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Accounting Policies of S R Industries Ltd. Company

Mar 31, 2015

1. BASIS OF PREPERATION OF FINANCIAL STATEMENTS

a) The financial statements are prepared under the historical cost convention in accordance with the generally accepted accounting principles and the provisions of the Companies Act, 2013. Accounting policies not specifically referred to are consistent with generally accepted accounting policies.

b) The company generally follows mercantile system of accounting and recognizes significant items of Income & Expenditure on accrual basis.

2. FIXED ASSETS

The fixed assets are recorded at the cost which includes freight, duties, levies and any directly attributable cost of bringing the assets to their working condition for intended use, Adjustments arising from exchange rate fluctuations relating to outstanding liabilities attributable to the fixed assets are capitalized/ adjusted.

3. INVENTORIES

Inventories are valued on FIFO Method Raw Materials- at lower of cost or net realizable value. Packing materials, consumable stores and spares-at cost.

Stock-in-process- Material cost plus appropriate share of production overheads.

Finished goods- at lower of cost or net realizable value.

4) CASH AND CASH EQUIVALENTS

Cash and cash equivalents in the balance sheet comprise cash at bank, cash in hand & short term investments

5) EXPENDITURE ON EXPANSION

Expenditure directly relating to constructions/substantial expansion activity is capitalized. Indirect expenditure incurred during construction period is capitalized as a part of indirect construction cost to the extent to which the expenditure is indirectly related to construction or is incidental thereto. Income earned during construction period is deducted from the total of indirect expenditure.

As regards indirect expenditure on expansion, only that portion is capitalized which represents the marginal increase in such expenditure involved as a result of capital expansion. Both direct and indirect expenditure are capitalized only if they increase the value of the asset beyond its original standard of performance.

6) DEPRECIATION

Depreciation is provided on SLM on all the fixed assets on the basis of life of the assets as prescribed in Schedule II of the Companies Act, 2013.

7) RESEARCH AND DEVELOPMENT

Revenue expenditure incurred on Research & Development is charged to Profit & Loss Account

8) REVENUE RECOGNITION

Revenue is recognized based on the nature of activity when consideration can be reasonably measured and there exists reasonable certainty of its recovery.

(a) Revenue from sale of goods is recognized when the substantial risks and rewards of ownership are transferred to the buyer under the terms of the contract.

(b) Other income is accounted for on accrual basis as and when the right to receive arises.

9) FOREIGN CURRENCY TRANSACTIONS

Export sales are accounted for at exchange rate prevailing on the date the documents are negotiated/ realized with/ through bank. In case of direct remittance from buyers the difference between the exchange rates on the dispatched date and actual exchange rate of foreign currency on receipt of payment is booked in sales.

The assets and liabilities at the year end are translated at the closing exchange rate and the difference between the transactions is taken into profit and loss account.

The foreign currency transactions in respect of payment towards cost of fixed assets, spares, traveling, commissions etc. are accounted for at the exchange rates prevailing on the date of transaction/ remittance.

10) BORROWING COST

Borrowing costs that are attributable to the acquisition on construction of qualifying assets are capitalized as a part of the cost 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.

11) TAXES ON INCOME

Tax expenses comprises of current, deferred income tax and fringe benefit tax. Provision for current income tax and fringe benefits tax is made for the amount of tax payable in respect of taxable income for the year under The Income Tax Act, 1961. Deferred tax is recognized subject to the consideration of prudence, on timing difference, being the difference between the book profits and tax profits that originate in one period and are capable of reversal in one or more subsequent periods. The deferred tax assets and liabilities are measured using the tax rates and tax loss that have been enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognized only to the extent that there is a reasonable certainty that sufficient further taxable income will be available against which such deferred tax assets can be realized. If the company has carry forward of unabsorbed depreciation and tax losses, deferred tax assets are recognized only where virtual certainty that such deferred tax assets can be realized against further taxable profits. Unrecognized deferred tax assets of earlier years are reassessed and recognized to the extent that it has become reasonably certain that further taxable income will be available against which such deferred tax assets can be realized.

12) RETIREMENT BENEFITS

The liability on account of Gratuity is covered by the Group Gratuity Policy taken from Life Insurance Corporation of India, Contribution to the Gratuity fund is charged to revenue. The liability of Leave Encashment is provided on actuarial basis. The contribution to the Provident Fund is made as per the provisions of The Employees Provident Fund and Miscellaneous Provisions Act, 1952.

