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Accounting Policies of SEL Manufacturing Company Ltd. Company

Mar 31, 2015

1. Corporate Information

SEL Manufacturing Co. Limited is a public company incorporated in India under the provisions of the Companies Act, 1956. Its shares are listed on the Bombay Stock Exchange and the National Stock Exchange. The Company is engaged in the manufacturing, processing & trading of yarn, fabric, readymade garments and towel.

2.1 Basis of Preparation The financial statements of the company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP). The company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2014 and the relevant provisions of the Companies Act, 2013. The financial statements have been prepared on an accrual basis and under the historical cost convention.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

2.2 Use of Estimates

The preparation of financial statements requires the management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) as on the date of the financial statements and the reported income and expenses during the reporting period. The estimates and assumptions used in the financial statements are based upon the Management's evaluation of the relevant facts and circumstances as on the date of financial statements. Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. Future results may vary from these estimates.

2.3 Revenue Recognition i) Sales

Revenue from sale of goods is recognized:

i) When all the significant risks and rewards of ownership are transferred to the buyer and the company retains no effective control of the goods transferred to a degree usually associated with ownership: and ii) No significant uncertainty exists regarding the amount of the consideration that will be derived from the sale of goods.

ii) Export Incentives

Revenue in respect of the above benefits is recognized on post export basis.

iii) Dividend

Dividend income is recognized when the right to receive the payment is established.

iv) Interest

Interest Income is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

2.4 Investments

Long term Investments are carried at cost less provision, if any, for diminution in value which is other than temporary, and current investments are carried at lower of cost and fair value.

2.5 Inventories

Inventories are valued at cost or net realizable value, whichever is lower except for waste which is valued at net realizable value. The cost in respect of the various items of inventory is computed as under:

i) In respect of Raw Materials on FIFO basis.

ii) In respect of Work in process and Finished Goods, at weighted average cost of raw material plus conversion cost & packing cost incurred to bring the goods to their present condition & location. iii) In respect of trading goods, on specific identification method. iv) In respect of Consumable Stores on weighted average basis.

2.6 Foreign Currency Transactions (a) Foreign Branch (Integral)

i) Fixed assets are translated at the rates on the date of purchase/acquisition of assets and Inventories are translated at the rates that existed when costs were incurred. ii) All foreign currency monetary items outstanding at the year-end are translated at the year-end exchange rates. Income and expenses are translated at average rates of exchange and depreciation is translated at the rates referred to in (a)(i) above for fixed assets.

The resulting exchange gains & losses are recognized in the profit and loss account.

(b) Other foreign currency transactions:

i) Transactions in foreign currency are accounted for at the exchange rate prevailing on the date of transaction except sales that are recorded at rate notified by the customs for invoice purposes. Such rate is notified in the last week of every month and is adopted for recording export sales of next month.

ii) Foreign currency monetary items are reported using the closing rate. Exchange differences arising on the settlement of monetary items or on reporting the same at balance sheet date are recognized as income or expenses in period in which they arise, except the exchange difference in case of fixed assets which have been adjusted to the cost of fixed assets.

iii) Foreign currency non monetary items, which are carried in terms of historical cost, re-stated at the rate of exchange prevailing at the year-end and the gain or loss, is accumulated in a foreign exchange fluctuation reserve.

2.7 Fixed Assets

(i) a) Tangible Assets

Fixed Assets are stated at acquisition cost including inward freight, duties, taxes and incidental expenses relating to acquisition net of subsidy relating to specific fixed asset and accumulated depreciation.

b) Intangibles Assets

Computer Software's are amortized over the estimated useful life.

(ii) Capital work in progress

Capital work in progress includes cost of assets at site, construction expenditure for acquisition of capital assets and pre-operative expenditure pending allocation to fixed assets.

(iii) Expenditure incurred during construction period

In respect of new/major expansion, the indirect expenditure incurred during implementation period up to the date of commencement of commercial production, which is attributable to the construction of the project, is capitalized on various categories of fixed assets on proportionate basis. The unallocated expenses are shown in pre-operative expenses.

2.8 Depreciation

Depreciation on Fixed Assets is provided based on the useful life of the asset in the manner prescribed in Schedule II to the Companies Act, 2013.

2.9 Borrowing Costs

Borrowing costs attributable to the acquisition or construction of qualifying assets are capitalized as part of such assets, up to the date when such assets are ready for intended use. Other borrowing costs are charged as expenditure in the year in which they are incurred.

2.10 Employee Benefits

(i) Defined Contribution Plan:

Contribution to Provident Fund is made in accordance with the provisions of the Employees Provident Fund and Miscellaneous Provision Act, 1952 and is charged to the profit and loss account.

(ii) Defined Benefit Plans (Gratuity):

The Company has a defined benefit Gratuity plan covering all its employees. Gratuity is covered under a scheme of Life Insurance Corporation of India (LIC) and contribution in respect of such scheme is recognized in the Profit & Loss Account. The liability/asset as at the Balance Sheet date is provided for based on the actuarial valuation carried out in accordance with Accounting Standard 15 on 'Employee Benefit'.

(iii) Leave with wages

Provision for earned leave due for the year is made on the actual valuation as at the close of the year.

2.11 Accounting for Taxes on Income Current Tax

Current Tax is determined as the amount of tax payable in respect of taxable income for the period after considering tax allowances & exemptions.

Deferred Tax

Deferred tax assets and liabilities arising on account of timing difference and which are capable of reversal in subsequent periods, are recognized using the tax rates and tax laws that have been enacted or substantively enacted as on the Balance Sheet date.

