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Accounting Policies of Safari Industries (India) Ltd. Company

Mar 31, 2015

I) Basis of Preparation :

The financial statements are prepared on the basis of going concern, under historical cost convention and on accrual basis of accounting and in compliance with the Accounting Standards referred to in section 133 of the Companies Act, 2013 ("the Act"), read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Act. Claims against the company are recognized when finally accepted by the company.

ii) Use of Estimates:

The preparation of the financial statements, in conformity with generally accepted accounting principles, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses and disclosure of contingent liabilities at the date of the financial statements. Actual results could differ from those estimates. Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. Any revision to the accounting estimates is recognized prospectively.

iii) Classification of Assets and Liabilities :

Assets and Liabilities are classified as current/non-current, considering inter-alia, expected realization/settlement in the Company's normal operating cycle of six/seven months or a period of twelve months from the Balance sheet date.

iv) Fixed Assets :

Fixed Assets (Tangible & Intangible except trademarks) are carried at the cost of acquisition or at appropriate cost of fabrication (including excise duty where applicable) in case of in-house fabricated tangible assets, after reducing CENVAT credit thereon, where applicable, less accumulated depreciation and amortization.

Costs directly attributable to bringing the assets to their working condition for intended use, are capitalized. Such costs include appropriate cost of borrowing in respect of assets other than those which are ready for their intended use upon acquisition.

v) Depreciation and Amortisation :

(a) Leasehold Land

Premium on leasehold land is amortised over the period of lease.

(b) Other Assets

Depreciation has been provided, considering the lives as prescribed by Schedule II of the Act, on Straight Line Method in respect of Tangible Assets, except on items of Furniture & Fixtures capitalized at the retail stores which are depreciated over their useful life of 2 years on pro-rata basis, considering nature of assets at the said stores and the period for which such stores may remain in operation at the same location. Intangible Assets are amortized over their estimated useful life.

Assets costing less than Rs. 5000/- each, acquired during the financial year, are being fully charged off to the Statement of Profit and Loss.

vi) Investments :

Non-Current Investment are stated at cost. Provision is made in respect of diminution in the value of investment, only if such decline is other than temporary.

vii) Inventories :

a) Raw materials, Stores and Spares and Packing materials are valued at the lower of cost and net realizable value on First In First Out basis.

b) Finished goods (manufactured) and Work-in-progress are valued at the lower of cost and net realizable value on First In First Out basis. Cost includes direct materials cost, direct labour cost, freight cost, other relevant overheads, including applicable duties and levies, incurred to bring such goods in their present location and condition.

c) Finished goods (traded) are valued at the lower of cost and net realizable value on First In First Out basis. Cost includes landed cost of Goods, freight, octroi, and other costs incurred to bring such goods in their present location and condition.

viii) Revenue Recognition :

Sales are recognized on dispatch of goods to the customers and are reflected in accounts at the gross realizable value, i.e. inclusive of excise duty, wherever applicable, less returns.

ix) Import Duty Benefits :

Goods imported for trading and eligible for refund of Special Additional Duty of Custom are accounted net of such benefit.

x) Foreign Currency Transactions :

a) Foreign currency transactions during the year are accounted at the spot rate prevailing on the date of respective transaction.

b) Difference between the spot rate prevailing on the date of transaction and the exchange rate at which the liability is settled is recognized in the Statement of Profit & Loss. Foreign currency monetary transactions outstanding at the close of the financial year are restated at the spot rate prevailing at the close of the financial year. Loss or gain due to such restatement is recognized in the Statement of Profit & Loss.

c) In case of forward contracts, the difference i.e. premium or discount, between the forward rate and exchange rate on the date of the transaction is recognized as expense or income over the life of the contract.

xi) Taxation :

Current Tax :

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

Deferred Tax :

Income tax expense is accrued in accordance with Accounting Standard 22 - Accounting for Taxes on Income, which includes current and deferred taxes. Deferred Income Taxes reflect the impact of timing differences between taxable income & accounting income for the year and reversal/restatement of timing differences of earlier years.

Deferred tax assets and liabilities are measured using the tax rate and tax laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax assets are recognized for all reversible timing differences, carry forward of unused tax assets and unused tax losses subject to consideration of prudence. Carrying amount of deferred tax assets is reviewed at each balance sheet date on the same consideration.

xii) Employee Benefits :

a. Defined Contribution Plan

Provident Fund, Family Pension Fund - Contribution as per the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 towards Provident Fund and Family Pension Fund are provided for and payments in respect thereof are made to the relevant authorities on actual basis.

b. Defined Benefit Plan

Gratuity - In accordance with applicable laws, the Company provides for gratuity, a defined benefit retirement plan ("Gratuity Plan") covering all employees. The company has an employees' gratuity fund managed by the Life Insurance Corporation of India ("UC").The Gratuity Plan provides a lump sum payment to vested employees, at retirement or termination of employment, an amount based on the respective employee's last drawn basic salary and the years of employment with the Company. Liability with regard to Gratuity Plan is accrued based on actuarial valuation at the Balance Sheet date, carried out by an independent actuary. Actuarial gain or loss is recognized immediately in the Statement of Profit and loss as income or expense.