13) USE OF ESTIMATES

The presentation of financial statements require estimates and assumptions to be made that effect the reported amount of assets and liabilities on the date of financial statements and the reported amount of revenue and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known/ materialized.

14) EARNING PER SHARE

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividend & taxes) by the weighted average number of equity shares outstanding during the financial year. Equity shares that are partly paid up are treated as a fraction of an equity share to the extent they entitled to participate in dividends. The weighted average numbers of equity shares outstanding during the year are adjusted for events such as bonus issue, bonus element in a right issue to the existing shareholders, share split and consolidation of shares.

For the purpose of calculating diluted EPS, the net profit or loss attributable to equity share holders and weighted average number of equity shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

15) INTANGIBLE ASSETS

An Intangible Asset is recognized if and only if-

a) It is probable that the future economic benefits that attributable to the assets will flow to the enterprise.

b) The cost of assets can be measured reliably.

An intangible asset is measured initially at cost.

The amortization method will be used to reflect the pattern in which asset's economic benefits are consumed by the enterprise. If that pattern cannot be determined reliably, the straight line method will be used;

16) IMPAIRMENT OF ASSETS

An asset is treated as impaired, when carrying cost of assets exceeds its recoverable amount. An impaired loss is charged to Profit & Loss Account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting periods is reversed if there has been a change in the estimate of the recoverable amount.

17) 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 outflow of resources. Provisions are determined based on the best estimates required to fulfill the obligation on the balance sheet date. Provisions 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.

18) INVESTMENTS

I) Investments are classified as Long Term and current investments.

ii) Long Term Investments are carried at cost. Provision for Diminution, if any in the value of each long term investment is made to recognize a decline other than of temporary nature.

iii) Current Investments are stated at lower of cost or market value and resultant decline, if any, is charged to revenue.

19) SEGMENT REPORTING

a) . Segment accounting policies are in line with the

accounting policies of the company. In addition, the following specific accounting policies have been followed for segment reporting.

(1) . Segment revenue includes sales and other income directly identifiable with/allocable to the segment including inter segment sales.

(2) Expenses that are directly identifiable with/allocabie to segment are considered for determining the segment result. Expenses which relate to the Company as a whole and not allocable to segment are included under un-allocable corporate expenditure.

(3) Income which relates to the company as a whole and not allocable to segments is included in un-allocable corporate income.

(4) Segment assets and liabilities include those directly identifiable with the respective segments. Un-allocable corporate assets and liabilities represent the assets and liabilities that relate to company as a whole and not allocable to any segment. Un-allocable assets mainly comprise corporate head office assets, investments and tax deposited with the Income Tax authorities. Un-allocable liabilities include mainly unsecured loans and tax payable to Income Tax Authorities.

b) Inter Segment transfer pricing

Segment revenue resulting from transactions with other business segments is accounted on the basis of cost of production.

20) GOVERNMENT GRANTS AND SUBSIDIES

Grants and subsidies from the government are recognized when there is reasonable assurance that the grant/subsidy will be received and all attaching conditions will be complied with.

When grant or subsidy relates to an expense item, it is recognized as income over the periods necessary to match them on a systematic basis the cost, which it is intended to compensate. Where grant/subsidy relates to an asset, its value is deducted in arriving at the carrying amount of the related asset against which grant/subsidy has been received and further where the grant/subsidy is in the nature of promoters contribution the amount of grant/ subsidy is accounted for as a capital reserve.


Mar 31, 2014

1. BASIS OF PREPERATION OF FINANCIAL STATEMENNTS

a) The financial statements are prepared under the historical cost convention in accordance with the generally accepted accounting principles and the provisions of the Companies Act, 1956, Accounting policies not specifically referred to are consistent with generally accepted accounting policies.

b) The company generally follows mercantile system of accounting and recognizes significant items of Income & Expenditure on accrual basis,

2. FIXED ASSETS

The fixed assets are recorded at the cost which includes freight, duties, levies and any directly attributable cost of bringing the assets to their working condition for intended use, Adjustments arising from exchange rale fluctuations relating to outstanding liabilities attributable to the fixed assets are capitalized/ adjusted.