Deferred Tax Assets are recognized and carried forward only if there is a virtual certainty that they will be realized and are reviewed for the appropriateness of their respective carrying values at each Balance Sheet date.

Minimum Alternative Tax

Minimum Alternative Tax credit is recognized as an asset only when & to the extent there is convincing evidence that the Company will pay normal tax during the specified period. Such asset is reviewed at each Balance Sheet date & the carrying amount of the MAT credit asset is written down to the extent there is no longer a convincing evidence to the effect that the company will pay normal income tax during the specified period.

2.12 Impairment of Assets

The carrying values of assets/cash generating units at each balance sheet date are reviewed for impairment. If any indication of impairment exists, the recoverable amount of such assets is estimated and impairment is recognized, if the carrying amount of these assets exceeds their recoverable amount. The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discounting the future cash flows to their present value based on an appropriate discount factor. When there is indication that an impairment loss recognized for an asset in earlier accounting periods no longer exists or may have decreased, such reversal of impairment loss is recognized in the statement of profit and loss, except in case of revalued assets.

2.13 Provisions and Contingent Liabilities

(a) Provisions are recognized for liabilities that can be determined by using a substantial degree of estimation, if: (i) The company has a present obligation as a result of a past event;

(ii) A probable outflow of resources embodying economic benefits is expected to settle the obligation; and (iii) The amount of the obligation can be reliably estimated

(b) Contingent liability is disclosed in the case of: (i) a present obligation arising from a past event when it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation or (ii) a possible obligation, unless the probability of outflow of resources embodying economic benefits is remote.

2.14 Earnings per share

Basic earnings per share is computed by dividing the net profit for the period attributable to equity shareholders by the weighted average number of shares outstanding during the period. Diluted earnings per share is computed by taking into account the aggregate of the weighted average numbers of equity shares outstanding during the period and the weighted average number of equity shares which would be issued on conversion of all the dilutive potential equity shares into equity shares.

2.15 Basis of Incorporation of integral foreign operations

Figures in respect of the Company's overseas branch in United Arab Emirates have been incorporated on the basis of Financial Statement audited by the auditors of the branch.

2.16 Operating Leases

Assets acquired on leases wherein a significant portion of the risks and rewards of ownership are retained by the lesser are classified as operating leases. Lease rentals paid for such leases are recognized as an expense on systematic basis over the term of lease.

2.17 Government Grants & Subsidies

Grants and subsidies from the government are recognized when there is reasonable assurance that (i) the Company will comply with the conditions attached to them, and (ii) the grant/subsidy will be received. When the grant or subsidy relates to revenue, it is recognized as income on a systematic basis in the statement of profit and loss over the periods necessary to match them with the related costs, which they are intended to compensate. Where the grant relates to an asset, it is recognized as deferred income and released to income in equal amounts over the expected useful life of the related asset.

(vii) Further to the search and seizure operations by the Income-tax Authorities in September 2013, the Income Tax Department issued notice u/s 153A (1) of the Income Tax Act, 1961, dated March 24, 2014 for submission of Income Tax Returns u/s 153A (1) (a) from Assessment Year 2008-09 to 2013-14 in pursuance of the search conducted u/s 132 of the Income Tax Act, 1961. The Company has filed return in response to notices as required by the authorities. The consequential assessment proceedings are in progress. Pending these proceedings, no provision has been made in the books for additional liability for tax, interest and penalty, if any.

*includes demand from tax authorities for various matters. The Company/tax department has preferred appeals on these matters and the same are pending with various appellate authorities. Considering the facts of the matters, no provision is considered necessary by management.

*No transactions have taken place during the year.

#became subsidiary w.e.f. 17.07.2014 which was an associate before that.

$ cease to exist as associate/fellow subsidiary during the year.


Mar 31, 2014

1.1 Basis of Preparation

The financial statements of the company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP). The company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on an accrual basis and under the historical cost convention.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

1.2 Use of Estimates

The preparation of financial statements requires the management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) as on the date of the financial statements and the reported income and expenses during the reporting period. The estimates and assumptions used in the financial statements are based upon the Management''s evaluation of the relevant facts and circumstances as on the date of financial statements. Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. Future results may vary from these estimates.

1.3 Revenue Recognition

i) Sales

Revenue from sale of goods is recognized:

i) When all the significant risks and rewards of ownership are transferred to the buyer and the company retains no effective control of the goods transferred to a degree usually associated with ownership: and

ii) No significant uncertainty exists regarding the amount of the consideration that will be derived from the sale of goods.

ii) Export Incentives

Revenue in respect of the above benefits is recognized on post export basis.

iii) Dividend

Dividend income is recognized when the right to receive the payment is established.

iv) Interest

Interest Income is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

1.4 Investments

Long term Investments are carried at cost less provision, if any, for diminution in value which is other than temporary, and current investments are carried at lower of cost and fair value.

1.5 Inventories

Inventories are valued at cost or net realizable value, whichever is lower except for waste which is valued at net realizable value. The cost in respect of the various items of inventory is computed as under:

i) In respect of Raw Materials on FIFO basis.

ii) In respect of Work in process and Finished Goods, at weighted average cost of raw material plus conversion cost & packing cost incurred to bring the goods to their present condition & location.

iii) In respect of trading goods, on specific identification method.

iv) In respect of Consumable Stores on weighted average basis.