c. Compensated Absences

The employees are entitled to accumulate leave subject to certain limits, for the future availment. Encashment of leave is given as per the leave policy of the Company.

xiii) Product Warranties :

Product Warranty costs are provided in the year of sale based on past experience.

xiv) Voluntary Employees' Separation Scheme :

Ex-gratia to employees is paid based on the effective acceptance of the application under "Voluntary Employees Separation Scheme" (VESS), which is charged to Statement of Profit & Loss.

xv) Leases

Payments under operating leases are recognized in the Statement of Profit and Loss as Rent.

xvi) Impairment of Assets :

If internal/external indications suggest that an asset of the company may be impaired, the recoverable amount of asset/cash generating unit is determined on the Balance Sheet date and if it is less than its carrying amount, the carrying amount of the asset/cash generating unit is reduced to the said recoverable amount. The recoverable amount is measured as the higher of net selling price and value in use of such assets/cash generating unit, which is determined by the present value of the estimated future Cash Flows.

xvii) Provisions, Contingent Liabilities and Contingent Assets :

a) The Company recognizes as Provisions, the liabilities being present obligations arising out of past events, the settlement of which is expected to result in an outflow of resources and which can be measured only by using a substantial degree of estimation.

b) Contingent Liability is disclosed, unless the possibility of an outflow of resources is remote.

c) Contingent Assets are not recognized nor disclosed.

C. RIGHTS, PREFERENCE AND RESTRICTION


Mar 31, 2014

I) Basis of Preparation :

The financial statements are prepared on the basis of going concern, under historical cost convention and on accrual basis of accounting and in compliance with the Accounting Standards referred to in section 211(3C) of the Companies Act, 1956 ("the 1956 Act"), which have been prescribed by the Companies (Accounting Standards) Rules, 2006, [which continue to be applicable in respect of section 133 of the Companies Act, 2013 ("the 2013 Act") in terms of General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs], and the relevant provisions of the 1956 Act/2013 Act, as applicable. Claims against the company are recognized when finally accepted by the company.

ii) Use of Estimates:

The preparation of the financial statements, in conformity with generally accepted accounting principles, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses and disclosure of contingent liabilities at the date of the financial statements. Actual results could differ from those estimates. Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. Any revision to the accounting estimates is recognized prospectively.

iii) Classification of Assets and Liabilities :

Assets and Liabilities are classified as current/non-current, considering inter-alia, expected realization/settlement in the Company''s normal operating cycle of six/seven months or a period of twelve months from the Balance sheet date.

iv) Fixed Assets :

Fixed Assets (Tangible & Intangible except trademarks) are carried at the cost of acquisition or at appropriate cost of fabrication (including excise duty wherever applicable) in case of in-house fabricated tangible assets, after reducing CENVAT credit thereon, wherever applicable, less accumulated depreciation and amortization.

Cost directly attributable to bringing the assets to their working condition for intended use, are capitalized. Such costs include appropriate cost of borrowing in respect of assets other than those which are ready for their intended use upon acquisition.

v) Depreciation and Amortisation :

(a) Leasehold Land

Premium on leasehold land is amortised over the period of lease.

(b) Other Assets

Depreciation has been provided as prescribed by Schedule XIV of the Companies Act, 1956 on Straight Line Method on Tangible Assets except on Items of Furniture & Fixtures capitalized at the retail stores which are depreciated at the rate of 50% on pro-rata basis. Intangible Assets are amortized over their estimated useful life. Assets costing less than Rs. 5000/- each, acquired during the financial year, are being fully written off.

vi) Inventories :

a) Raw materials, Stores and Spares and Packing materials are valued at the lower of cost and net realizable value on First In First Out basis.

b) Finished goods (manufactured) and Work-in-progress are valued at the lower of cost and net realizable value on First In First Out basis. Cost includes direct materials cost, direct labour cost, other relevant overheads, including applicable duties and levies, incurred to bring such goods in their present location and condition.

c) Finished goods (traded) are valued at the lower of cost and net realizable value on First In First Out basis. Cost includes freight, octroi and other costs incurred to bring such goods in their present location and condition.