3. INVENTORIES

Inventories are valued on FIFO Method Raw Materials- at lower of cost or net realizable value, Packing materials, consumable stores and spares at cost.

Stock-in-process- Material cost plus appropriate share of production overheads.

Finished goods- at lower of cost or net realizable value.

4) CASH AND CASH EQUIVALENTS

Cash and cash equivalent In the balance sheet comprises cash at bank, cash in hand & short term investments

5) EXPENDITURE ON EXPANSION

Expenditure directly relating to constructions/substanlial expansion activity is capitalized. Indirect expenditure incurred during construction period is capitalized as a part of Indirect construction cost to the extent to which the expenditure is indirectly related to construction or is incidental thereto. Income earned during construction period is deducted from the total of indirect expenditure, As regards indirect expenditure on expansion, only that portion Is capitalized which represents the marginal Increase in such expenditure involved as a result of capital expansion Both direct and indirect expenditure are capitalized only if they increase the value of the asset beyond its original standard of performance.

6) DEPRECIATION

Depreciation is provided on Straight Line Method on pro-rata basis on all the fixed assets at the rates prescribed in Schedule XIV of the Companies Act, 1956

7) RESEARCH AND DEVELOPMENT

Revenue expenditure Incurred on Research & Development is charged to Profit & Loss Account

8) REVENUE RECOGNITION

Revenue is recognized based on the nature of activity when consideration can be reasonably measured and there exists reasonable certainty of its recovery.

(a) Revenue from sale of goods is recognized when the substantial risks and rewards of ownership are transferred to the buyer under the terms of the contract.

(b) Other Income is accounted for on accrual basis as and when the right to receive arises.

9) FOREIGN CURRENCY TRANSACTIONS

Export sales are accounted for at exchange rate prevailing on the date the documents are negotiated/ realized with/through bank. In case of direct remittance from buyers the difference between the exchange rates on the dispatched date and actual exchange rate of foreign currency on receipt of payment is booked in sales.

The assets and liabilities at the year end are translated at the closing exchange rate and the difference between the transactions is taken into profit and loss account.

The foreign currency transactions in respect Of payment towards cost of fixed assets, spares, traveling, commissions etc. are accounted for at the exchange rates prevailing on the date of transaction/ remittance.

10) BORROWING COST

Borrowing costs that are attributable to the acquisition on construction of qualifying assets are capitalized as a part of the cost 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,

11) TAXES ON INCOME

Tax expenses comprises of current, deferred income tax and fringe benefit tax. Provision for current income tax and fringe benefits tax is made for the amount of tax payable in respect of taxable income for the year under The Income Tax Act, 1961. Deferred tax is recognized subject to the consideration of prudence, on timing difference, being the difference between the book profits and lax profits that originate in one period and are capable of reversal in one or more subsequent periods. The deferred tax assets and liabilities are measured using the tax rates and tax loss that have been enacted or substantively enacted at the balance sheet dale. Deferred tax assets are recognized only to the extent that (here is a reasonable certainty that sufficient further taxable income will be available against which such deferred tax assets can be realized. If the company has carry forward of unabsorbed depreciation and tax losses, deferred tax assets are recognized only where virtual certainty that such deferred tax assets can be realized against further taxable profits. Unrecognized deferred tax assets of earlier years are reassessed and recognized to the extent that it has become reasonably certain that further taxable income will be available against which such deferred tax assets can be realized.

12) RETIREMENT BENEFITS

The liability on account of Gratuity is covered by the Group Gratuity Policy taken from Life Insurance Corporation of India. Contribution to the Gratuity fund is charged to revenue. The liability of Leave Encashment is provided on actuarial basis. The contribution to the Provident Fund Is made as per the provisions of The Employees Provident Fund and Miscellaneous Provisions Act, 1952.

13) USE OF ESTIMATES

The presentation of financial statements require estimates and assumptions to be made that effect the reported amount of assets and liabilities on the date of financial statements and the reported amount of revenue and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known/ materialized.

14) EARNING PER SHARE

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividend & taxes) by the weighted average number of equity shares outstanding during the financial year. Equity shares that are partly paid up are treated as a fraction of an equity share to the extent they entitled to participate in dividends. The weighted average numbers of equity shares outstanding during the year are adjusted for events such as bonus issue, bonus element in a right issue to the existing shareholders, share split and consolidation of shares.