1.6 Foreign Currency Transactions

(a) Foreign Branch (Integral)

i) Fixed assets are translated at the rates on the date of purchase/acquisition of assets and Inventories are translated at the rates that existed when costs were incurred.

ii) All foreign currency monetary items outstanding at the year-end are translated at the year-end exchange rates. Income and expenses are translated at average rates of exchange and depreciation is translated at the rates referred to in (a)(i) above for fixed assets.

The resulting exchange gains & losses are recognized in the profit and loss account.

(b) Other foreign currency transactions:

i) Transactions in foreign currency are accounted for at the exchange rate prevailing on the date of transaction except sales that are recorded at rate notified by the customs for invoice purposes. Such rate is notified in the last week of every month and is adopted for recording export sales of next month.

ii) Foreign currency monetary items are reported using the closing rate. Exchange differences arising on the settlement of monetary items or on reporting the same at balance sheet date are recognized as income or expenses in period in which they arise, except the exchange difference in case of fixed assets which have been adjusted to the cost of fixed assets.

iii) Foreign currency non monetary items, which are carried in terms of historical cost, are reported using exchange rate at the date of transaction.

1.7 Fixed Assets

(i) a) Tangible Assets

Fixed Assets are stated at acquisition cost including inward freight, duties, taxes and incidental expenses relating to acquisition net of subsidy relating to specific fixed asset and accumulated depreciation.

b) Intangibles Assets

Computer Software''s are amortized over the estimated useful life.

(ii) Capital work in progress

Capital work in progress includes cost of assets at site, construction expenditure for acquisition of capital assets and pre-operative expenditure pending allocation to fixed assets.

(iii) Expenditure incurred during construction period

In respect of new/major expansion, the indirect expenditure incurred during implementation period upto the date of commencement of commercial production, which is attributable to the construction of the project, is capitalized on various categories of fixed assets on proportionate basis. The unallocated expenses are shown in pre-operative expenses.

1.8 (i) Cenvat Credit

Cenvat Credit of excise duty paid on capital assets is recognized in accordance with the Cenvat Credit Rules, 2004.

(ii) Excise Duty

Excise duty is accounted on production of finished goods.

1.9 Depreciation/Amortization

(i) Depreciation has been provided under Straight Line Method at the rates specified in Schedule XIV of Companies Act, 1956.

(ii) The leasehold land is amortized over the lease period.

1.10 Borrowing Costs

Borrowing costs attributable to the acquisition or construction of qualifying assets are capitalized as part of such assets, up to the date when such assets are ready for intended use. Other borrowing costs are charged as expenditure in the year in which they are incurred.

1.11 Employee Benefits

(i) Defined Contribution Plan:

Contribution to Provident Fund is made in accordance with the provisions of the Employees Provident Fund and Miscellaneous Provision Act, 1952 and is charged to the profit and loss account.

(ii) Defined Benefit Plans (Gratuity):

The Company has a defined benefit Gratuity plan covering all its employees. Gratuity is covered under a scheme of Life Insurance Corporation of India (LIC) and contribution in respect of such scheme is recognized in the Profit & Loss Account. The liability/asset as at the Balance Sheet date is provided for based on the actuarial valuation carried out in accordance with Accounting Standard 15 on ''Employee Benefit''.

(iii) Leave with wages

Provision for earned leave due for the year is made on the actual valuation as at the close of the year.

1.12 Accounting for Taxes on Income Current Tax

Current Tax is determined as the amount of tax payable in respect of taxable income for the period after considering tax allowances & exemptions.

Deferred Tax

Deferred Tax is recognized, subject to consideration of prudence, on timing differences, being the difference between taxable income and accounting income that originate in one period and capable of reversal in one or more subsequent periods.

Minimum Alternative Tax

Minimum Alternative Tax credit is recognized as an asset only when & to the extent there is convincing evidence that the Company will pay normal tax during the specified period. Such asset is reviewed at each Balance Sheet date & the carrying amount of the MAT credit asset is written down to the extent there is no longer a convincing evidence to the effect that the company will pay normal income tax during the specified period.

1.13 Impairment of Assets

The carrying values of assets/cash generating units at each balance sheet date are reviewed for impairment. If any indication of impairment exists, the recoverable amount of such assets is estimated and impairment is recognised, if the carrying amount of these assets exceeds their recoverable amount. The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discounting the future cash flows to their present value based on an appropriate discount factor. When there is indication that an impairment loss recognised for an asset in earlier accounting periods no longer exists or may have decreased, such reversal of impairment loss is recognised in the statement of profit and loss, except in case of revalued assets.

1.14 Provisions and Contingent Liabilities

(a) Provisions are recognized for liabilities that can be determined by using a substantial degree of estimation, if:

(i) The company has a present obligation as a result of a past event;

(ii) A probable outflow of resources embodying economic benefits is expected to settle the obligation; and

(iii) The amount of the obligation can be reliably estimated

(b) Contingent liability is disclosed in the case of:

(i) a present obligation arising from a past event when it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation or

(ii) a possible obligation, unless the probability of outflow of resources embodying economic benefits is remote.

1.15 Earnings per share

Basic earning per share is computed by dividing the net profit for the period attributable to equity shareholders by the weighted average number of shares outstanding during the period. Diluted earning per share is computed by taking into account the aggregate of the weighted average numbers of equity shares outstanding during the period and the weighted average number of equity shares which would be issued on conversion of all the dilutive potential equity shares into equity shares.

