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Accounting Policies of Samtel Color Ltd. Company

Mar 31, 2015

(A) Accounting Conventions

The financial statement has been prepared in accordance with the historical cost convention, accounting standards issued vide Companies (Accounting Standard), Rules 2006, as prescribed under section 133 of the Companies Act 2013 read with rule 7 of Companies (Accounts) Rules, 2014 and other relevant provisions of the Companies Act, 2013 and earlier years financial statement were prepared as per relevant provisions of the Companies Act, 1956 (refer General circular 08/2014 dated 04/04/2014 of the Ministry of Corporate Affairs for applicability of relevant provisions/ schedules/ rules of the Companies Act, 1956 for the financial statements prepared for the financial year commenced earlier than 01.04.2014) and the provisions of the Companies Act, 2013 (to the extent applicable).

Use of Estimates .

The preparation of financial statements is in conformity with the Generally Accepted Accounting Principles (GAAP), which requires estimates and assumptions to be made that affect the reportable amount of assets and liabilities on the date of financial statements and the reportable amount of revenue and expenses during the reporting period. Difference between the actual results and estimates are recognized in the year in which the results are known /materialized.

(B) FIXED ASSETS

Tangible Assets

i) Fixed assets (other than revalued Plant & Machinery) are stated at their original cost including freight, duties, taxes and other incidental expenses relating to acquisition and installation and are net of credit available under the Excise/Service Tax CENVAT Scheme and Value Added Tax (VAT) where applicable.

ii) Plant and Machinery are stated at revalued amount ascertained by an independent professional valuer as at 1st October' 2010.

iii) Pre-Operative expenditure including borrowing cost (net of revenue) incurred during the construction / trial run of projects is allocated on an appropriate basis to fixed assets on commissioning.

Intangible Assets

Intangible assets are recognized if:

* It is probable that the future economic benefits that are attributable to the assets will flow to the Company, and

* the cost / fair value (as determined by an independent valuer) of the assets can be measured reliably.

(C) DEPRECION /AMORTISATION

Fixed Assets:

Depreciation on all fixed assets (other than revalued Plant & Machinery) is charged on the straight line method on a pro-rata basis at the rates prescribed under Schedule XIV to the Companies Act, 1956, except for certain fixed assets provided to employees as per the terms of the employment and certain tools, which are depreciated over three to five years based on the useful life to the Company. Where there is a revision of the estimated useful life of an asset, the unamortized depreciable amount is charged over the revised remaining useful life (subject to minimum rates prescribed under Schedule XIV to the Companies Act, 1956).

In respect of revalued Plant and Machinery, the useful life is estimated between 6 years to 20 years, as certified by an independent professional valuer. Depreciation is computed on the revalued amount on remaining useful life of such assets.

Leasehold land is written-off proportionately over the lease period. Leasehold Improvements are written off over the period of primary lease. Capital spares are amortized over the useful life of the principal item.

Intangible Assets:

Goodwill is amortized on a straight line basis over a period of five years.

"Technical Designs / Drawings" and "Software for internal Use" are amortized on a straight line basis over the estimated useful life of the assets which are as under:

* Software for internal use - 3 years

* SAP ERP Package - 5 years

* Technical Designs / Drawings - Useful life of the related Plant and Machinery

(D) INVESTMENTS

Long term investments are stated at cost. However, when there is a decline, other than temporary, in the value of long term investment, an appropriate provision is made to recognize such decline. Current investments are valued at the lower of cost and fair value. '

(E) INVENTORIES

Raw materials and components, stores and spares, loose tools, work-in-process and finished goods are valued at the lower of cost and net realizable value. Cost for this purpose is worked out on a moving weighted average basis. In case of finished goods and work-in-process, appropriate overheads are loaded on absorption costing basis.

Finished goods are stated inclusive of excise duty.

(F) RESEARCH AND DEVELOPMENT (R & D}

i) Revenue expenditure incurred for R & D is charged to the Statement of Profit and Loss.

ii) Fixed Assets purchased for R & D activities are capitalized in the year, the same are put to use.

(G) REVENUE

i) Sales are accounted when dispatched and are stated inclusive of excise duty and net of value added tax, sales tax, trade discount and sales return.

ii) Export incentives are accounted for on an accrual basis.

(H) POST EMPLOYMENT BENEFITS

The Company's contribution to Provident Fund is charged to the Statement of Profit and Loss.

The Company has taken group policies with the Life Insurance Corporation of India (LIC) to cover the liabilities towards the superannuation and gratuity benefits for certain categories of employees. Trustees have been appointed for the purpose of administering the superannuation and gratuity Funds. The Company makes provision for the liability for long term defined benefit schemes of gratuity and leave encashment for all its employees on the basis of actuarial valuation on the Balance Sheet date based on the

Projected Unit Credit Method. The actuarial valuation of the liability towards gratuity is made on the basis of assumptions with respect to the variable elements affecting the computations including estimation of interest rate of earnings on contribution to LIC, discount rate, future salary increment. The Company recognizes the actuarial gains and losses in the Statement of Profit and Loss as income and expense, in the period in which they occur.