For the purpose of calculating diluted EPS, the net profit or loss attributable to equity share holders and weighted average number of equity shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

15) INTANGIBLE ASSETS

An Intangible Asset is recognized if and only If-

a) It is probable that the future economic benefits that attributable to the assets will flow to the enterprise.

b) The cost of assets can be measured reliably.

An intangible asset is measured initially at cost.

The amortization method will be used to reflect the pattern in which asset's economic benefits are consumed by the enterprise. If that pattern cannot be determined reliably, the straight line method will be used.

16) IMPAIRMENT OF ASSETS

An asset is treated as impaired, when carrying cost of assets exceeds Its recoverable amount. An impaired loss is charged to Profit 4 Loss Account in the year in which an asset is identified as impaired. The impairment loss recognized In prior accounting periods is reversed if there has been a change in the estimate of the recoverable amount.

17) 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 outflow of resources. Provisions are determined based on the best estimates required to fulfill the obligation on the balance sheet date, Provisions 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.

16) INVESTMENTS

i) Investments are classified as Long Term and current investments.

ii) Long Term Investments are carried at cost. Provision lor Diminution, If any In the value of each long term Investment Is made to recognize a decline other than of temporary nature.

iii) Current Investments are stated at lower of cost or market value and resultant decline, if any, is charged to revenue.

19) SEGMENT REPORTING

a) Segment accounting policies are In line with the

accounting policies of the company. In addition, the following specific accounting policies have been followed for segment reporting.

(1). Segment revenue includes sales and other Income

directly Identifiable with/allocable to the segment including inter segment sales.

(2) Expenses that are directly identifiable wtth/atlocable to segment are considered'for determining the segment result. Expenses which relate to the Company as a whole and not allocable to segment are included under un allocable corporate expenditure.

(3) Income which relates to the company as a whole and not allocable to segments is included in un-allocable corporate Income.

(4) Segment assets and liabilities include those directly identifiable with the respective segments. Un-allocable corporate assets and liabilities represent the assets and liabilities that relate to company as a whole and not allocable to any segment. Un-allocable assets mainly comprise corporate head office assets, investments and tax deposited with the Income Tax authorities. Un-allocable liabilities include mainly unsecured loans and tax payable to Income Tax Authorities.

b) Inter Segment transfer pricing

Segment revenue resulting from transactions with other business segments is accounted on the basis of cost of production.

20) GOVERNMENT GRANTS AND SUBSIDIES

Grants and subsidies from the government are recognized when there is reasonable assurance that the grant/subsidy will be received and all attaching conditions will be complied with.

When grant or subsidy relates to an expense item, it is recognized as income over the periods necessary to match them on a systematic basis the cost, which It is intended to compensate. Where grant/subsidy relates to an asset, its value is deducted in arriving at the carrying amount of the related asset against which grant/subsidy has been received and further where the grant/subsidy is in the nature of promoters contribution the amount of grant/subsidy is accounted for as a capital reserve.


Jun 30, 2012

1. BASIS OF PREPERATION OF FINANCIAL STATEMENTS

a) The financial statements are prepared under the historical '' cost convention in accordance with the generally accepted accounting principles and the provisions of the Companies Act, 1956. Accounting policies not specifically referred to are consistent with generally accepted accounting policies.

b) The company generally follows mercantile system of accounting and recognizes significant item of Income & Expenditure on accrual basis.

2. FIXED ASSETS

The fixed assets are recorded at the cost which includes freight, duties, levies and any directly attributable cost of bringing the assets to their working condition for their intended use. Adjustments arising from exchange rate fluctuations relating to outstanding liabilities attributable to the fixed assets are capitalized/ adjusted.

3. INVENTORIES

Inventories are valued on FIFO Method

- Raw materials- at lower of cost or net realizable value.

- Packing materials, consumable stores and spares-at cost.

- Stock-in-process- Material cost plus appropriate share of production overheads. .

- Finished goods; at lower of cost or net realizable value.

4. EXPENDITURE ON EXPANSION

Expenditure directly relating to constructions/substantial , expansion activity is capitalized. Indirect expenditure incurred during construction period is capitalized as a part of indirect construction cost to the extent to which the expenditure is indirectly related to construction or is incidental thereto. Income earned for during construction period is deducted from the total of indirect expenditure.