NOTES FORMING PART OF FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2014(contd..)

vii) Revenue Recognition :

Local sales are recognized on dispatch of goods to the customers and are reflected in accounts at the gross realizable value, i.e. inclusive of excise duty, sales-tax and other levies, wherever applicable, less returns.

viii) Import Duty Benefits :

Goods imported for trading and eligible for refund of Special Additional Duty of Custom are accounted net of such benefit. ix) Foreign Currency Transactions :

a) Foreign currency transactions during the year are accounted at the spot rate prevailing on the date of respective transaction

b) Difference between the spot rate prevailing on the date of transaction and the exchange rate at which the liability is settled is recognized in the Statement of Profit & Loss. Foreign currency monetary transactions outstanding at the close of the financial year are restated at the spot rate prevailing at the close of the financial year. Loss or gain due to such restatement is recognized in the Statement of Profit & Loss.

c) In case of forward exchange contracts, the difference i.e. premium or discount, between the forward rate and exchange rate on the date of the transaction is recognized as expense or income over the life of the contract.

x) Taxation : Current Tax :

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

Deferred Tax :

Income tax expense is accrued in accordance with Accounting Standard 22 - Accounting for Taxes on Income, which includes current and deferred taxes. Deferred Income Taxes reflect the impact of timing differences between taxable income & accounting income for the year and reversal/restatement of timing differences of earlier years.

Deferred tax assets and liabilities are measured using the tax rate and tax laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax assets are recognized for all reversible timing differences, carry forward of unused tax assets and unused tax losses subject to consideration of prudence. Carrying amount of deferred tax assets is reviewed at each balance sheet date on the same consideration.

xi) Employee Benefits :

a. Defined Contribution Plan

Provident Fund, Family Pension Fund - Contribution as per the Employees'' Provident Funds and Miscellaneous Provisions Act, 1952 towards Provident Fund and Family Pension Fund are provided for and payments in respect thereof are made to the relevant authorities on actual basis.

Superannuation - The Company''s Superannuation Scheme is administered by Life Insurance Corporation of India (LIC).The company has made contributions towards the said scheme for certain employees of the company. The scheme has since then been discontinued.

b. Defined Benefit Plan

Gratuity - In accordance with applicable laws, the Company provides for gratuity, a defined benefit retirement plan ("Gratuity Plan") covering all employees. The company has an employees'' gratuity fund managed by the Life Insurance Corporation of India ("LIC").The Gratuity Plan provides a lump sum payment to vested employees, at retirement or termination of employment, an amount based on the respective employee''s last drawn basic salary and the years of employment with the Company. Liability with regard to Gratuity Plan is accrued based on actuarial valuation at the Balance Sheet date, carried out by an independent actuary. Actuarial gain or loss is recognized immediately in the Statement of Profit and loss as income or expense.

c. Compensated Absences

The employees are entitled to accumulate leave subject to certain limits, for the future availment. Encashment of leave is given as per the management discretion.

xii) Product Warranties : Product Warranty costs are provided in the year of sale based on past experience.

xiii) Voluntary Employees Separation Scheme :

Based on the effective acceptance of the application under "Voluntary Employees Separation Scheme" (VESS), payment of ex-gratia under VESS is charged to Statement of Profit & Loss.

xiv) Leases

Payments under operating leases are recognized in the Statement of Profit and Loss as Rent.

xv) Impairment of Assets :

If internal/external indications suggest that an asset of the company may be impaired, the recoverable amount of asset/cash generating unit is determined on the Balance Sheet date and if it is less than its carrying amount, the carrying amount of the asset/cash generating unit is reduced to the said recoverable amount. The recoverable amount is measured as the higher of net selling price and value in use of such assets/cash generating unit, which is determined by the present value of the estimated future Cash Flows.

xvi) Provisions, Contingent Liabilities and Contingent Assets :

a) The Company recognizes as Provisions, the liabilities being present obligations arising out of past events, the settlement of which is expected to result in an outflow of resources and which can be measured only by using a substantial degree of estimation.

b) Contingent Liability is disclosed, unless the possibility of an outflow of resources is remote.

c) Contingent Assets are not recognized nor disclosed.


Mar 31, 2013

I) Basis of Preparation :

The financial statements are prepared on the basis of going concern, under historical cost convention and on accrual basis of accounting and in compliance with the Accounting Standards prescribed by the Central Government under the Companies (Accounting Standards) Rules, 2006 and the relevant provisions of the Companies Act, 1956, to the extent applicable. Claims against the company are recognized when finally accepted by the company.

ii) Use of Estimates:

The preparation of the financial statements, in conformity with generally accepted accounting principles, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses and disclosure of contingent liabilities at the date of the financial statements. Actual results could differ from those estimates. Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. Any revision to the accounting estimates is recognized prospectively.

iii) Classification of Assets and Liabilities :

Assets and Liabilities are classified as current/non-current, considering inter-alia, expected realization/settlement in the Company''s normal operating cycle of six/seven months or a period of twelve months from the Balance sheet date.

iv) Fixed Assets :

Fixed Assets (Tangible & Intangible, except trademarks), are carried at the cost of acquisition or at appropriate cost of fabrication (including excise duty wherever applicable) in case of in-house fabricated tangible assets, after reducing CENVAT credit thereon, wherever applicable, less accumulated depreciation and amortization. Trademarks are carried at their cost of registration less amortisation.