(I) FOREIGN CURRENCY TRANSACTIONS

i) Foreign currency transactions are accounted for at the exchange rate prevailing on the transaction date. Monetary assets and Liabilities related to foreign currency transactions which remained unsettled at the end of the year are translated at year-end rates.

ii) The realized and unrealized gains and losses on foreign exchange transactions are recognized in the Statement of Profit and Loss. In case of forward contracts associated with underlying assets outstanding at the Balance Sheet date, the exchange differences on such contracts are recognized in the Statement of Profit and Loss in the reporting period. The premium or discount on all such contracts arising at the inception is amortized as income or expense over the life of the contract.

(J) BORROWING COSTS

i) Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalized as part of the cost of that asset till the date of start of commercial production.

ii) Ancillary costs incurred in connection with the arrangement of borrowings are amortized over the period of the borrowing.

iii) Other borrowing costs are recognized as an expense in the period in which they are incurred,

K) LEASES

As Lessee:

Lease rentals in respect of assets taken on operating lease1 are charged to the Statement of Profit and Loss on a straight line basis over the lease term.

Finance lease transactions entered are considered as financing arrangements and the leased asset is capitalized at an amount equal to the present value of future lease payments and a corresponding amount is recognized as a liability. The lease payments made are apportioned between finance charge and reduction of outstanding liability in relation to leased asset.

(L) TAXES ON INCOME

Current Tax

Provision for taxation is ascertained on the basis of assessable profits computed in accordance with the provision of Income Tax Act, 1961.

Deferred Tax

Deferred tax is recognized, subject to the consideration of prudence, as the tax effect of timing difference between the taxable income and accounting income computed for the current accounting year and reversal of earlier years' timing differences.

Deferred tax assets are recognized and carried forward to the extent that there is a reasonable certainty, except arising from unabsorbed depreciation and carry forward losses which are recognized to the extent that there is virtual certainty, that sufficient future taxable income will be available against which such deferred tax assets can be realized.

(M) WARRANTY

Warranty cost is provided on the basis of average cost of warranty of finished goods lying with the Company at the year end and the estimated future claims expected to be received (based on past experience) within the warranty period.

(N) EMPLOYEE STOCK OPTION BASED COMPENSATION

Stock options granted to the employees who accepted the grant under the Company's Stock Option Plan are accounted in accordance with Securities and Exchange Board of India (Employees Stock Option Scheme) Guidelines, 1999. The Company follows the intrinsic value method and accordingly, the excess, if any, of the market price of the underlying equity shares as of the date of the grant of the option over the exercise price of the option, is recognized as employee compensation cost and amortized on straight line basis over the vesting period.

(O) IMPAIRMENT OF ASSETS

At each balance sheet date, the Company assesses whether there is any indication that any asset may be x-'-x impaired. If any such indication exists, the Company estimates the recoverable amount. If the carrying amount of the assets exceeds the recoverable amount, an impairment loss is recognized in the accounts to the extent the carrying amount exceeds the recoverable amount.

(P) EARNINGS PER SHARE (EPS)

The earnings considered in ascertaining the Company's EPS comprises the net profit aftertax (and includes the post tax effect of any extra ordinary items) attributable to equity shareholders. The number of shares used in computing Basic EPS is the weighted average number of shares outstanding during the year. The Diluted EPS is calculated on the same basis as Basic EPS, after adjusting for the effect of potential dilutive equity shares.

(Q) PROVISIONS AND CONTINGENCIES

A provision is recognized when there is a present obligation, as a result of a past event, it is probable that an outflow of resources will be required to settle the obligation and in respect of which reliable estimate can be made. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

(R) CASH FLOW STATEMENT

Cash Flows are reported using the indirect method, whereby a profit before tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flow from operating, financing and investing activities of the Company is segregated.


Mar 31, 2014

(A) Accounting Conventions

The financial statements are prepared under the historical cost convention on accrual, prudence and in accordance with the requirements of the Companies Act, 1956 and in compliance with the applicable px accounting standards referred to in sub-section (3C) of the Section 211 of the said Act. The accounting

- policies have been consistently applied by the company.

All assets and liabilities have been classified as current & non-current as per the Company''s normal operating cycle and other criteria set out in the Revised Schedule VI of the Companies Act, 1956. Based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained 12 months period for the purpose of current & non- current classification of assets and liabilities being a period higher than the company''s operating cycle.

Use of Estimates

The preparation of financial statements is in conformity with the Generally Accepted Accounting Principles (GAAP), which requires estimates and assumptions to be made that affect the reportable amount of assets and liabilities on the date of financial statements and the reportable amount of revenue and expenses during the reporting period. Difference between the actual results and estimates are recognized in the year in which the results are known /materialized.

(B) FIXED ASSETS

Tangible Assets

i) Fixed assets (other than revalued Plant & Machinery) are stated at their original cost including freight, duties, taxes and other incidental expenses relating to acquisition and installation and are net of credit available under the Excise/Service Tax CENVAT Scheme and Value Added Tax (VAT) where applicable.

Ii) Plant and Machinery are stated at revalued amount ascertained by an independent professional valuer as at Is'' October'' 2010.

iii) Pre-Operative expenditure including borrowing cost (net of revenue) incurred during the construction / trial run of projects is allocated on an appropriate basis to fixed assets on commissioning.