As regards indirect expenditure on expansion, only''that portion is capitalized which represents the marginal increase in such expenditure involved as a result of capital expansion.

Both direct and indirect expenditure are capitalized onlyjf they increase the value of the asset beyond its original standard of performance.

5. DEPRECIATION

Depreciation is provided on Straight Line Method on pro-rata basis on all the fixed assets at the rates prescribed in Schedule XIV of the Companies Act, 1956''.

6. FOREIGN CURRENCY TRANSACTIONS

Export sales are accounted for at exchange rate prevailing on the date the documents are negotiated/ realized with/ through bank. In case of direct remittance from buyers the difference between the exchange rates on the dispatch date and actual exchange rate of foreign currency on receipt of payment is booked in sates.

The assets and liabilities at the year end are translated at the closing exchange rate and the difference between the transactions is taken into profit and loss account.

The foreign currency transactions in respect of payment towards cost of fixed assets, spares, traveling, commissions etc. are accounted for at the exchange rates prevailing on the date of transaction/ remittance.

7. BORROWING COST

Borrowing costs that are attributable to the acquisition on construction of qualifying assets are capitalized as a part of the cost 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.

8. TAXES ON INCOME .

- Tax expenses comprises of current, deferred income tax and fringe benefit tax. Provision for current income tax and fringe benefits tax is made for the amount of tax payable in respect of taxable income for the year under The Income Tax Act, 1961. Deferred tax is recognized subject to the . consideration of prudence, on timing difference, being the difference between the book profits and tax profits that originate in one period and are capable of reversal in one or more subsequent periods. The deferred tax assets and liabilities are measured using the tax rates and tax toss that - , have been enacted of substantively enacted at the balance sheet date. Deferred tax assets are recognized only to the extent that there is a reasonable certainty that sufficient further taxable income will be available against which such deferred tax assets can be realized. If the company has carry forward of unabsorbed depreciation and tax losses,, deferred tax assets are recognized only where virtual certainty that such deferred tax assets can be realized against further taxable profits. Unrecognized deferred tax assets of earlier years are reassessed and recognized to the extent that it has become reasonably certain that further taxable income will be available against which such deferred tax assets can be realized.

9. RETIREMENT BENEFITS

The liability on account of Gratuity Is covered by the Group Gratuity Policy taken from Life Insurance Corporation of India. Contribution to the Gratuity fund is charged to revenue. The liability of Leave Encashment is provided on actuarial basis.

The contribution to the Provident Fund is made as per the provisions of The Employees Provident Fund and Miscellaneous Provisions Act, 1952.

10. USE OF ESTIMATES

The presentation of financial statements require estimates and assumptions to be made that effect the reported amount of assets and liabilities on the date of financial statements and the reported amount of revenue and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known/ materialized.

11. EARNING PER SHARE

Basic earnings per share are calculated by dividing the net '' profit or loss for the period attributable to equity shareholders {after deducting preference dividend & taxes) by the weighted average number of equity shares outstanding during the financial year. Equity shares that are partly paid up are treated as a fraction of an equity share to the extent they entitled to participate in dividends. The weighted average numbers of equity shares outstanding during the year are adjusted for events such as bonus issue, bonus eleimnt In a right issue to the existing shareholders, share split and consolidation of shares.

For the purpose of calculating diluted EPS, the net profit or loss attributable to equity share holders and weighted average number of equity shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

12. INTANGIBLE ASSETS

An Intangible Asset is recognized if and only if

a) It is probable that the future economic benefits that attributable to the assets will flow to the enterprises

b) The cost of assets can be measured reliably.

An intangible asset is measured initially at cost

The amortization method will be used to reflect the pattern in which asset''s economic benefits are consumed by the enterprise. If that pattern cannot be determined reliably, the straight line method will be used.

13. IMPAIRMENT OF ASSETS

An asset is treated, as impaired, when carrying cost of assets exceeds its recoverable amount An impaired loss is charged to Profit & Loss Account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting periods is reversed if there has been a change In the estimate of the recoverable amount

14. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Provisions involving substantial degree of estimation In measurement are recognized when there is a preient obligation as a result of past events and it is probable that there will be outflow of resources. Provisions are dete rm ined based on the best estimates required to fulfill the obligation on the balance sheet date. Provisions 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.