1.16 Basis of Incorporation of integral foreign operations

Figures in respect of the Company''s overseas branch in United Arab Emirates have been incorporated on the basis of Financial Statement audited by the auditors of the branch.

1.17 Operating Leases

Assets acquired on leases wherein a significant portion of the risks and rewards of ownership are retained by the lesser are classified as operating leases. Lease rentals paid for such leases are recognized as an expense on systematic basis over the term of lease.

1.18 Government Grants & Subsidies

Grants and subsidies from the government are recognized when there is reasonable assurance that (i) the Company will comply with the conditions attached to them, and (ii) the grant/subsidy will be received. When the grant or subsidy relates to revenue, it is recognized as income on a systematic basis in the statement of profit and loss over the periods necessary to match them with the related costs, which they are intended to compensate. Where the grant relates to an asset, it is recognized as deferred income and released to income in equal amounts over the expected useful life of the related asset.


Mar 31, 2013

1.1 Basis of Preparation

The financial statements of the company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP). The company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on an accrual basis and under the historical cost convention.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

1.2 Use of Estimates

The preparation of financial statements requires the management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) as on the date of the financial statements and the reported income and expenses during the reporting period. The estimates and assumptions used in the financial statements are based upon the Management''s evaluation of the relevant facts and circumstances as on the date of financial statements. Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. Future results may vary from these estimates.

1.3 Revenue Recognition

i) Sales

Revenue from sale of goods is recognized:

(i) When all the significant risks and rewards of ownership are transferred to the buyer and the company retains no effective control of the goods transferred to a degree usually associated with ownership: and

(ii) No significant uncertainty exists regarding the amount of the consideration that will be derived from the sale of goods.

ii) Export Incentives

Revenue in respect of the above benefits is recognized on post export basis.

iii) Dividend

Dividend income is recognized when the right to receive the payment is established.

iv) Interest

Interest Income is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

1.4 Investments

Long term Investments are carried at cost less provision, if any, for diminution in value which is other than temporary, and current investments are carried at lower of cost and fair value.

1.5 Inventories

Inventories are valued at cost or net realizable value, whichever is lower except for waste which is valued at net realizable value. The cost in respect of the various items of inventory is computed as under:

i) In respect of Raw Materials on FIFO basis.

ii) In respect of Work in process and Finished Goods, at weighted average cost of raw material plus conversion cost & packing cost incurred to bring the goods to their present condition & location.

iii) In respect of trading goods, on specific identification method.

iv) In respect of Consumable Stores on weighted average basis.

1.6 Foreign Currency Transactions

(a) Foreign Branch (Integral)

i) Fixed assets are translated at the rates on the date of purchase/acquisition of assets and Inventories are translated at the rates that existed when costs were incurred.

ii) All foreign currency monetary items outstanding at the year-end are translated at the year-end exchange rates. Income and expenses are translated at average rates of exchange and depreciation is translated at the rates referred to in (a)(i) above for fixed assets.

The resulting exchange gains & losses are recognized in the profit and loss account.

(b) Other foreign currency transactions:

(i) Transactions in foreign currency are accounted for at the exchange rate prevailing on the date of transaction except sales that are recorded at rate notified by the customs for invoice purposes. Such rate is notified in the last week of every month and is adopted for recording export sales of next month.

(ii) Foreign currency monetary items are reported using the closing rate. Exchange differences arising on the settlement of monetary items or on reporting the same at balance sheet date are recognized as income or expenses in period in which they arise, except the exchange difference in case of fixed assets which have been adjusted to the cost of fixed assets.

(iii) Foreign currency non monetary items, which are carried in terms of historical cost, are reported using exchange rate at the date of transaction.

1.7 Fixed Assets

(i) a) Tangible Assets

Fixed Assets are stated at acquisition cost including inward freight, duties, taxes and incidental expenses relating to acquisition net of subsidy relating to specific fixed asset and accumulated depreciation.

b) Intangibles Assets

Computer Software''s are amortized over the estimated useful life.

(ii) Capital work in progress

Capital work in progress includes cost of assets at site, construction expenditure for acquisition of capital assets and pre-operative expenditure pending allocation to fixed assets.

(iii) Expenditure incurred during construction period

In respect of new/major expansion, the indirect expenditure incurred during implementation period upto the date of commencement of commercial production, which is attributable to the construction of the project, is capitalized on various categories of fixed assets on proportionate basis. The unallocated expenses are shown in pre-operative expenses.

1.8 (i) Cenvat Credit

Cenvat Credit of excise duty paid on capital assets is recognized in accordance with the Cenvat Credit Rules, 2004.

(ii) Excise Duty

Excise duty is accounted on production of finished goods.

1.9 Depreciation/Amortization

(i) Depreciation has been provided under Straight Line Method at the rates specified in Schedule XIV of Companies Act, 1956.

(ii) The leasehold land is amortized over the lease period.

1.10 Borrowing Costs

Borrowing costs attributable to the acquisition or construction of qualifying assets are capitalized as part of such assets, up to the date when such assets are ready for intended use. Other borrowing costs are charged as expenditure in the year in which they are incurred.

1.11 Employee Benefits

(i) Defined Contribution Plan:

Contribution to Provident Fund is made in accordance with the provisions of the Employees Provident Fund and Miscellaneous Provision Act, 1952 and is charged to the profit and loss account.