Intangible Assets

Intangible assets are recognized if:

- It is probable that the future economic benefits that are attributable to the assets wiil fiow to the Company, and ''

- the cost / fair value (as determined by an independent valuer) of the assets can be measured reliably.

(C) DEPRECIATION/AMORTISATION

Fixed Assets:

Depreciation on all fixed assets (other than revalued Plant & Machinery) is charged on the straight linemethod on a pro-rata basis at the rates prescribed under Schedule XIV to the Companies Act, 1956, except

for certain fixed assets provided to employees as per the terms of the employment and certain tools, which . are depreciated over three to five years based on the useful life to the Company. Where there is a revision of the estimated useful life of an asset, the unamortized depreciable amount is charged overthe revised remaining useful life (subject to minimum rates prescribed under Schedule''XIV to the Companies Act,1956)

In respect of revalued Plant and Machinery, the'' useful life is estimated between 6 years to 20 years, as '' certified by an independent professional valuer. Depreciation is computed on the revalued amount on

remaining usefullife of such assets.

Leasehold land is written-off proportionately over the lease period. Leasehold Improvements are written off over the period of primary lease. Capital spares are amortized overthe useful life of the principal item.

Intangible Assets:

Goodwill is amortized on a straight line basis over a period of five years

) "Technical Designs / Drawings" and "Software for Internal Use" are amortized on a straight line basis over

the estimated useful life of the assets which are as under:

- Software for internal use-3 years

- SAP ERP Package - 5 years .

-Technical Designs/Drawings - Useful life ofthe related Plant and Machinery

(D) INVESTMENTS

Long term investments are stated at cost. However, when there is a decline, other than temporary, in the value of long term investment, an appropriate provision is made to recognize such decline. Current '' investments are valued at the lower of cost and fair value. (E) INVENTORIES

Raw materials and components, stores and spares, loose tools, work-in-process and finished goods are

valued at the lower of cost and net realizable value. Cost for this purpose is worked out on a moving.

weighted average basis. In ease of finished goods and work-in-process, appropriate overheads are loaded on absorption costing basis.

Finished goods are stated inclusive of excise duty.

(F) RESEARCH AND DEVELOPMENT (R&D)

i) Revenue expenditure incurred for R & D is charged to the Statement of Profit and Loss.

ii) Fixed Assets purchased for R & D activities are capitalized in the year, the same are put to use.

(G) REVENUE

i) Sales are accounted when dispatched and are stated inclusive of excise duty and net of value added tax, sales tax, trade discount and sales return.

ii) Export incentives are accounted for on an accrual basis.

(H) POST EMPLOYMENT BENEFITS

The Company''s contribution to Provident Fund is charged to the Statement of Profit and Loss.

The Company has taken group policies with the Life Insurance Corporation of India (LIC) to cover theliabilities towards the superannuation and gratuity benefits for certain categories of employees. Trustees

have been appointed for the purpose of administering the superannuation and gratuity Funds. The '' Company makes provision for the liability for long term defined benefit schemes of gratuity and leave

encashment for all its employees on the basis of actuarial valuation on the Balance Sheet date based''on the . Projected Unit Credit Method. The actuarial valuation of the liability towards gratuity is made on the basis of assumptions with respect to the variable elements affecting the computations including estimation of

interest rate of earnings on contribution to LIC, discount rate, future salary increment; The Company recognizes the actuarial gains and losses in the Statement of Profit and Loss as income and expense, in the period in which they occur. .

(I) FOREIGN CURRENCY TRANSACTIONS

i) Foreign currency transactions are accounted for at the exchange rate prevailing on the transaction date. Monetary assets and Liabilities related to foreign currency transactions which remained unsettled at the end of the year are translated at year-end rates.

ii) The realized and unrealized gains and losses on foreign exchange transactions are recognized in the Statement of Profit and Loss. In case of forward contracts associated with underlying assets outstanding at the Balance Sheet date, the exchange differences on such contracts are recognized in the Statement of Profit and Loss in the reporting period. The premium or discount on all such contracts arising at the inception is amortized as income or expense over the life of the contract.

(J) BORROWING COSTS .

i) Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalized as part of the cost of that asset till the date of start of commercial production

ii) Ancillary costs incurred in connection with the arrangement of borrowings are amortized over the period

of the borrowing.

iii) Other borrowing costs are recognized as an expense in the period in which they are incurred. .

(K) LEASES As Lessee:

Lease rentals in respect of assets taken on ''operating lease'' are charged to the Statement of Profit and Loss

) on a straight line basis over the lease term. .

Finance lease transactions entered are considered as financing arrangements and the leased asset is capitalized at an amount equal to the present value of future lease payments and a corresponding amount is recognized as a liability. The lease payments made are apportioned between finance charge and '' reduction of outstanding liability in relation to leased asset.

(L) TAXES ON INCOME Current Tax

Provision for taxation is ascertained on the basis of assessable profits computed in accordance with the provision of Income Tax Act, 1961.

Deferred Tax .

Deferred tax is recognized, subject to the consideration of prudence, as the tax effect of timing difference between the taxable income and accounting income computed for the current accounting year and reversal of earlier years'' timing differences.

