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Accounting Policies of Shree Pushkar Chemicals & Fertilisers Ltd. Company

Mar 31, 2015

Corporate Information

Shree Pushkar Chemicals & Fertilizers Limited (the "Company") is a closely held Public Limited Company domiciled in India and incorporated under the provisions of Companies Act, 1956. The company is engaged in the business of manufacturing and trading of Chemicals, Dyes and Dyes Intermediate, Cattle Feeds, Fertilizers and Soil Conditioner.

a. Basis of Preparation of Financial Statements

The financial statements have been prepared under historical cost convention and on accrual basis of accounting. The Company has prepared these financial statements in accordance with the Generally Accepted Accounting Principles in India and to comply in all material respects with the Accounting Standards notified under Companies (Accounting Standard) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 2013. The accounting policy adopted in preparation of the financial statements are consistent with those followed in previous year.

b. Use of Estimates

The preparation of financial statements in conformity with Generally Accepted Accounting Principles requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of financial statements and reported amount of revenues and expenses during the reporting period.

Difference between the actual results and estimates are recognized in the period in which the results are known/materialized.

c. Revenue Recognition

- Revenue from sale of goods is recognized net of rebates and discounts on transfer of significant risks and rewards of ownership to the buyer. Sale of goods is recognized gross of excise duty but net of sales tax and value added tax.

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

- Dividend on investment is recognized when the company's right to receive dividend is established.

d. Export Incentives

Export Incentives are accounted for on accrual basis to the extent considered receivable.

e. Tangible Assets

- Fixed Assets are stated at cost net of Cenvat/VAT (to the extent allowable as input credit), wherever applicable, less accumulated depreciation. Costs incurred for bringing relevant assets in working condition, including financing costs till the respective asset is put to use, are capitalized.

- Leasehold Land is stated at cost.

- Assets under installation/commissioning are shown under Capital Work-in-Progress in last year are capitalized & commissioned during the year for which installation certificate has been obtained..

f. Depreciation

- Depreciation on Tangible Fixed Assets is being provided on "Straight Line Method" basis at the rates and manner prescribed specified in Schedule to the Companies Act, 2013.

- Depreciation in respect of addition to the fixed assets is provided on Pro-rata Basis.

- Depreciation of Plant and Machinery is charged to multiple shifts.

q. Borrowing Costs

Borrowing Costs attributable to production, construction or acquisition of the qualifying assets are capitalized till the date the asset is put to use. Other borrowing costs are charged to Profit & Loss Account.

h. Investments

Long-term investments are carried at cost less provision for diminution other than temporary, if any, in value of such investments. Current investments are carried at lower of cost and fair value.

i. Inventories

Inventories of Raw Material, Finished Goods are valued at cost(including Non Moveable Taxes & Duties, Transportation) or Net Realizable Value, whichever is lower.

- Cost of Inventories comprise of cost of purchase, cost of conversion and other cost incurred in bringing the inventory to the present location and condition.

- Work in Progress is valued at cost, which includes direct cost and portion of overheads.

- Stores, Spares and Tools are being values at cost.

- Goods in Transit, if any, are stated at actual cost incurred up to the date of balance sheet.

- Valuation of Finished Goods includes central excise duty, which is considered as cost in accordance with Accounting Standard 2.

- Stock is taken as valued & certified by management.

j. Excise/Cenvat

Cenvat credit availed during the year is reduced from purchase cost and related fixed assets and added to convert receivable account. The adjustment against excise duty during the year is debited to excise duty paid account and credited to cenvat receivable account. Excise duty payable on finished goods lying at the factory premises at the close of the year is provided in the books as per the excise rules.

k. Pre IPO Expenses

Pre IPO expenses comprise of expenses related to proposed public issue of Equity Shares of the Company. The same shall be amortized against Securities Premium in the year of allotment of securities under the said public issue.

I. Foreign Currency Transactions

- Transactions in foreign currencies are stated at the rate of exchange prevailing on the date of transactions.

- Differences on account of fluctuation in the rate of exchange prevailing on the date of transaction and the date of realization are considered as revenue in nature unless context requires otherwise.

- Differences in translation of Current Assets and Current Liabilities remaining to be settled in foreign currency at the year-end are recognized in the Statement of Profit and Loss.

m. Taxes on Income

- Provision for current tax is made with reference to taxable income computed for the accounting period, for which the financial statements are prepared, applying the applicable income tax rates and provisions.

- Deferred tax is recognized, subject to the consideration of prudence, on timing differences being the difference between the taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Such deferred tax Assets are recognized and carried forward to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax asset can be realized.

n. Impairment of Assets

The carrying amounts of assets are reviewed at each Balance Sheet date. If there is any indication of impairment based on internal factors, i.e. when the carrying amount of the asset exceeds the recoverable amount, an impairment loss is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired. An impairment loss recognized in prior accounting periods is reversed or reduced if there has been a favorable change in the estimate or the recoverable amount. Recoverable amount is the higher of an asset's net selling price and value in use. After Recongestion of an impairment loss or reversal of an impairment loss, the depreciation charge for the assets is adjusted in future period to allocate the assets revised carrying amount, less its residual value(if any), over its remaining useful life.

o. Employees Retirement Benefit

- Short term benefit payable to employees wholly within twelve months of rendering services such as salaries, wages etc. are recognized in the period in which the employee renders the related service.