(ii) Defined Benefit Plans (Gratuity):

The Company has a defined benefit Gratuity plan covering all its employees. Gratuity is covered under a scheme of Life Insurance Corporation of India (LIC) and contribution in respect of such scheme is recognized in the Profit & Loss Account. The liability/asset as at the Balance Sheet date is provided for based on the actuarial valuation carried out in accordance with Accounting Standard 15 on ''Employee Benefit''.

(iii) Leave with wages

Provision for earned leave due for the year is made on the actual valuation as at the close of the year.

1.12 Accounting for Taxes on Income Current Tax

Current Tax is determined as the amount of tax payable in respect of taxable income for the period after considering tax allowances & exemptions.

Deferred Tax

Deferred Tax is recognized, subject to consideration of prudence, on timing differences, being the difference between taxable income and accounting income that originate in one period and capable of reversal in one or more subsequent periods.

Minimum Alternative Tax

Minimum Alternative Tax credit is recognized as an asset only when & to the extent there is convincing evidence that the Company will pay normal tax during the specified period. Such asset is reviewed at each Balance Sheet date & the carrying amount of the MAT credit asset is written down to the extent there is no longer a convincing evidence to the effect that the company will pay normal income tax during the specified period.

1.13 Impairment of Assets

The carrying values of assets/cash generating units at each balance sheet date are reviewed for impairment. If any indication of impairment exists, the recoverable amount of such assets is estimated and impairment is recognised, if the carrying amount of these assets exceeds their recoverable amount. The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discounting the future cash flows to their present value based on an appropriate discount factor. When there is indication that an impairment loss recognised for an asset in earlier accounting periods no longer exists or may have decreased, such reversal of impairment loss is recognised in the statement of profit and loss, except in case of revalued assets.

1.14 Provisions and Contingent Liabilities

(a) Provisions are recognized for liabilities that can be determined by using a substantial degree of estimation, if:

(i) The company has a present obligation as a result of a past event;

(ii) A probable outflow of resources embodying economic benefits is expected to settle the obligation; and

(iii) The amount of the obligation can be reliably estimated

(b) Contingent liability is disclosed in the case of:

(i) a present obligation arising from a past event when it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation or

(ii) a possible obligation, unless the probability of outflow of resources embodying economic benefits is remote.

1.15 Earnings per share

Basic earning per share is computed by dividing the net profit for the period attributable to equity shareholders by the weighted average number of shares outstanding during the period. Diluted earning per share is computed by taking into account the aggregate of the weighted average numbers of equity shares outstanding during the period and the weighted average number of equity shares which would be issued on conversion of all the dilutive potential equity shares into equity shares.

1.16 Basis of Incorporation of integral foreign operations

Figures in respect of the Company''s overseas branch in United Arab Emirates have been incorporated on the basis of Financial Statement audited by the auditors of the branch.

1.17 Operating Leases

Assets acquired on leases wherein a significant portion of the risks and rewards of ownership are retained by the lesser are classified as operating leases. Lease rentals paid for such leases are recognized as an expense on systematic basis over the term of lease.


Mar 31, 2012

1.1 Basis of Preparation

The financial statements of the company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP). The company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on an accrual basis and under the historical cost convention.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

1.2 Presentation and disclosure of Financial Statements

For the year ended 31st March, 2012, the revised Schedule VI notified under the Companies Act, 1956, has become applicable to the Company, for preparation and presentation of its Financial Statements. The adoption of revised Schedule VI does not impact recognition and measurement principles followed for preparation of financial statements. However, it has significant impact on presentation and disclosures made in the financial statements. The company has also reclassified the previous year figures in accordance with the requirements applicable in the current year.

1.3 Use of Estimates

The preparation of financial statements requires the management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) as on the date of the financial statements and the reported income and expenses during the reporting period. The estimates and assumptions used in the financial statements are based upon the Management's evaluation of the relevant facts and circumstances as on the date of financial statements. Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. Future results may vary from theses estimates.

1.4 Revenue Recognition

i) Sales

Revenue from sale of goods is recognized:

(i) When all the significant risks and rewards of ownership are transferred to the buyer and the company retains no effective control of the goods transferred to a degree usually associated with ownership: and

(ii) No significant uncertainty exists regarding the amount of the consideration that will be derived from the sale of goods.

ii) Export Incentives

Revenue in respect of the above benefits is recognized on post export basis.

iii) Dividend

Dividend income is recognized when the right to receive the payment is established.

iv) Interest

Interest Income is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

1.5 Investments

Long term Investments are carried at cost less provision, if any, for diminution in value which is other than temporary, and current investments are carried at lower of cost and fair value.

1.6 Inventories

Inventories are valued at cost or net realizable value, whichever is lower except for waste which is valued at net realizable value. The cost in respect of the various items of inventory is computed as under:

i) In respect of Raw Materials on FIFO basis.

ii) In respect of Work in process and Finished Goods, at weighted average cost of raw material plus conversion cost & packing cost incurred to bring the goods to their present condition & location.

iii) In respect of trading goods, on specific identification method.

iv) In respect of Consumable Stores on weighted average basis.

1.7 Foreign Currency Transactions

(a) Foreign Branch (Integral)

(i) Fixed assets are translated at the rates on the date of purchase/acquisition of assets and Inventories are translated at the rates that existed when costs were incurred.

(ii) All foreign currency monetary items outstanding at the year end are translated at the year-end exchange rates. Income and expenses are translated at average rates of exchange and depreciation is translated at the rates referred to in (a)(i) above for fixed assets.

The resulting exchange gains & losses are recognized in the profit and loss account.