Deferred tax assets are recognized and carried forward to the extent that there is a reasonable certainty, except arising from unabsorbed depreciation and carry forward losses which are recognized to the extent that there is virtual certainty, that sufficient future taxable income will be available against which such deferred tax assets can be realized.

(M) WARRANTY

Warranty cost is provided on the basis of average cost of warranty of finished goods lying with the Company at the year end and the estimated future claims expected to be received (based on past experience) within the warranty period. . - -

(N) EMPLOYEE STOCK OPTION BASED COMPENSATION

Stock options granted to the employees who accepted the grant under the Company''s Stock Option Plan

are accounted in accordance with Securities and Exchange Board of India (Employees Stock Option Scheme).

Guidelines, 1999. The Company follows the intrinsic value method and accordingly, the excess, if any, of the market price of the underlying equity shares as of the date of the grant of the option over the exercise price of the option, is recognized as employee compensation cost and amortized on straight line basis over the vesting period. ''

(O) IMPAIRMENT OF ASSETS

At each balance sheet date, the Company assesses whether there is any indication that any asset may be impaired. If any such indication exists, the Company estimates the recoverable amount. If the carrying . amount of the assets exceeds the recoverable amount, an impairment loss is recognized in the accounts ^ to the extent the carrying amount exceeds the recoverable amount.

(P) EARNINGS PER SHARE (EPS)

The earnings considered in ascertaining the Company''s EPS comprises the net profit aftertax (and includes the post tax effect of any extra ordinary items) attributable to equity shareholders. The number of shares used in computing Basic EPS is the weighted average number of shares outstanding during the year. The Diluted EPS is calculated on the same basis as Basic EPS, after adjusting for the effect of potential dilutive equity shares,

(Q) PROVISIONS AND CONTINGENCIES

A provision is recognized when there is a present obligation, as a result of a past event, it is probable that an outflow of resources will be required to settle the obligation and in respect of which reliable estimate can be made. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no '' provision or disclosure is made.

(R) CASH FLOW STATEMENT

Cash Flows are reported using the indirect method, whereby a profit before tax is adjusted for the effects of transactions of non-cash nature and ariy deferrals or accruals of past or future cash receipts or payments. The cash flow from operating, financing and investing activities of the Company is segregated.


Mar 31, 2013

[A} Accounting Conventions

The financial statements are prepared under the historical cost convention on accrual, prudence and in accordance with the requirements of the Companies Act, 1956 and in compliance with the applicable accounting standards referred to in sub-section (3C) of the Section 211 of the said Act. The accounting -.. policies have been consistently applied by the company.

All assets and liabilities have been classified as current & non-current as per the Company''s normal operating cycle and other criteria set out in the Revised Schedule VI of the Companies Act, 1956. Based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained 12 months period for the purpose of current & non- current classification of assets and liabilities being a period higher than the company''s operating cycle.

Use of Estimates

The preparation of financial statements is in conformity with the Generally Accepted Accounting Principles (GAAP); which requires estimates and assumptions to be made that affect the reportable amount of assets and liabilities on the date of financial statements and the reportable amount of revenue and expenses during the reporting period. Difference between the actual results and estimates are recognized in the year in which the results are known /materialized.

(B} FIXED ASSETS

-i Tangible Assets

i) Fixed assets {other than revalued Plant & Machinery) are stated at their original cost including freight, duties, taxes and other incidental expenses relating to acquisition and installation and are net of credit available under the Excise/Service Tax CENVAT Scheme and Value Added Tax (VAT) where applicable.

ii] Plant and Machinery are stated at revalued amount ascertained by an independent professional valuer as at 1st October''2010.

iii) Pre-Operative expenditure including borrowing cost (net of revenue) incurred during the construction / trial run of projects is allocated on an appropriate basis to fixed assets on commissioning,

Intangible Assets

Intangible assets are recognized if:

- It is probable that the future economic benefits that are attributable to the assets will flow to the Company, and

-the cost/fair value (as determined by an independent valuer) of the assets can be measured reliably.

(C) DEPRECIATION/AMORTISATION

Fixed Assets:

Depreciation on all fixed assets (other than revalued Plant & Machinery} is charged on the straight line method on a pro-rata basis at the rates prescribed under Schedule XIV to the Companies Act, 1956, except for certain fixed assets provided to employees as per the terms of the employment and certain tools, which are depreciated over three to five years based on the useful life to the Company. Where there is a revision of the estimated useful life of an asset, the unamortized depreciable amount is charged over the revised remaining useful life (subject to minimum rates prescribed under Schedule XIV to the Companies Act, 1956),

In respect of revalued Plant and Machinery, the useful life is estimated between 6 years to 20 years, as certified by an independent professional valuer. Depreciation is computed on the revalued amount on remaining useful life of such assets.

Leasehold land is written-off proportionately over the lease period. Leasehold Improvements are written off over the period of primary lease. Capital spares are amortized over the useful life of the principal item.

Intangible Assets:

Goodwill is amortized on a straight line basis over a period of five years.

) "Technical Designs / Drawings" and "Software for Internal Use" are amortized on a straight line basis over the estimated useful iife of the assets which are as under:

- Software for internal use - 3 years

- SAP ERP Package - 5 years

- Technical Designs / Drawings - Useful iife of the related Plant and Machinery

{D) INVESTMENTS

Long term investments are stated at cost. However, when there is a decline, other than temporary, in the value of long term investment, an appropriate provision is made to recognize such decline. Current investments are valued at the lower of cost and fair value.

