. Gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies, are recognized in the profit and loss account. In case of forward contracts (non speculative), the premium / discount are dealt with in the profit and loss account over the period of contracts.

xiii) OPERATING LEASE :

The leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased items, are classified as operating leases. Operating lease payments are recognised as expenses in the Profit and Loss Account.

xiv) RESEARCH AND DEVELOPMENT EXPENDITURE :

Revenue expenditure on Research and Development is charged against the profit of the year, in which it is incurred.

xv) EXCISE AND IMPORT DUTY :

a. Excise duty in respect of goods manufactured by the Company is accounted on completion of manufacturing of goods.

b. Import duty payable is accounted as and when the goods enter the territory waters of the country.

xvi) EMPLOYEE BENEFITS :

a. Short Term Employee Benefits - All employee benefits payable within twelve months of rendering the service are recognized in the period in which the employee renders the related service.

b. Post Employment/Retirement Benefits - Defined Contribution Plans such as Provident Fund etc. are charged to the Profit and Loss Account as incurred. Defined Benefit Obligation Plans - The present value of the obligation under such plans is determined based on an actuarial valuation, using the Projected Unit Credit Method. Actuarial gains and losses arising on such valuation are recognized immediately in the Profit and Loss Account. In case of gratuity, which is funded with the Life Insurance Corporation of India, the fair value of the plan assets is reduced from the gross obligation under the defined benefit plans, to recognize the obligation on net basis.

c. Other Long Term Employee Benefits are recognized in the same manner as Defined Benefit Plans.

xvii) TAXATION :

Provision for Income Tax, comprising of current tax and deferred tax, is made on the basis of the results of the year. In accordance with Accounting Standard 22- Accounting for Taxes on Income, Deferred tax resulting from timing difference between the book profits and the tax profits for the year is accounted for using the tax rate and laws that have been enacted or substantively enacted as of the balance sheet date. The Deferred tax assets are recognized & carried forward only to the extent that there is a reasonable certainty of its realization.

xviii) BORROWING COST :

Borrowing cost which is directly related to the acquisition, construction or production of qualifying assets are capitalized in accordance with AS-16 Borrowing Cost . All other borrowing cost charged to profit & loss statement.

xix) EXPENDITURE DURING CONSTRUCTION PERIOD :

In case of new projects and substantial expansion of existing factories, expenditure incurred including trial production expenses net of revenue earned, prior to commencement of commercial production are capitalized.

xx) SEGMENT REPORTING POLICIES :

Primary Segment is identified based on the nature of products and services, the different risks and returns and the internal business reporting system. Secondary segment is identified based on geographical area in which major operating divisions of the Company operate.

xxi) PROVISION FOR BAD & DOUBTFUL DEBTS :

Provision is made in accounts for bad & doubtful debts which in the opinion of the Management are considered doubtful.

xxii) CASH AND CASH EQUIVALENTS :

Cash and cash equivalents comprise cash at bank, in hand (including cheque in hand) and short term investment with an original maturity of three months or less.

xxiii) EARNING PER SHARE

Basic earning per share is calculated by dividing the net profit or loss for the year attributable to equity share holders by the weighted average number of equity shares outstanding during the year. For the purpose of calculating diluted earning per share, the net profit or loss for the year attributable to equity share holders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.


Mar 31, 2010

I) Basis of Accounting - The financial statements have been prepared in accordance with the historical cost convention except so far as they relate to the revaluation of certain fixed assets. Revenue/income and costs/ expenditures,which are material in nature, are accounted for on accrual basis as they are earned or incurred. The said financial statements have been prepared to comply in all material aspects in respect with the Notified Accounting Standard by Companies Accounting Standard Rules, 2006 and the relevent provisions of the Companies Act, 1956.

ii) Use of Estimates - The preparation of financial statements in confirmity with the generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts of the assets and liabilities on the date of financial statements and the reported amounts of revenue and expenses during the reported period. Differences between actual results and estimates are recognized in the period in which the results get materialized.

iii) Fixed Assets and Depreciation

a) Fixed Assets :- All fixed assets are valued at cost less accumulated depreciation (other than freehold land where no depreciation is charged) except that certain assets revalued are adjusted for revaluation.

b) Capital-work-in-progress are carried at cost, comprising direct cost, related incidental expenses and attributable interest.

c) Depreciation :- Depreciation has been charged on straight line method on Buildings, Plants and Machineries, Electric Installations and Dies & Moulds, all other assets on written down value method at the rate and manner prescribed in Schedule XIV of the Companies Act,1956.

d) Depreciation on the increased cost of fixed assets due to revaluation is charged to profit & loss account.

e) Depreciation on Leasehold Improvements is charged over the period of lease.