15. SEGMENT REPORTING

a). Segment accounting policies are in line with the accounting policies of the company. In addition, the following specific accounting policies have been followed for segment reporting.

(1) Segment revenue includes sales and other income directly identifiable with/allocable to the segment including inter segment sales.

(2) Expenses that are directly identifiable with/allocable to segment are considered for determining the segment result. Expenses which relate to the Company as a whole and not allocable to segment are included under un-allocable corporate expenditure.

(3) Income which relates to the company as a whale and nol allocable to segments is Included in un-allocable corporate income.

(4) Segment assets and liabilities include those directly identifiable with the respective segments. Un-allocable corporate assets and liabilities represent the assets and liabilities that relate to company as a whole and not allocable to any segment. Un- allocable assets mainly comprise corporate head office assets, investments and tax deposited with the Income Tax authorities. Un-allocable liabilities include mainly unsecured loans and tax payable to Income Tax Authorities.

b). Inter Segment transfer pricing

Segment revenue resulting, from transactions with other business segments is accounted on the basis of cost of production.

16. GOVERNMENT GRANTS AND SUBSIDIES

Grants and subsidies from the government are recognized when there is reasonable assurance that the grant/subsidy will be received and all attaching conditions will be complied with.

When grant or subsidy relates to an expense item, it is recognized as income over the periods necessary to match them on a systematic basis the cost, which it is intended to compensate. Where grant/subsidy relates to an asset, its value is deducted in arriving at the carrying amount of the related asset against which grantteubsidy has been received and further where the grant/subsidy Is in the nature of promoters contribution the amount of grant/subsidy is accounted for as a capital reseive.


Mar 31, 2010

1) BASIS OF PREPARATION OF FINANCIAL STATEMENTS

a) The financial statements are prepared under the historical cost convention in accordance with the generally accepted accounting principles and the provisions of the Companies Act, 1956. Accounting policies not specifically referred to are consistent with generally accepted accounting policies.

b) The company generaly follows mercantile system of accounting and recognises significant items of income and expenditure on accrual basis.

2) FIXED ASSETS

The fixed assets are recorded at the cost which includes freight. duties. levies and any directly attributable cost of bringing the assets to their working condition for intended use. Adjustments arising from exchange rate fluctuations relating to outstanding liabilities attributable to the fixed assets are capitalised/adjusted.

3) INVENTORIES

Inventories are valued on FIFO method

- Raw materials - at lower of cost or net realisable value.

- Packing materials, consumables and stores & spares - at cost

- Stock-in-process - material cost plus appropriate share of production overheads.

- Finished goods - at lower of cost or net realisable value.

4) EXPENDITURE ON EXPANSIONS

Expenditure directly relating to construction/substantial expansion activity is capitalised. Indirect expenditure incurred during construction period is captalised as part of the indirect construction cost to the extent to which the expenditure is indirectly related to construction or is incidental thereto. Income earned during construction period is deducted from the total of the indirect expenditure. As regards indirect expenditure on expansion, only that portion is capitalised which represents the marginal increase in such expenditure involved as a result of capital expansion. Both direct and indirect expenditure are capitalised only if they increase the value of the asset beyond its original standard of performance.

5) DEPRECIATION

Deprecation is provided on Straight Line Method on pro-rata basis on all the fixed assets at the rates prescribed in Schedule XIV to the Companies Act, 1956.

6) FOREIGN CURRENCY TRANSACTIONS

Export sates are accounted for at exchange rates prevaiting on the date the documents are negotiated/realised with/through Bank. In case of direct remittance from buyers the difference between the exchange rates on the despatch date and actual exchange rate of foreign currency on receipt of payrrent is booked in sates.

The assets and liabilities at the year end are translated at the closing exchange rate and the difference between the transaction is taken into profit and loss account.

The foreign currency transactions in respect of payments towards cost of fixed assets, spares, travelling, commission etc. are accounted for at the exchange rates prevailing on the date of transaction/remittance.

7) BORROWING COST

Borrowing costs that are attributable to he acquisition or construction of qualifying assets are capitalised as a part of the cost 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.