(E) INVENTORIES

Raw materials and components, stores and spares, loose toofs, work-in-process and finished goods are valued at the lower of cost and net realizable value. Cost for this purpose is worked out on a moving weighted average basis. In case of finished goods and work-in-process, appropriate overheads are loaded on absorption costing basis.

Finished goods are stated inclusive of excise duty.

(F) RESEARCH AND DEVELOPMENT (R&D)

i) Revenue expenditure incurred for R & D is charged to the Statement of Profit and Loss.

ii) Fixed Assets purchased for R & D activities are capitalized in the year, the same are put to use.

(G) REVENUE

i) Saies are accounted when dispatched and are stated inclusive of excise duty and net of value added tax, sales tax, trade discount and sales return.

ii) Export incentives are accounted for on an accrual basis.

(H} POST EMPLOYMENT BENEFITS

The Company''s contribution to Provident Fund is charged to the Statement of Profit and Loss.

The Company has taken group policies with the Life Insurance Corporation of India (LIC} to cover the liabilities towards the superannuation and gratuity benefits for certain categories of employees. Trustees have been appointed for the purpose of administering the superannuation and gratuity Funds. The Company makes provision for the liability for long term defined benefit schemes of gratuity and feave encashment for ali its employees on the basis of actuarial valuation on the Balance Sheet date based on the Projected Unit Credit Method. The actuarial valuation of the liability towards gratuity is made on the basis of assumptions with respect to the variable elements affecting the computations including estimation of interest rate of earnings on contribution to LIC, discount rate, future salary increment. The Company recognizes the actuarial gains and Josses in the Statement of Profit and Loss as income and expense, in the period in which they occur.

(I) FOREIGN CURRENCY TRANSACTIONS

i) Foreign currency transactions are accounted for at the exchange rate prevailing on the transaction date, Monetary assets and Liabilities related to foreign currency transactions which remained unsettled at the end of the year are translated at year-end rates.

ii) The realized and unrealized gains and losses on foreign exchange transactions are recognized in the Statement of Profit and Loss. In case of forward contracts associated with underlying assets outstanding at the Balance Sheet date, the exchange differences on such contracts are recognized in the Statement of Profit and Loss in the reporting period. The premium or discount on all such contracts arising at the inception is amortized as income or expense over-heJife of the contract,

(J) BORROWING COSTS

i) Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalized as part of the cost of that asset till the date of start of commercial production.

ii) Ancillary costs incurred in connection with the arrangement of borrowings are amortized over the period of the borrowing.

iii) Other borrowing costs are recognized as an expense in the period in which they are incurred.

(K) LEASES

As Lessee:

Lease rentals in respect of assets taken on ''operating lease'' are charged to the Statement of Profit and Loss '' ) on a straight line basis over the lease term.

Finance lease transactions entered are considered as financing arrangements and the leased asset is capitalized at an amount equal to the present value of future [ease payments and a corresponding amount is recognized as a liability. The Jease payments made are apportioned between finance charge and reduction of outstanding liability in relation to leased asset.

(L) TAXES ON INCOME

Current Tax

Provision for taxation is ascertained on the basis of assessable profits computed in accordance with the provision of Income Tax Act, 1961.

Deferred Tax

Deferred tax is recognized, subject to the consideration of prudence, as the tax effect of timing difference between the taxable income and accounting income computed for the current accounting year and reversal of earlier years'' timing differences.

Deferred tax assets are recognized and carried forward to the extent that there is a reasonable certainty, except arising from unabsorbed depreciation and carry forward losses which are recognized to the extent that there is virtual certainty, that sufficient future taxable income will be available against which such deferred tax assets can be realized.

{M) WARRANTY

Warranty cost is provided on the basis of average cost of warranty of finished goods iying with the Company at the year end and the estimated future claims expected to be received (based on past experience) within the warranty period.

[N) EMPLOYEE STOCK OPTION BASED COMPENSATION

Stock options granted to the employees who accepted the grant under the Company''s Stock Option Plan are accounted in accordance with Securities and Exchange Board of India (Employees Stock Option Scheme) Guidelines, 1999. The Company follows the intrinsic value method and accordingly, the excess, if any, of the market price of the underlying equity shares as of the date of the grant of the option over the exercise price of the option, is recognized as employee compensation cost and amortized on straight line basis over the vesting period.

(0) IMPAIRMENT OF ASSETS

At each balance sheet date, the Company assesses whether there is any indication that any asset may be impaired. If any such indication exists, the Company estimates the recoverable amount. If the carrying amount of the assets exceeds the recoverable amount, an impairment loss is recognized in the accounts to the extent the carrying amount exceedsthe recoverable amount.