(b) Other foreign currency transactions:

(I) Transactions in foreign currency are accounted for at the exchange rate prevailing on the date of transaction except sales that are recorded at rate notified by the customs for invoice purposes. Such rate is notified in the last week of every month and is adopted for recording export sales of next month.

(ii) Foreign currency monetary items are reported using the closing rate. Exchange differences arising on the settlement of monetary items or on reporting the same at balance sheet date are recognized as income or expenses in period in which they arise, except the exchange difference in case of fixed assets which have been adjusted to the cost of fixed assets.

(iii) Foreign currency non monetary items, which are carried in terms of historical cost, are reported using exchange rate at the date of transaction.

1.8 Fixed Assets

(i) Fixed Assets

Fixed Assets are stated at acquisition cost including inward freight, duties, taxes and incidental expenses relating to acquisition net of subsidy relating to specific fixed asset and accumulated depreciation.

(ii) Capital work in progress

Capital work in progress includes cost of assets at site, construction expenditure for acquisition of capital assets and pre-operative expenditure pending allocation to fixed assets.

(iii) Expenditure incurred during construction period

In respect of new/major expansion, the indirect expenditure incurred during implementation period upto the date of commencement of commercial production, which is attributable to the construction of the project, is capitalized on various categories of fixed assets on proportionate basis. The unallocated expenses are shown in pre-operative expenses.

1.9 (i) Cenvat Credit

Cenvat Credit of excise duty paid on capital assets is recognized in accordance with the Cenvat Credit Rules, 2004.

(ii) Excise Duty

Excise duty is accounted on production of finished goods.

1.10 Depreciation/Amortization

(i) Depreciation has been provided under Straight Line Method at the rates specified in Schedule XIV of Companies Act, 1956.

(ii) The leasehold land is amortized over the lease period.

1.11 Borrowing Costs

Borrowing costs attributable to the acquisition or construction of qualifying assets are capitalized as part of such assets, up to the date when such assets are ready for intended use. Other borrowing costs are charged as expenditure in the year in which they are incurred.

1.12 Employee Benefits

(I) Defined Contribution Plan:

Contribution to Provident Fund is made in accordance with the provisions of the Employees Provident Fund and Miscellaneous Provision Act, 1952 and is charged to the profit and loss account.

(ii) Defined Benefit Plans (Gratuity):

The Company has a defined benefit Gratuity plan covering all its employees. Gratuity is covered under a scheme of Life Insurance Corporation of India (LIC) and contribution in respect of such scheme is recognized in the Profit & Loss Account. The liability/asset as at the Balance Sheet date is provided for based on the actuarial valuation carried out in accordance with Accounting Standard 15 on 'Employee Benefit'.

(iii) Leave with wages

Provision for earned leave due for the year is made on the actual valuation as at the close of the year.

1.13 Accounting for Taxes on Income Current Taxes

Current Tax is determined as the amount of tax payable in respect of taxable income for the period after considering tax allowances & exemptions.

Deferred Taxes

Deferred Tax is recognized, subject to consideration of prudence, on timing differences, being the difference between taxable income and accounting income that originate in one period and capable of reversal in one or more subsequent periods.

Minimum Alternative Tax

Minimum Alternative Tax credit is recognized as an asset only when & to the extent there is convincing evidence that the Company will pay normal tax during the specified period. Such asset is reviewed at each Balance Sheet date & the carrying amount of the MAT credit asset is written down to the extent there is no longer a convincing evidence to the effect that the company will pay normal income tax during the specified period.

1.14 Impairment of Assets

At each balance sheet date, an assessment is made whether any indication exists that an asset has been impaired. If any such indication exists, an impairment loss i.e. the amount by which the carrying amount of an asset exceeds its recoverable amount is provided in the books of account.

1.15 Provisions and Contingent Liabilities

(a) Provisions are recognized for liabilities that can be determined by using a substantial degree of estimation, if:

(i) The company has a present obligation as a result of a past event;

(ii) A probable outflow of resources embodying economic benefits is expected to settle the obligation; and

(iii) The amount of the obligation can be reliably estimated

(b) Contingent liability is disclosed in the case of:

(i) A present obligation arising from a past event when it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation or

(ii) A possible obligation, unless the probability of outflow of resources embodying economic benefits is remote.

1.16 Earnings per share

Basic earning per share is computed by dividing the net profit for the period attributable to equity shareholders by the weighted average number of shares outstanding during the period. Diluted earning per share is computed by taking into account the aggregate of the weighted average numbers of equity shares outstanding during the period and the weighted average number of equity shares which would be issued on conversion of all the dilutive potential equity shares into equity shares.

1.17 Basis of Incorporation of integral foreign operations

Figures in respect of the Company's overseas branch in United Arab Emirates have been incorporated on the basis of Financial Statement audited by the auditors of the branch.

1.18 Operating Leases

Assets acquired on leases wherein a significant portion of the risks and rewards of ownership are retained by the lesser are classified as operating leases. Lease rentals paid for such leases are recognized as an expense on systematic basis over the term of lease.


Mar 31, 2011

A. Accounting Convention

The accounts are prepared on historical cost convention in accordance with the generally accepted accounting principles, the applicable accounting standards referred to in section 211 (3C) and other relevant provisions of the Companies Act, 1956.