Cost directly attributable to bringing the assets to their working condition for intended use, are capitalized. Such costs include appropriate cost of borrowing in respect of assets other than those which are ready for their intended use upon acquisition.

v) Depreciation and Amortisation :

(a) Leasehold Land

Premium on leasehold land is amortised over the period of lease.

(b) Other Assets

Depreciation has been provided as prescribed by Schedule XIV of the Companies Act, 1956 on Straight Line Method on Tangible Assets. Intangible Assets are amortized over their estimated useful life.

Assets costing less than Rs. 5000/- each, acquired during the financial year, are being fully written off.

vi) Inventories :

a) Raw materials, Stores and Spares and Packing materials are valued at the lower of cost and net realizable value on First In First Out basis.

b) Finished goods (manufactured) and Work-in-progress are valued at the lower of cost and net realizable value on First In First Out basis. Cost includes direct materials cost, direct labour cost, other relevant overheads, including applicable duties and levies.

c) Finished goods (traded) are valued at the lower of cost (inclusive of freight and octroi) and net realizable value on First In First Out basis.

vii) Revenue Recognition :

Local sales are recognized on dispatch of goods to the customers and are reflected in accounts at the gross realizable value, i.e. inclusive of excise duty, sales-tax and other levies, wherever applicable, less returns.

viii) Import Duty Benefits :

Goods imported for trading and eligible for refund of Special Additional Duty of Custom are accounted net of such benefit. ix) Foreign Currency Transactions :

a) Foreign currency transactions during the year are accounted at the spot rate prevailing on the date of respective transaction.

b) Difference between the spot rate prevailing on the date of transaction and the exchange rate at which the liability is settled is recognized in the Statement of Profit & Loss. Foreign currency transactions outstanding at the close of the financial year are restated at the spot rate prevailing at the close of the financial year. Loss or gain due to such restatement is recognized in the Statement of Profit & Loss.

c) In case of forward exchange contracts, the difference i.e. premium or discount, between the forward rate and exchange rate on the date of the transaction is recognized as expense or income over the life of the contract.

x) Taxation : Current Tax :

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

Deferred Tax :

Income tax expense is accrued in accordance with Accounting Standard 22 - Accounting for Taxes on Income, which includes current and deferred taxes. Deferred Income Taxes reflect the impact of timing differences between taxable income & accounting income for the year and reversal/restatement of timing differences of earlier years. Deferred tax assets and liabilities are measured using the tax rate and tax laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax assets are recognized for all reversible timing differences, carry forward of unused tax assets and unused tax losses subject to consideration of prudence. Carrying amount of deferred tax assets is reviewed at each balance sheet date on the same consideration.

xi) Employee Benefits :

a. Defined Contribution Plan

Provident Fund, Family Pension Fund - Contribution as per the Employees'' Provident Funds and Miscellaneous Provisions Act, 1952 towards Provident Fund and Family Pension Fund are provided for and payments in respect thereof are made to the relevant authorities on actual basis.

Superannuation - The Company''s Superannuation Scheme is administered by Life Insurance Corporation of India (LIC). The company has made contributions towards the said Scheme for certain employees of the Company.

b. Defined Benefit Plan

Gratuity - In accordance with applicable laws, the Company provides for gratuity, a defined benefit retirement plan ("Gratuity Plan") covering all employees. The company has an employees'' gratuity fund managed by the Life Insurance Corporation of India ("LIC").The Gratuity Plan provides a lump sum payment to vested employees, at retirement or termination of employment, an amount based on the respective employee''s last drawn basic salary and the years of employment with the Company. Liability with regard to Gratuity Plan is accrued based on actuarial valuation at the Balance Sheet date, carried out by an independent actuary. Actuarial gain or loss is recognized immediately in the Statement of Profit and Loss as income or expense.

c. Compensated Absences

The employees are entitled to accumulate leave subject to certain limits, for the future availment. Encashment of leave is given as per the management discretion.

xii) Product Warranties :

Product Warranty costs are provided in the year of sale based on past experience. xiii) V oluntary Employees Separation Scheme :

Based on the effective acceptance of the application under "Voluntary Employees Separation Scheme" (VESS), payment of ex-gratia under VESS is charged to Statement of Profit & Loss.

xiv) Leases

Payments under operating leases are recognized in the Statement of Profit and Loss as Rent.

xv) Impairment of Assets :

If internal/external indications suggest that an asset of the Company may be impaired, the recoverable amount of asset/ cash generating unit is determined on the Balance Sheet date and if it is less than its carrying amount, the carrying amount of the asset/cash generating unit is reduced to the said recoverable amount. The recoverable amount is measured as the higher of net selling price and value in use of such assets/cash generating unit, which is determined by the present value of the estimated future Cash Flows.

xvi) Provisions, Contingent Liabilities and Contingent Assets :

a) The Company recognizes as Provisions, the liabilities being present obligations arising out of past events, the settlement of which is expected to result in an outflow of resources and which can be measured only by using a substantial degree of estimation.

b) Contingent Liability is disclosed, unless the possibility of an outflow of resources is remote.

c) Contingent Assets are not recognized nor disclosed.