(P) EARNINGS PER SHARE (EPS)

The earnings considered in ascertaining the Company''s EPS comprises the net profit after tax (and includes the post tax effect of any extra ordinary items} attributable to equity shareholders. The number of shares used in computing Basic EPS is the weighted average number of shares outstanding during the year. The Diluted EPS is calculated on the same basis as Basic EPS, after adjusting for the effect of potential dilutive equity shares,

(OJ PROVISIONS AND CONTINGENCIES

A provision is recognized when there is a present obligation, as a result of a past event, it is probable that an outflow of resources will be required to settle the obligation and in respect of which reliable estimate can be made. A disclosure for a contingent liability is made when there is a possible obfigation or a present obligation that may, but probably will not, require an outflow of resources. Where there is a possible -- obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

{R} CASH FLOW STATEMENT

Cash Flows are reported using the indirect method, whereby a profit before tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flow from operating, financing and investing activities of the company is segregated.


Mar 31, 2011

(A) GENERAL

The financial statements are prepared to comply in all material aspects with all the applicable accounting principles in India, the applicable accounting standards notified under section 211 (3C) of the Companies Act, 1956 and other relevant provisions of the Companies Act, 1956.

(B) FIXED ASSETS

Tangible Assets

i) Fixed assets (other than revalued Plant & Machinery) are stated at their original cost including freight, duties, taxes and other incidental expenses relating to acquisition and installation and are net of credit available under the excise / service tax CENVAT scheme and value added tax where applicable.

ii) Plant and Machinery are stated at revalued amount ascertained by an independent professional valuer as at 1st October'2010.

iii) Preoperative expenditure including borrowing cost (net of revenue) incurred during the construction / trial. run of projects is allocated on an appropriate basis to fixed assets on commissioning.

Intangible Assets

Intangible assets are recognised if:

- it is probable that the future economic benefits that are attributable to the assets will flow to the Company, and

- the cost / fair value (as determined by an independent valuer) of the assets can be measured reliably.

(C) DEPRECIATION/AMORTISATION

Fixed Assets:

Depreciation on all fixed assets (other than revalued plant & machinery) is charged on the straight line method on a pro-rata basis at the rates prescribed under Schedule XIV to the Companies Act, 1956, except for certain fixed assets provided to employees as per the terms of the employment and certain tools, which are depreciated over three to five years based on the useful life to the Company. Where there is a revision of the estimated useful life of an asset, the un amortised depreciable amount is charged over the revised remaining useful life (subject to minimum rates prescribed under Schedule XIV to the Companies Act, 1956).

In respect of revalued Plant and Machinery the useful life is estimated between 6 years to 20 years, as certified by an independent professional valuer. Depreciation is computed on the revalued amount on remaining useful life of such assets.

Leasehold land is written-off proportionately over the lease period.

Leasehold Improvements are written off over the period of primary lease.

Capital spares are amortised over the useful life of the principal item.

Intangible Assets:

Goodwill is amortised on a straight line basis over a period of five years.

"Technical Designs / Drawings" and "Software for Internal Use" are amortised on a straight line basis over the estimated useful lives of the assets which are as under:

- Software for internal use - 3 years

- SAP ERP Package - 5 years

- Technical Designs / Drawings - Useful life of the related Plant and Machinery

(D) INVESTMENTS

Long term investments are stated at cost.

However, when there is a decline, other than temporary, in the value of long term investment, an appropriate provision is made to recognise such decline.

Current investments are valued at the lower of cost and fair value.

(E) INVENTORIES

Raw materials and components, stores and spares, loose tools, work-in-process and finished goods are valued at the lower of cost and net realisable value. Cost for this purpose is worked out on a moving weighted average basis. In case of finished goods and work-in-process, appropriate overheads are loaded on absorption costing basis.

Finished goods are stated inclusive of excise duty.

(F) RESEARCH AND DEVELOPMENT (R&D)

i) Revenue expenditure incurred for R&D is charged to the Profit and Loss Account.

ii) Fixed Assets purchased for R&D activities are capitalised in the year the same are put to use.

(G) REVENUE

i) Sales are accounted for on despatch and are stated inclusive of excise duty and net of value added tax, sales tax, trade discounts and sales return.

ii) Export incentives are accounted for on an accrual basis.

(H) POST EMPLOYMENT BENEFITS

The Company's contribution to Provident Fund is charged to the Profit and Loss Account.

The Company has taken group policies with the Life Insurance Corporation of India (LIC) to cover the liabilities towards the Superannuation and Gratuity benefits for certain categories of employees. Trustees have been appointed for the purpose of administering the Superannuation and Gratuity Funds.The Company makes provision for the liability for long term defined benefit schemes of gratuity and leave encashment for all its employees on the basis of actuarial valuation on the Balance Sheet date based on the Projected Unit Credit Method. The actuarial valuation of the liability towards Gratuity is made on the basis of assumptions with respect to the variable elements affecting the computations including estimation of interest rate of earnings on contributions to LIC, discount rate, future salary increases. The Company recognises the actuarial gains and losses in the Profit and Loss account as income and expense in the period in which they occur.

(I) FOREIGN CURRENCY TRANSACTIONS

i) Foreign currency transactions are accounted for at the exchange rate prevailing on the transaction date. Monetary assets and liabilities related to foreign currency transactions remaining unsettled at the end of the year are translated at year-end rates.

ii) The difference in translation of monetary assets and liabilities and realised gains and losses on foreign exchange transactions are recognised in the Profit and Loss account. For forward contracts associated with underlying out standings at the Balance Sheet date, the exchange difference on such contracts are recognised in the profit and loss account in the reporting period in which exchange rates changes. The premium or discount on all such contracts arising at the inception are amortised as income or expense over the life of the contract.