8) TAXES ON INCOME

Tax expenses comprises of current, deferred and fringe benefit tax. Provision for current income tax and fringe benefit tax is made for the amount of tax payable in respect of taxable income for the year under the Income Tax Act, 1961.

Deferred tax is recognised subject to the consderation of prudence, on timing difference, being the difference between book profit and tax profit that originate in one period and are capable of reversal in one or more subsequent periods.

Deferred tax assets and liabilities are measured using the tax rates and tax toss that have been enacted or substantively enacted at the balance sheetdate. Deferredtax assets are recoqnized only to the extent that there is reasonable certainty that sufficient further taxable income will be available against which such deferred tax assets can be realized. If the company has carry forward of unabsobed depreciation and tax losses, deferred tax assets are recognized only if there is virtual certainty that such deferred tax assets can be realized against further taxable profits. Unrecognized deferred tax assets of earlier years are reassessed and recognized to the extent that it has become reasonably certain that further taxable income will be available against which such deferred tax assets can be realized.

9) RETIREMENT BENEFITS

The liability on account of Gratuity is covered by the Group Gratuity Policy taken from Life Insurance Corporation of India. Contribution to the gratuity fund is charged to revenue. The liability of leave encashment is provided on actuarial basis. The contribution to Provident Fund is made as per the provisions of The Employees Provident Fund and Miscellaneous Provisions Act 1952.

10) USE OF ESTIMATES

The presentation of financial statements require estimates and assumptions to be made that effect the reported amount of assets and liabilities on the date of financial statements and the reported amount of revenue and expenses during the reporting period. Difference between the actual results and estimates are recognised in he period in which the results are known/materialised.

11) EARNING PER SHARE

Basic earnings per share are calculated by dividing the net profit or toss for he period attributable to equity shareholders after deducting taxes by the weighted average number of equity shares outstanding during the year. Equity shares that are party paid up are treated as a fraction of an equity share to the extent they entitled to participate in dividends. The weighted average number of equity shares outstandhg during the year are adjusted for events such as bonus issue, bonus element in a right issue to the existing shareholders, share split and consolidation of shares. For the purpose of calculating diluted EPS, he net profit or toss attributable to equity share holders and weighted average number of equity shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares

12) INTANGIBLE ASSETS

An intangible asset is recognized if and only if -

a) it is probabte that the future economic benefits that are attributable to the asset will flow to the enterprise, and

b) the cost of the asset can be measured reliably

An intangible asset is measured initially at cost The amortization method will be used to reflect the pattern in which the assets economic benefits are consumed by the enterprise. If that pattern cannot be determined reliably, the straight line method will be used.

13) IMPAIRMENT OF ASSETS

An asset is treated as impaired, when carrying cost of asset exceeds its recoverable amount An impaired toss is charged to Profit& Loss Account in the year in which an asset is identified as impaired. The impairment toss recognised in prioraccounting periods is reversed if there has been a change in the estimate of the recoverable amount

14) PROVISIONS, CONTINGENT LIABILITIES AMD CONTINGENT ASSETS

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be outflow of resources. Provisions are determined based on the best estimates required to falfill the obligation on the balance sheet date. Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimates. Contingent liabilities are not recognised but are disclosed In the notes. Contingent Assets are neither recognised nor disclosed in the financial statements.


Mar 31, 2009

1) BASIS OF PREPARATION OF FINANCIAL STATEMENTS

a) The financial statements are prepared under the historical cost convention in accordance with the generally accepted accounting principles and the provisions of the Companies Act, 1956. Accounting policies not specifically referred to are consistent with generally accepted accounting policies.

b) The company generally follows mercantile system of accounting and recognises significant items of income and expenditure on accrual basis.

2) FIXED ASSETS

The fixed assets are recorded at thecostwhich includes freight, duties, levies and any directly attributable cost of bringing the assets to their working condition for intended use. Adjustments arising from exchange rate fluctuations relating to outstanding liabilities attributable to the fixed assets are capitalised/adjusted.

3) INVENTORIES

Inventories are valued on FIFO method

- Raw materials - at lower of cost or net releasable value.

- Packing materials, consumable and stores & spares - at cost

- Stock-in-process - material cost plus appropriate share of production

overheads.

- Finished goods - at lower of cost or net releasible value.