Mar 31, 2012

I) Basis of accounting :

The financial statements are prepared on the basis of going concern, under historical cost convention and on accrual basis of accounting. Claims raised against the company are accounted as and when the claims are finally accepted by the company after due verification.

ii) Classification of Assets and Liabilities:

Assets and Liabilities are classified as current/non-current, considering inter-alia, expected realization/settlement in the Company's normal operating cycle of six months or a period of twelve months from the Balance sheet date.

iii) Fixed Assets:

Fixed Assets are carried at the cost of acquisition or at appropriate cost of fabrication (including excise duty wherever applicable) in case of in-house fabricated assets, after reducing Cenvat credit thereon, wherever applicable, less accumulated depreciation and amortization.

Cost directly attributable to bringing the assets to their working condition for intended use, are capitalized. Such costs include appropriate cost of borrowing in respect of assets other than those which are ready for their intended use upon acquisition.

iv) Depreciation and Amortization :

(a) Leasehold Land

Premium on leasehold land is a mortised over the period of lease.

(b) Other Assets

Depreciation on assets acquired prior to 2nd April, 1987 is provided at the rates corresponding to the rates applicable under the Income-tax Rules in force at the time of acquisition/purchase of assets.

Depreciation on assets acquired after 2nd April,1987 but before 16th December, 1993 is provided on straight line method as per Section 205 (2)(b) of the Companies Act, 1956 at the rates and in the manner specified in Schedule XIV of the Companies Act, 1956 prevailing at that time.

Depreciation on addition of items of assets, specified in Notification No.GSR 756 (E) dated 16th December, 1993, and Circular No. 14/93 (No.l/12/92-CL.V) dated 20th December, 1993 issued by the Ministry of Law, Justice and Company Affairs, Department of Company Affairs, and acquired on or after 16th December, 1993, is being provided on straight line method as per Section 205 (2) (b) of the Companies Act, 1956 at the rates and in the manner specified in the Schedule XIV of the Companies Act, 1956, read with the Notification and Circular.

Assets costing less than Rs.5000/- each, acquired during the financial year, are being fully written off.

v) Inventories:

a) Raw materials, Stores and Spares and Packing materials are valued at the lower of cost and net realizable value on First In First Out basis.

b) Finished goods (manufactured) and Work-in-progress are valued at the lower of cost and net realizable value on First In First Out basis. Cost includes direct materials cost, direct lab our cost, other relevant overheads, including applicable duties and levies.

c) Finished goods (traded) are valued at the lower of cost (inclusive of freight and octroi) and net realizable value on First In First Out basis.

vi) Sales:

a) Local sales are recognized on dispatch of goods to the customers and are reflected in accounts at the gross realizable value, i.e. inclusive of excise duty, sales-tax and other levies, wherever applicable, less returns.

b) Job work charges are recognized upon completion of relative jobs.

vii) Import Duty Benefits:

Goods imported for trading and eligible for refund of Special Additional Duty of Custom are accounted net of such benefit.

viii) Foreign Currency Transactions:

a) Foreign currency transactions during the year are accounted at the spot rate prevailing on the date of respective transaction.

b) Difference between the spot rate prevailing on the date of transaction and the exchange rate at which the liability is settled is recognized in the Profit & Loss Account. Foreign currency transactions outstanding at the close of the financial year are restated at the spot rate prevailing at the close of the financial year. Loss or gain due to such restatement are recognized in the Profit & Loss Account.

c) In case of forward exchange contracts, the difference i.e. premium or discount, between the forward rate and exchange rate on the date of the transaction is recognized as expense or income over the life of the contract.

ix) Taxation:

Current Tax:

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

Deferred Tax:

Income tax expense is accrued in accordance with Accounting Standard 22 - Accounting for Taxes on Income, which includes current and deferred taxes. Deferred Income Taxes reflect the impact of timing differences between taxable income & accounting income for the year and reversal/restatement of timing differences of earlier years.

Deferred tax assets and liabilities are measured using the tax rate and tax laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax assets are recognized for all reversible timing differences, carry forward of unused tax assets and unused tax losses subject to consideration of prudence. Carrying amount of deferred tax assets is reviewed at each balance sheet date on the same consideration.

x) Employee Benefits:

a. Defined Contribution Plan

Provident Fund, Family Pension Fund - Contribution as per the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 towards Provident Fund and Family Pension Fund are provided for and payments in respect thereof are made to the relevant authorities on actual basis.