(J) BORROWING COSTS

i) Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalised as part of the cost of that asset upto the date of start of commercial production.

ii) Ancillary costs incurred in connection with the arrangement of borrowings are amortised over the period of the borrowing.

iii) Other borrowing costs are recognised as an expense in the period in which they are incurred.

(K) LEASES

As Lessee

Lease rentals in respect of assets taken on 'operating lease' are charged to the Profit and Loss account on a straight line basis over the lease term.

Finance lease transactions entered are considered as financing arrangements and the leased asset is capitalized at an amount equal to the present value of future lease payments and a corresponding amount is recognised as a liability. The lease payments made are apportioned between finance charge and reduction of outstanding liability in relation to leased asset.

(L) TAXATION

Tax expense for the year comprises of current tax, deferred tax and Current taxes are measured at the current rate of tax in accordance with provisions of the Income Tax Act, 1961.

Deferred Income Tax reflects the effect of temporary timing differences between the assets and liabilities recognised for financial reporting purposes and the amounts that are recognised for Income Tax purposes.

Deferred' tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or subsequently enacted by the Balance Sheet date.

Deferred fax assets in case of carry forward of losses / depreciation are recognised only to the extent there is virtual certainty that sufficient future taxable income will be available. In all other cases deferred tax asset is recognised, where there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised.

(M) WARRANTY

Warranty cost is provided on the basis of average cost of warranty of finished goods lying with the Company at the year end and the estimated future claims expected to be received (based on past experience) within the warranty period.

(N) EMPLOYEE STOCK OPTION BASED COMPENSATION

Stock options' granted to the employees who accepted the grant under the Company's Stock Option Plan are accounted in accordance with Securities and Exchange Board of India (Employees Stock Option Scheme) Guidelines, 1999. The Company follows the intrinsic value method and accordingly, the excess, if any, of the market price of the underlying equity shares as of the date of the grant of the option over the exercise price of the option, is recognized as employee compensation cost and amortised on straight line basis over the vesting period.

(O) IMPAIRMENT OF ASSETS

At each balance sheet date, the Company assesses whether there is any indication that any asset may be impaired. If any such indication exists, the Company estimates the recoverable amount. If the carrying amount of the assets exceeds the recoverable amount, an impairment loss is recognised in the accounts to the extent the carrying amount exceeds the recoverable amount.

(P) EARNINGS PER SHARE (EPS)

The earnings considered in ascertaining the Company's EPS comprises the net profit after tax (and includes the post tax effect of any extra ordinary items) attributable to equity shareholders. The number of shares used in computing Basic EPS is the weighted average number of shares outstanding during the year. The diluted EPS is calculated on the same basis as basic EPS, after adjusting for the effect of potential dilutive equity shares.

(Q) PROVISIONS AND CONTINGENCIES

A provision is recognised when there is a present obligation, as a result of a past event, it is probable that an outflow of resources will be required to settle the obligation and in respect of which reliable estimate can be made. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.


Mar 31, 2010

(A) GENERAL

The financial statements are prepared to comply in all material aspects with all the applicable accounting principles in India, the applicable accounting standards notified under section 211 (3C) of the Companies Act, 1956 and other relevant provisions of the Companies Act, 1956.

(B) FIXED ASSETS

Tangible Assets

Fixed assets are stated at their original cost including freight, duties, taxes and other incidental expenses relating to acquisition and installation and are net of credit available under the excise / service tax CENVAT scheme and value added tax where applicable.

Preoperative expenditure including borrowing cost (net of revenue) incurred during the construction/trial run of projects is allocated on an appropriate basis to fixed assets on commissioning.

Intangible Assets

Intangible assets are recognised if:

- it is probable that the future economic benefits that are attributable to the assets will flow to the Company, and

- the cost/fair value (as determined by an independent valuer) of the assets can be measured reliably.

(C) DEPRECIATION/AMORTISATION

Fixed Assets

Depreciation on all fixed assets is charged on the straight line method on a pro-rata basis at the rates prescribed under Schedule XIV to the Companies Act, 1956, except for certain fixed assets provided to employees as per the terms of the employment and certain tools, which are depreciated over three to five years based on the useful life to the Company. Where there is a revision of the estimated useful life of an asset, the un amortised depreciable amount is charged over the revised remaining useful life (subject to minimum rates prescribed under Schedule XIV to the Companies Act, 1956).

Leasehold land is written-off proportionately over the lease period.

Leasehold Improvements are written off over the period of primary lease.

Capital spares are amortised over the useful life of the principal item.

Intangible Assets

Goodwill is amortised on a straight line basis over a period of five years.

"Technical Designs / Drawings" and "Software for Internal Use" are amortised on a straight line basis over the estimated useful lives of the assets which are as under:

- Software for internal use - 3 years

- SAP ERP Package - 5 years

- Technical Designs / Drawings - Useful life of the related Plant and Machinery

(D) INVESTMENTS

Long term investments are stated at cost.

However, when there is a decline, other than temporary, in the value of long term investment, an appropriate provision is made to recognise such decline.

Current investments are valued at the lower of cost and fair value.