B. Revenue Recognition

i) Sales

Revenue from sale of goods is recognized:

i) When all the significant risks and rewards of ownership are transferred to the buyer and the company retains no effective control of the goods transferred to a degree usually associated with ownership: and

ii) No significant uncertainty exists regarding the amount of the consideration that will be derived from the sale of goods.

ii) Export Incentives

Revenue in respect of the above benefits is recognized on post export basis.

iii) Dividend

Dividend income is recognized when the right to receive the payment is established.

iv) Interest

Interest Income is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

C. Investments

Long term Investments are carried at cost less provision, if any, for diminution in value which is other than temporary, and current investments are carried at lower of cost and fair value.

D. Inventories

Inventories are valued at cost or net realizable value, whichever is lower except for waste which is valued at net realizable value. The cost in respect of the various items of inventory is computed as under:

i) In respect of Raw Materials & Consumable Stores on FIFO basis.

ii) In respect of Work in process and Finished Goods, at weighted average cost of raw material plus conversion cost & packing cost incurred to bring the goods to their present condition & location.

iii) In respect of trading goods, on specific identification method.

E. Foreign Currency Transactions

i) Foreign Branch (Integral)

i) Fixed assets are translated at the rates on the date of purchase/acquisition of assets and Inventories are translated at the rates that existed when costs were incurred.

ii) All foreign currency monetary items outstanding at the year end are translated at the year-end exchange rates. Income and expenses are translated at average rates of exchange and depreciation is translated at the rates referred to in (a)(i) above for fixed assets. The resulting exchange gains & losses are recognized in the profit and loss account.

ii) Other foreign currency transactions

i) Transactions in foreign currency are accounted for at the exchange rate prevailing on the date of transaction except sales that are recorded at rate notified by the customs for invoice purposes. Such rate is notified in the last week of every month and is adopted for recording export sales of next month.

ii) Foreign currency monetary items are reported using the closing rate. Exchange differences arising on the settlement of monetary items or on reporting the same at balance sheet date are recognized as income or expenses in period in which they arise, except the exchange difference in case of fixed assets which have been adjusted to the cost of fixed assets.

iii) Foreign currency non monetary items, which are carried in terms of historical cost, are reported using exchange rate at the date of transaction.

F. Fixed Assets

i) Fixed Assets

Fixed Assets are stated at acquisition cost including inward freight, duties, taxes and incidental expenses relating to acquisition net of subsidy relating to specific fixed asset and accumulated depreciation.

ii) Capital work in progress

Capital work in progress includes cost of assets at site, construction expenditure, advances made for acquisition of capital assets and pre-operative expenditure pending allocation to fixed assets.

iii) Expenditure incurred during construction period

In respect of new/major expansion, the indirect expenditure incurred during implementation period upto the date of commencement of commercial production, which is attributable to the construction of the project, is capitalized on various categories of fixed assets on proportionate basis. The unallocated expenses are shown in pre-operative expenses.

G. i) Cenvat Credit

Cenvat Credit of excise duty paid on capital assets is recognized in accordance with the Cenvat Credit Rules, 2004.

ii) Excise Duty

Excise duty is accounted on production of finished goods.

H. Depreciation/Amortisation

i) Depreciation has been provided under Straight Line Method at the rates specified in Schedule XIV of Companies Act, 1956.

ii) The leasehold land is amortized over the lease period.

I. Borrowing Costs

Borrowing costs attributable to the acquisition or construction of qualifying assets are capitalized as part of such assets, up to the date when such assets are ready for intended use. Other borrowing costs are charged as expenditure in the year in which they are incurred.

J. Employee Benefits

i) Defined Contribution Plan

Contribution to Provident Fund is made in accordance with the provisions of the Employees Provident Fund and Miscellaneous Provision Act, 1952 and is charged to the profit and loss account.

ii) Defined Benefit Plans (Gratuity)

The Company has a defined benefit Gratuity plan covering all its employees. Gratuity is covered under a scheme of Life Insurance Corporation of India (LIC) and contribution in respect of such scheme is recognized in the Profit & Loss Account. The liability/ asset as at the Balance Sheet date is provided for based on the actuarial valuation carried out in accordance with Accounting Standard 15 on Employee Benefit.

iii) Leave with wages

Provision for earned leave due for the year is made on the actual valuation as at the close of the year.

K. Miscellaneous Expenditure

Preliminary Expenses are written off over a period of 5 years.

L. Accounting for Taxes on Income

Current Tax is determined as the amount of tax payable in respect of taxable income for the period after considering tax allowances & exemptions. Deferred Tax is recognized, subject to consideration of prudence, on timing differences, being the difference between taxable income and accounting income that originate in one period and capable of reversal in one or more subsequent periods.

M. Impairment of Assets

At each balance sheet date, an assessment is made whether any indication exists that an asset has been

impaired. If any such indication exists, an impairment loss i.e. the amount by which the carrying amount of an asset exceeds its recoverable amount is provided in the books of account.

N. Provisions and Contingent Liabilities

i) Provisions are recognized for liabilities that can be determined by using a substantial degree of estimation, if:

1) The company has a present obligation as a result of a past event;

2) A probable outflow of resources embodying economic benefits is expected to settle the obligation; and

3) The amount of the obligation can be reliably estimated

ii) Contingent liability is disclosed in the case of:

1) A present obligation arising from a past event when it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation or

2) A possible obligation, unless the probability of outflow of resources embodying economic benefits is remote.

O. Earnings per share

Basic earning per share is computed by dividing the net profit for the period attributable to equity shareholders by the weighted average number of shares outstanding during the period. Diluted earning per share is computed by taking into account the aggregate of the weighted average numbers of equity shares outstanding during the period and the weighted average number of equity shares which would be issued on conversion of all the dilutive potential equity shares into equity shares.