Superannuation - The Company's Superannuation Scheme is administered by Life Insurance Corporation of India (LIC). The company has made contributions towards the said Scheme for certain employees of the Company.

b. Defined Benefit Plan

Gratuity - In accordance with applicable laws, the Company provides for gratuity, a defined benefit retirement plan ("Gratuity Plan") covering all employees. The company has an employees' gratuity fund managed by the Life Insurance Corporation of India ("LIC").The Gratuity Plan provides a lump sum payment to vested employees, at retirement or termination of employment, an amount based on the respective employee's last drawn salary and the years of employment with the Company. Liability with regard to Gratuity Plan is accrued based on actuarial valuation at the Balance Sheet date, carried out by an independent actuary. Actuarial gain or loss is recognized immediately in the statement of profit and loss as income or expense.

c. Compensated Absences

The employees are entitled to accumulate leave subject to certain limits, for the future a ailment. Encashment of leave is given as per the management discretion.

xi) Product Warranties:

Product Warranty costs are provided in the year of sale based on past experience.

xii) Voluntary Employees Separation Scheme:

Based on the effective acceptance of the application under "Voluntary Employees Separation Scheme" (VESS),payment of ex-gratia under VESS is charged to Profit & Loss Account.

xiii) Leases

Payments under operating leases are recognized in the Profit and Loss Account as Rent.

xiv) Impairment of Assets:

If internal/external indications suggest that an asset of the company may be impaired, the recoverable amount of asset/ cash generating unit is determined on the Balance Sheet date and if it is less than its carrying amount, the carrying amount of the asset/cash generating unit is reduced to the said recoverable amount. The recoverable amount is measured as the higher of net selling price and value in use of such assets/cash generating unit, which is determined by the present value of the estimated future Cash Flows.

xv) Provisions, Contingent Liabilities and Contingent Assets:

a) The Company recognizes as Provisions, the liabilities being present obligations arising out of past events, the settlement of which is expected to result in an outflow of resources and which can be measured only by using a substantial degree of estimation.

b) Contingent Liability is disclosed, unless the possibility of an outflow of resources is remote.

c) Contingent Assets are not recognized nor disclosed.


Mar 31, 2011

I) Basis of accounting :

The financial statements are prepared on the basis of going concern, under historical cost convention and on accrual basis of accounting. Claims raised against the company are accounted as and when the claims are finally accepted by the company after due verification.

ii) Fixed Assets:

Fixed Assets are carried at the cost of acquisition or at appropriate cost of fabrication (including excise duty wher- ever applicable) in case of in-house fabricated assets, after reducing Cenvat credit thereon, wherever applicable, less accumulated depreciation and amortization (except Freehold land).

Cost directly attributable to bringing the assets to their working condition for intended use, are capitalized. Such costs include appropriate cost of borrowing in respect of assets other than those which are ready for their intended use upon acquisition.

iii) Depreciation and Amortisation (Except Freehold land):

(a) Leasehold Land

Premium on leasehold land is amortised over the period of lease.

(b) Other Assets

Depreciation on assets acquired prior to 2nd April, 1987 is provided at the rates corresponding to the rates applicable under the Income-tax Rules in force at the time of acquisition/purchase of assets. Depreciation on assets acquired after 2nd April,1987 but before 16th December, 1993 is provided on straight line method as per Section 205 (2)(b) of the Companies Act, 1956 at the rates and in the manner specified in Schedule XIV of the Companies Act, 1956 prevailing at that time.

Depreciation on addition of items of assets, specified in Notification No.GSR 756 (E) dated 16th December, 1993, and Circular No.14/93 (No.l/12/92-CL.V) dated 20th December, 1993 issued by the Ministry of Law, Justice and Company Affairs, Department of Company Affairs, and acquired on or after 16th December, 1993, is being provided on straight line method as per Section 205 (2) (b) of the Companies Act, 1956 at the rates and in the manner specified in the Schedule XIV of the Companies Act, 1956, read with the Notification and Circular. Assets costing less than Rs.5000/- each, acquired during the financial year, are being fully written off.

iv) Inventories:

a) Raw materials, Stores and Spares and Packing materials are valued at the lower of cost and net realizable value on First In First Out basis.

b) Finished goods (manufactured) and Work-in-progress are valued at the lower of cost and net realizable value on First In First Out basis. Cost includes direct materials cost, direct labour cost, other relevant overheads. Cost also includes applicable duties and levies.

c) Finished goods (traded) are valued at the lower of cost (inclusive of freight and octroi) and net realizable value on First In First Out basis.

v) Sales:

a) Local sales are recognized on dispatch of goods to the customers and are reflected in accounts at the gross realizable value, i.e. inclusive of excise duty, sales-tax and other levies, wherever applicable, less returns.

b) Job work charges are recognized upon completion of relative jobs.

vi) Foreign Currency Transactions:

a) Foreign currency transactions during the year are accounted at the spot rate prevailing on the date of respective transaction.