(E) INVENTORIES

Raw materials and components, stores and spares, loose tools, work-in-process and finished goods are valued at the lower of cost and net realisable value. Cost for this purpose is worked out on a moving weighted average basis. In case of finished goods and work-in-process, appropriate overheads are loaded on absorption costing basis. Finished goods are stated inclusive of excise duty.

(F) RESEARCH AND DEVELOPMENT (R&D)

i) Revenue expenditure incurred for R&D is charged to the Profit and Loss Account.

ii) Fixed Assets purchased for R&D activities are capitalised in the year the same are put to use.

(G) REVENUE

i) Sales are accounted for on despatch and are stated inclusive of excise duty and net of value added tax, sales tax, trade discounts and sales return.

ii) Export incentives are accounted for on an accrual basis.

(H) POST EMPLOYMENT BENEFITS

The Companys contribution to Provident Fund is charged to the Profit and Loss Account.

The Company has taken group policies with the Life Insurance Corporation of India (LIC) to cover the liabilities towards the Superannuation and Gratuity benefits for certain categories of employees. Trustees have been appointed for the purpose of administering the Superannuation and Gratuity Funds. The Company makes provision for the liability for long term defined benefit schemes of gratuity and leave encashment for all its employees on the basis of actuarial valuation on the Balance Sheet date based on the Projected Unit Credit Method. The actuarial valuation of the liability towards Gratuity is made on the basis of assumptions with respect to the variable elements affecting the computations including estimation of interest rate of earnings on contributions to LIC, discount rate, future salary increases. The Company recognises the actuarial gains and losses in the Profit and Loss account as income and expense in the period in which they occur.

(I) FOREIGN CURRENCY TRANSACTIONS

i) Foreign currency transactions are accounted for at the exchange rate prevailing on the transaction date. Monetary assets and liabilities related to foreign currency transactions remaining unsettled at the end of the year are translated at year-end rates.

ii) The difference in translation of monetary assets and liabilities and realised gains and losses on foreign exchange transactions are recognised in the Profit and Loss account. For forward contracts associated with underlying out standings at the Balance Sheet date, the exchange difference on such contracts are recognised in the profit and loss account in the reporting period in which exchange rates changes. The premium or discount on all such contracts arising at the inception are amortised as in income or expense over the life of the contract.

(J) BORROWING COSTS

i) Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalised as part of the cost of that asset upto the date of start of commercial production.

ii) Ancillary costs incurred in connection with the arrangement of borrowings are amortised over the period of the borrowing.

iii) Other borrowing costs are recognised as an expense in the period in which they are incurred.

(K) LEASES

As Lessee

Lease rentals in respect of assets taken on operating lease are charged to the Profit and Loss account on a straight line basis over the lease term.

Finance lease transactions entered are considered as financing arrangements and the leased asset is capitalized at an amount equal to the present value of future lease payments and a corresponding amount is recognised as a liability. The lease payments made are apportioned between finance charge and reduction of outstanding liability in relation to leased asset,

(L) TAXATION

Tax expense for the year comprises of current tax and deferred tax. Current taxes are measured at the current rate of tax in accordance with provisions of the income Tax Act, 1961.

Deferred Income Tax reflects the effect of temporary timing differences between the assets and liabilities recognised for financial reporting purposes and the amounts that are recognised for Income Tax purposes.

Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or subsequently enacted by the Balance Sheet date.

Deferred tax assets in case of carry forward of losses / depreciation are recognised only to the extent there is virtual certainty that sufficient future taxable income will be available. In all other cases deferred tax asset is recognised, where there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised.

(M) WARRANTY

Warranty cost is provided on the basis of average cost of warranty of finished goods lying with the Company at the year end and the estimated future claims expected to be received (based on past experience) within the warranty period.

(N) EMPLOYEE STOCK OPTION BASED COMPENSATION

Stock options granted to the employees who accepted the grant under the Companys Stock Option Ptan are accounted in accordance with Securities and Exchange Board of India (E:mployees Stock Option Scheme) Guidelines, 1999. The Company follows the intrinsic value method and accordingly, the excess, if any, of the market price of the underlying equity shares as of the date of the grant of the option over the exercise price of the option, is recognized as employee compensation cost and amortised on straight line basis over the vesting period.

(O) IMPAIRMENT OF ASSETS

At each balance sheet date, the Company assesses whether there is any indication that any asset may be impaired. If any such indication exists, the Company estimates the recoverable amount, if the carrying amount of the assets exceeds the recoverable amount, an impairment loss is recognised in the accounts to the extent the carrying amount exceeds the recoverable amount.

(P) EARNINGS PER SHARE (EPS)

The earnings considered in ascertaining the Companys EPS comprises the net profit after tax (and includes the post tax effect of any extra ordinary items) attributable to equity shareholders. The number of shares used in computing Basic EPS is the weighted average number of shares outstanding during the year. The diluted EPS is calculated on the same basis as basic EPS, after adjusting for the effect of potential dilutive equity shares.

(Q) PROVISIONS AND CONTINGENCIES

A provision is recognised when there is a present obligation, as a result of a past event, it is probable that an outflow of resources will be required to settle the obligation and in respect of which reliable estimate can be made. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

 
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