f) All assets costing upto Rs. 5000/- are fully depreciated in the year of purchase.

iv) Investments : Long term investments are stated at cost less other than temporary dimunation in value if any. Current investments are stated at lower of cost and quoted/ fair value.

v) Inventories :- Raw materials, Packing materials, Stores and Spare parts are valued at Lower of cost and net relizable value. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. (FIFO Method). Semi finished goods are valued at lower of estimated cost and net realisable value & Finished goods are valued at lower of cost or net realisable value. Scrap is valued at net realisable value.

vi) Contingent Liablities:- Contingent liablities are not provided for in the accounts.

vii) Revenue Recognition :- Sale of goods is recognized when the risk and rewards of ownership are passed on to the customers, which is generally on despatch of goods. Conversion Charges Income is recognised as per the terms of contract with customers when the related services are rendered. DEPB income recognised as and when export get completed. State Govt. Freight subsidy recognised in income as and when it received.

viii) Foreign Exchange Transactions:-

a) Transactions in foreign currencies are recorded at the exchange rates prevailing on the date of transaction. Monetary items are translated at the year-end rates. The exchange difference between the rate prevailing on the date of transaction and on the date of settlement as also on translation of Monetary items at the end of the year, is recognised as income or expense.

b) Any premium or discount arising at the inception of the forward exchange contract is recognized as income or expense over the life of the contract. Exchange difference on a forward exchange contract is the difference between the foreign currency amount of the contract translated at the exchange rate at the reporting / settlement date and the said amount translated at the later date of inception of the contract / last reporting date. ix) Lease Rent Transactions: Lease Rentals are accounted for on accrual basis as per the terms of the agreement. Lease transactions in respect of all assets leased after April 1,2001 are classified as either finance lease or operating lease as the case may in accordance with AS 19 issued by The Institute of Chartered Accountants of India and the accounting treatment and disclosure given/ made as prescribed therein. x) Research and Development Expenditure:- Revenue expenditure on Research and Development is charged against the profit of the year in which it is incurred.

xi) Excise and Import duty :-

a) Excise duty in respect of goods manufactured by the Company is accounted on completion of manufacturing of goods.

b) Import duty payable is accountated as and when the goods enter the territory waters of the country.

xii) Employee Benefits :

i) Short Term Employee Benefits - All employee benefits payable within twelve months of rendering the service are recognised in the period in which the employee renders the related service.

ii) Post Employment/Retirement Benefits - Defined Contribution Plans such as Provident Fund etc.are charged to the Profit and Loss Account as incurred.

Defined Benefit Obligation Plans - The present value of the obligation under such plans,is determined based on an actuarial valuation,using the Projected Unit Credit Method. Actuarial gains and losses arising on such valuation are recognized immediately in the Profit and Loss Account. In case of gratuity,which is funded with the Life Insurance Corporation of India,the fair value of the plan assets is reduced from the gross obligation under the defined benefit plans,to recognize the obligation on net basis.

iii) Other Long Term Employee Benefits are recognized in the same manner as Defined Benefit Plans.

xiii) Taxation : Provision for Income Tax, comprising of current tax and deferred tax, is made on the basis of the results of the year. In accorandance with Accounting Standard 22- Accounting for Taxes on Income, issued by the Institute of Chartered Accountant of India Deferred tax resulting from timing difference between the book profits and the tax profits for the year is accounted for using the tax rate and laws that have been enacted or substantively enacted as of the balance sheet date. The Deferred tax assets are recognised & carried forward only to the extent that there is a reasonable certainty of its realisation.

xiv) Borrowing Cost : Borrowing cost which is directly related to the acquisition,construction or production of qualifying assets are capitalised in accordandance with AS-16 Borrowing Cost issued by the Institute of Chartered Accountants of India.

xv) Intangibles : Intangible assets are recognised if it is probable that the future economic benefits attributable to the asset will flow to the enterprise and cost of the asset can be measured reliably in accordance with AS - 26 on Intangible assets issued by The Institute of Chartered Accountants of India. Intangible assets are amortise on straight line basis over the useful lives determine on the basis of expected future economic benefits. The amortisation period and method would be reviewed at the end of each financial year. Softwares are amortised over a period of 36 Months.

xvi) Impairment of Assets : At each balance sheet date the company assesses whether there is any indication that an asset may be impaired, If any such.indications exists , the company estimates the recoverable amount. If the carrying amount of the asset exceeds the recoverable amount, an impairment loss is recognised in the profit and loss account to the extent of carrying amount exceeds the recoverable amount

xvii) Provision for Bad & doubtful debts : Provision is made in accounts for bad & doubtful debts which in the opinion of the Management are considered doubtful.

 
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