b) Difference between the spot rate prevailing on the date of transaction and the exchange rate at which the liability is settled is recognized in the Profit & Loss Account. Foreign currency transactions outstanding at the close of the financial year are restated at the spot rate prevailing at the close of the financial year. Loss or gain due to such restatement are recognized in the Profit & Loss Account.

c) In case of forward exchange contracts, the difference i.e. premium or discount, between the forward rate and exchange rate on the date of the transaction is recognized as expense or income over the life of the contract.

vii) Taxation:

Current Tax:

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

Deferred Tax:

Income tax expense is accrued in accordance with Accounting Standard 22 - Accounting for Taxes on Income, which includes current and deferred taxes. Deferred Income Taxes reflect the impact of timing differences between taxable income & accounting income for the year and reversal/restatement of timing differences of earlier years. Deferred tax assets and liabilities are measured using the tax rate and tax laws that have been enacted or substan- tively enacted by the balance sheet date.

Deferred tax assets are recognized for all reversible timing differences, carry forward of unused tax assets and unused tax losses subject to consideration of prudence. Carrying amount of deferred tax assets is reviewed at each balance sheet date on the same consideration.

viii) Employee Benefits:

a. Defined Contribution Plan

Provident Fund, Family Pension Fund - Contribution as per the Employees Provident Funds and Miscella- neous Provisions Act, 1952 towards Provident Fund and Family Pension Fund are provided for and payments in respect thereof are made to the relevant authorities on actual basis.

Superannuation - The Companys Superannuation Scheme is administered by Life Insurance Corporation of India (LIC). The company has made contributions towards the said Scheme for certain employees of the Company.

b. Defined Benefit Plan

Gratuity - In accordance with applicable laws, the Company provides for gratuity, a defined benefit retire- ment plan ("Gratuity Plan") covering all employees. The company has an employees gratuity fund managed by the Life Insurance Corporation of India ("LIC").The Gratuity Plan provides a lump sum payment to vested employees, at retirement or termination of employment, an amount based on the respective employees last drawn salary and the years of employment with the Company. Liability with regard to Gratuity Plan is accrued based on actuarial valuation at the Balance Sheet date, carried out by an independent actuary. Actuarial gain or loss is recognized immediately in the statement of profit and loss as income or expense.

c. Compensated Absences

The employees are entitled to accumulate leave subject to certain limits, for the future availment. Encashment of leave is given as per the management discretion.

ix) Product Warranties:

Product Warranty costs are provided in the year of sale based on past experience. x) Voluntary Employees Separation Scheme:

Based on the effective acceptance of the application under "Voluntary Employees Separation Scheme" (VESS),payment of ex-gratia under VESS is charged to Profit & Loss Account.

xi) Leases

Payments under operating leases are recognized in the Profit and Loss Account as Rent.

xii) Impairment of Assets:

If internal/external indications suggest that an asset of the company may be impaired, the recoverable amount of asset/cash generating unit is determined on the Balance Sheet date and if it is less than its carrying amount, the carrying amount of the asset/cash generating unit is reduced to the said recoverable amount. The recoverable amount is measured as the higher of net selling price and value in use of such assets/cash generating unit, which is determined by the present value of the estimated future Cash Flows.

xiii) Provisions, Contingent Liabilities and Contingent Assets:

a) The Company recognizes as Provisions, the liabilities being present obligations arising out of past events, the settlement of which is expected to result in an outflow of resources and which can be measured only by using a substantial degree of estimation.

b) Contingent Liability is disclosed, unless the possibility of an outflow of resources is remote.

c) Contingent Assets are not recognized nor disclosed.


Mar 31, 2010

The financial statements are prepared on the basis of going concern, under historical cost convention and on accrual basis of accounting. Claims raised against the company are accounted as and when the claims are finally accepted by the company after due verification.

ii) Fixed Assets:

Fixed Assets are carried at the cost of acquisition or at appropriate cost of fabrication (including excise duty wher- ever applicable) in case of in-house fabricated assets, after reducing Cenvat credit thereon, wherever applicable, less accumulated depreciation and amortization (except Freehold land).

Cost directly attributable to bringing the assets to their working condition for intended use, are capitalized. Such costs include appropriate cost of borrowing in respect of assets other than those which are ready for their intended use upon acquisition.

iii) Depreciation and Amortisation (Except Freehold land):

(a) Leasehold Land

Premium on leasehold land is amortised over the period of lease.