4) EXPENDITURE ON EXPANSIONS

Expenditure directly relating to construction/substantial expansion activity is capitalised. Indirect expenditure incurred during construction period is capitalised as part of the indirect construction cost to the extent to which the expenditure is indirectly related to construction or is incidental thereto. Income earned during construction period is deducted from the total of the indirect expenditure.

As regards indirect expenditure on expansion, only that portion is capitalised which represents the marginal increase in such expenditure involved as a result of capital expansion. Both direct and indirect expenditure are capitalised only if they increase the value of the asset beyond its original standard of performance.

5) DEPRECIATION

Depreciation is provided on Straight Line Method on pro-rata basis on all the fixed assets at the rates prescribed in Schedule XIV to the Companies Act, 1956.

6) FOREIGN CURRENCY TRANSACTIONS

Export sales are accounted for at exchange rates prevailing on the dale the documents are negotiated/realised with/through Bank. In case of direct remittance from buyers the difference between the exchange rates on the despatch date and actual exchange rate of foreign currency on receipt of payment is booked h sales.

The assets and liabilities at the year end are translated at the closing exchange rate and the difference between the transaction is taken into profit and loss account.

The foreign currency transactions in respect of payments towards cost of fixed assets, spares, travelling, commission, etc. are accounted for at the exchange rates prevailing on the date of transaction/remittance.

7) BORROWING COST

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalised asapart of thecost ofsuch assets.Aqualifying asset is one that necessarily takes substantial period of time to get ready for intended-use. AH other borrowing costs are charged to revenue.

8) TAXES ON INCOME

Tax expenses comprises of current, deferred and fringe benefit tax. Provision for current income tax and fringe benefit tax is made for the amount of tax payable in respect of taxable income for the year under the Income Tax Act, 1961.

Deferred tax is recognised subject to the consideration of prudence, on timing difference, being the difference between book profit and tax profit that originate in one period and are capable of reversal in one or more subsequent periods.

Deferred tax assets and liabilities are measured using the tax rates and tax loss that have been enacted or substantively enacted at the balance sheetdate. Deferred is reasonable certainty that sufficient further taxable income will be available against which such deferred tax assets can be realized. If the company has carry forward of unabsorbed depreciation and tax losses, deferred tax assets are recognized only if there is virtual certainty that such deferred tax assets can be realized against further taxable profits. Unrecognized deferred tax assets of earlier years are reassessed and recognized to the extent that it has become reasonably certain that further taxable income will be available against which such deferred tax assets can be realized.

9) RETIREMENT BENEFITS

The liability on account of Gratuity is covered by the Group Gratuity Policy taken from Life Insurance Corporation of India. Contribution to the gratuity fund is charged to revenue. The liability of leave encashment is provided on actuarial basis. The contribution to Provident Fund is made as per the provisions of The Employees Provident Fund, and Miscellaneous Provisions Act,. 1952.

10) USE OF ESTIMATES

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

11) EARNING PER SHARE

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders after deducting taxes by the weighted average number of equity shares outstanding during the year. Equity shares that are partly paid up are treated as a fraction of an equity share to the extent they entitled to participate in dividends. The weighted average number of equity shares outstanding during the year are adjusted for events such as bonus issue, bonus element in a right issue to the existing shareholders, share split and consolidation of shares. For the purpose of calculating diluted EPS, the net profit or loss attributable to equity share holders and weighted average number of equity shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

12) INTANGIBLE ASSETS

An intangible asset is recognized if and only if -

a) it is probable that the future economic benefits that are attributable to the asset will flow to the enterprise, and

b) the cost of the asset can be measured reliably

An intangible asset is measured initially at cost. The amortization method will be used to reflect the pattern in which the assets economic benefits are consumed by the enterprise. If that pattern cannot be determined reliably, the straight line method will be used.

13) IMPAIRMENT OF ASSETS

An asset is treated as impaired, when carrying cost of asset exceeds its recoverable amount. An impaired loss is charged to Profit & Loss Account in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting periods is reversed if there has been a change in the estimate of the recoverable amount.

14) PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be outflow of resources. Provisions are determined based on the best estimates required to fulfill the obligation on the balance sheet date. Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimates. Contingent liabilities are not recognised but are disclosed in the notes. Contingent Assets are neither recognised nor disclosed in the financial statements.

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