P . Basis of Incorporation of integral foreign operations

Figures in respect of the Companys overseas branch in United Arab Emirates have been incorporated on the basis of Financial Statement audited by the auditors of the branch.

Q. Operating Leases

Assets acquired on leases wherein a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Lease rentals paid for such leases are recognised as an expense on systematic basis over the term of lease.


Mar 31, 2010

A. Accounting Convention

The accounts are prepared on historical cost convention in accordance with the generally accepted accounting principles, the applicable accounting standards referred to in section 211 (3C) and other relevant provisions of the Companies Act, 1956.

B. Revenue Recognition

i) Sales

Revenue from sale of goods is recognized:

(i) when all the significant risks and rewards of ownership are transferred to the buyer and

- the company retains no effective control of the goods transferred to a degree usually

* associated with ownership: and (ii) No significant uncertainty exists regarding the amount of the consideration that will be derived from the sale of goods.

ii) Export Incentives

Revenue in respect of the above benefits is recognized on post export basis.

(iii) Dividend

Dividend income is recognized when the right to receive the payment is established.

|V) Interest

Interest Income is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

c. investments are carried at cost less provision, if any, for diminution in value which is other than temporary, and current investments are carried at lower of cost and fair value.

D. iSoSfare valued at cost or net realizable value, whichever is lower. The cost in respect of the

various items of inventory is computed as under:

i) In respect of Raw Materials & Consumable Stores on FIFO basis. matoriai

ii) In respect of Work in process and Finished Goods, at weighted average cost of raw matenal plus conversion cost & packing cost incurred to bring the goods to their present condition & location.

iii) In respect of trading goods, on specific identification method.

f Foreign finrrenr.v Transactions , .

1 Transactions in foreign currency are accounted for at the exchange rate prevailing on the date o transSon except sales that are recorded at rate notified by the customs for invoice purposes. Such rate is notified in the last week of every month and is adopted for recording

2 ^eTcurrencTmrtary items are reported using the closing rate. Exchange differences arising on the settlement of monetary items or on reporting the same at balance sheet date are recognized as income or expenses in period in which they arise, except the exchange difference in case of fixed assets which have been adjusted to the cost of fixed assets.

3. Foreign currency non monetary items, which are carried in terms of historical cost, are reported using exchange rate at the date of transaction.

F, Fixed Assets

fi) Fixed Assets

Fixed Assets are stated at acquisition cost including inward freight, duties, taxes and incidental expenses relating to acquisition net of subsidy relating to specific fixed asset and accumulated depredation.

(ii) Capital work in progress

Capital work in progress includes cost of assets at site, construction expenditure and advances made for acquisition of capital assets.

G. Cenvat Credit

Cenvat Credit on excise duty paid inputs, capital assets and inputs services is recognized in accordance with the Cenvat Credit Rules, 2004.

H. Depreciation/Amortisation

(i) Depreciation has been provided under Straight Line Method at the rates specified in Schedule XIV of Companies Act, 1956. Depreciation on assets costing Rs. 5000/- or below is charged @ 100% per annum on proportionate basis.

(ii) The leasehold land is amortized over the lease period.

I. Borrowing Costs

Borrowing costs attributable to the acquisition or construction of qualifying assets are capitalized as part of such assets, up to the date when such assets are ready for intended use. Other borrowing costs are charged as expenditure in the year in which they are incurred.

J. Employee Benefits

(i) Provident Fund:

Contribution to Provident Fund is made in accordance with the provisions of the Employees Provident Fund and Miscellaneous Provision Act, 1952 and is charged to the profit and loss account.

(ii) Gratuity:

The Company has a defined benefit Gratuity plan covering all its employees. Gratuity is covered under a scheme of Life Insurance Corporation of India (LIC) and contribution in respect of such scheme is recognized in the Profit & Loss Account. The liability/asset as at the Balance Sheet date is provided for based on the actuarial valuation carried out in accordance with Accounting Standard 15 on Employee Benefit.

(iii) Leave with wages

Provision for earned leave due for the year is made on the actual valuation as at the close of the year.

K. Expenditure incurred during construction period

In respect of new/major expansion, the indirect expenditure incurred during construction period upto the date of commencement of commercial production, which is attributable to the construction of the project, is capitalized on various categories of fixed assets on proportionate basis.

L Miscellaneous Expenditure

Preliminary Expenses are whtten of, over a period o, 5 years from the year in which the new unit commences production or operation.

M Accounting for Taxes on income

Current Tax is determined as the amount of tax period after considers tax allowances & between taxable income

subsequent periods.

N impairment of Assets

At each balance sheet date, an assessment is made whether any indication exists that an asset has been impaired. If any such indication exists,an impairment loss i.e. the amount by which the carrying amount of an asset of an asset exceeds its recovera ble amount is provided in the books of account.

O. Provisions a»rf Contingent Liabilities

Provisions are recognized for liabilities .ha. can be determined by using a substential degree of estimation,if:

a) the company has a present obligation as a result of a past event.

b) A probable outflow of resources embodying ecomomic venefits is expected to settle the obligation; and

c) The amount of the obligation can be reliably estimated

P.Faming per share

Basic earning per share is computed by dividingthe netprofit for the period attributable to equity shareholders by the the weighted average earning par share is computed by taking into account the line number of equity shares.



 
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