(b) Other Assets

Depreciation on assets acquired prior to 2nd April, 1987 is provided at the rates corresponding to the rates applicable under the Income-tax Rules in force at the time of acquisition/purchase of assets. Depreciation on assets acquired after 2nd April,1987 but before 16th December, 1993 is provided on straight line method as per Section 205 (2)(b) of the Companies Act, 1956 at the rates and in the manner specified i Schedule XIV of the Companies Act, 1956 prevailing at that time. Depreciation on addition of items of assets, specified in Notification No.GSR 756 (E) dated 16th December, 1993, and Circular No. 14/93 (No.l/12/92-CL.V) dated 20th December, 1993 issued by the Ministry of Law, Justice and Company Affairs, Department of Company Affairs, and acquired on or after 16th December, 1993, is being provided on straight line method as per Section 205 (2) (b) of the Companies Act, 1956 at the rates and in the manner specified in the Schedule XIV of the Companies Act, 1956, read with the Notification and Circular. Assets costing less than Rs.5000/- each, acquired during the financial year, are being fully written off.

iv) Inventories:

a) Raw materials, Stores and Spares and Packing materials are valued at the lower of cost and net realizable value on First In First Out basis.

b) Finished goods (manufactured) and Work-in-progress are valued at the lower of cost and net realizable value on First In First Out basis. Cost includes direct materials cost, direct labour cost, other relevant overheads. Cost also includes applicable duties and levies.

c) Finished goods (traded) are valued at the lower of cost (inclusive of freight and octroi) and net realizable value on First In First Out basis.

v) Sales:

a) Local sales are recognized on dispatch of goods to the customers and are reflected in accounts at the gross realizable value, i.e. inclusive of excise duty, sales-tax and other levies, wherever applicable, less returns.

b) Job work charges are recognized upon completion of relative jobs. vi) Foreign Currency Transactions:

a) Foreign currency transactions during the year are accounted at the spot rate prevailing on the date of respective transaction.

b) Difference between the spot rate prevailing on the date of transaction and the exchange rate at which the liability is settled is recognized in the Profit & Loss Account. Foreign currency transactions outstanding at the close of the financial year are restated at the spot rate prevailing at the close of the financial year. Loss or gain due to such restatement are recognized in the Profit & Loss Account.

c) In case of forward exchange contracts, the difference i.e. premium or discount, between the forward rate and exchange rate on the date of the transaction is recognized as expense or income over the life of the contract.

vii) Taxation: Current Tax:

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

Deferred Tax:

Income tax expense is accrued in accordance with Accounting Standard 22 - Accounting for Taxes on Income, which includes current and deferred taxes. Deferred Income Taxes reflect the impact of timing differences between taxable income & accounting income for the year and reversal/restatement of timing differences of earlier years. Deferred tax assets and liabilities are measured using the tax rate and tax laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax assets are recognized for all reversible timing differences, carry forward of unused tax assets and unused tax losses subject to consideration of prudence. Carrying amount of deferred tax assets is reviewed at each balance sheet date on the same consideration.

viii) Employee Benefits:

a. Defined Contribution Plan

Provident Fund, Family Pension Fund - Contribution as per the Employees Provident Funds and Miscella- neous Provisions Act, 1952 towards Provident Fund and Family Pension Fund are provided for and payments in respect thereof are made to the relevant authorities on actual basis

Superannuation - The Companys Superannuation Scheme is administered by Life Insurance Corporation of India (LIC). The company has made contributions towards the said Scheme for the certain employees of the Company.

b. Defined Benefit Plan

Gratuity - In accordance with applicable laws, the Company provides for gratuity, a defined benefit retire- ment plan ("Gratuity Plan") covering all employees. The Gratuity Plan provides a lump sum payment to vested employees, at retirement or termination of employment, an amount based on the respective employees last drawn salary and the years of employment with the Company. Liability with regard to Gratuity Plan is accrued based on actuarial valuation at the Balance Sheet date, carried out by an independent actuary. Actuarial gain or loss is recognized immediately in the statement of profit and loss as income or expense. The company has an employees gratuity fund managed by the Life Insurance Corporation of India ("LIC").

c. Compensated Absences

The employees are entitled to accumulate leave subject to certain limits, for the future availment. Encashment of leave is given as per the management discretion.

ix) Product Warranties:

Product Warranty costs are provided in the year of sale based on past experience. x) Voluntary Employees Separation Scheme:

Based on the effective acceptance of the application under "Voluntary Employees Separation Scheme" (VESS), payment of ex-gratia under VESS is charged to Profit & Loss Account

xi) Leases

Payments under operating leases are recognized in the Profit and Loss Account as Rent. xii) Impairment of Assets:

If internal/external indications suggest that an asset of the company may be impaired, the recoverable amount of asset/cash generating unit is determined on the Balance Sheet date and if it is less than its carrying amount, the carrying amount of the asset/cash generating unit is reduced to the said recoverable amount. The recoverable amount is measured as the higher of net selling price and value in use of such assets/cash generating unit, which is determined by the present value of the estimated future Cash Flows.

xiii) Provisions, Contingent Liabilities and Contingent Assets: ,

a) The Company recognizes as Provisions, the liabilities being present obligations arising out of past events, the settlement of which is expected to result in an outflow of resources and which can be measured only by using a substantial degree of estimation.

b) Contingent Liability is disclosed, unless the possibility of an outflow of resources is remote.

c) Contingent Assets are not recognized nor disclosed.

 
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