- Defined Contribution Plan

The Company's contribution to the state governed employees provident fund scheme is a defined contribution plan. The contribution paid/payable under the scheme is recognized during the period in which the employee renders the related service.

- Defined Benefit Plan

The Company has employees' gratuity fund scheme administered by a Trust managed by Life Insurance Corporation of India. The present value of the obligation is determined based on actuarial valuation carried out by Life Insurance Corporation of India using the projected unit credit method based on which the Company pays its contribution to the fund on periodic basis.

As per the policy of the Company, no leave encasement is allowed.

p. Provisions and Contingent Liabilities

The Company recognizes a provision when there is a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. 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 that the likelihood of outflow of resources is remote, no provision or disclosure is made.

q. Earnings Per Share

The Company reports basic and diluted Earnings Per Share (EPS) in accordance with the Accounting Standard 20 on Earning Per Share. Basic EPS is computed by dividing the net profit or loss for the year by the weighted average number of equity shares outstanding during the year.

Diluted EPS is computed by dividing the net profit or loss for the year by the weighted average number of equity shares outstanding during the year as adjusted for the effects of all dilutive potential equity shares, except where the results are anti-dilutive.

As per the records of the Company, including its register of the members and other declarations received from the shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownerships of shares.

Terms/rights attached to equity shares

The company has only one class of shares referred to as equity shares having Par value Of Rs. 10/- each. Each holder of equity shares is entitled to one vote per share.

A. Term Loans from Banks include:

Rs,22.00 Lacs (previous year Rs,316.05 Lacs) term loan from State Bank of India, where principal is repayable in 11 monthly installments of Rs,2.00 Lacs each up to February 2016. The remaining principal amount of loan is repayable as under:

B. The above term loans carry interest rate @ Base Rate 3.60%.

C. The above term loans are secured by way of Equitable mortgage of Factory Land & Building situated at MIDC, Lote Parshuram, Taluka Khed, District Ratnagiri, Maharashtra standing in the name of the Company and Hypothecation charge on Plant & Machinery and other movable assets situated at above plants.

D. The above term loans are further secured (along with working capital borrowings) by collateral security of the following:

a. Equitable mortgage on property at Goregaon owned by relative of the Director.

b. Equitable mortgage on plot of land situated at Nasik and owned by one of the Promoter-Directors.

c. Fixed Deposits amounting to Rs, 13.00 Lacs with State Bank of India standing in the name of the Company.

E. The above term loans are further secured by personal guarantee of Promoter Directors of the Company and relative of a director to the extent of her interest in property at Goregaon offered as Collateral Security.

F. Hire Purchase Loans amounting to Rs, 44.76 Lacs (previous year Rs, 98.70 Lacs) are secured against respective assets financed. The loans carry interest rates ranging between 10% to 12%. The loans are repayable in 24 to 48 equated monthly installments starting from respective date of finance.

G. Corporate Loan amounting to Rs, Nil Lacs (Previous year Rs, 500 Lacs ) carries interest rate @ 15% per annum and is secured against pledge of 26,04,000 equity shares of the Company held by Mr. Punit Makharia. The said loan is further secured by personal guarantee of Promoter- Directors of the Company. The loan shall be repaid by way of 11 equal quarterly installments of Rs, 42 Lacs each and last installment of Rs, 38 Lacs starting April 2014. This corporate Loan is fully repaid on 28/05/2014.

A. Loans repayable on demand (along with non-fund based working capital limits) are secured by Hypothecation of entire current assets of the Company.

B. The above loans are further secured by way of collateral security in form of Equitable mortgage of Factory Land & Building situated at MIDC, Lote Parshuram, Taluka Khed, District Ratnagiri, Maharashtra standing in the name of the Company and Hypothecation charge on Plant & Machinery and other movable assets situated at above plants.

C. The above loans (along with term loans) are further secured by collateral security of the following:

a. Equitable mortgage on B/1-42, 4th Floor, Gagan Complex,, Gokuldham, Goregaon(e), owned by relative of a director

b. Fixed Deposits amounting to Rs, 13.00 Lacs with State Bank of India standing in the name of the Company

D.The above loans are further secured by personal guarantee of Promoter Directors of the Company and relative of one of the Promoter-Directors to the extent of her interest in the property at Goregaon offered as Collateral Security.


Mar 31, 2013

Corporate Information

Shree Pushkar Chemicals & Fertilizers Limited (the "Company") is a closely held Public Limited Company domiciled in India and incorporated under the provisions of Companies Act, 1956. The company is engaged in the business of manufacturing and trading of Chemicals, Dyes and Dyes Intermediate, Cattle Feeds, Fertilizers and Soil Conditioner.

a. Basis of Preparation of Financial Statements

The financial statements have been prepared under historical cost convention and on accrual basis of accounting. The Company has prepared these financial statements in accordance with the Generally Accepted Accounting Principles in India and to comply in all material respects with the Accounting Standards notified under Companies (Accounting Standard) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The accounting policy adopted in preparation of the financial statements are consistent with those followed in previous year.

b. Use of Estimates

The preparation of financial statements in conformity with Generally Accepted Accounting Principles requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of financial statements and reported amount of revenues and expenses during the reporting period.

Difference between the actual results and estimates are recognized in the period in which the results are known/materialized.

c. Revenue Recognition

- Revenue from sale of goods is recognized net of rebates and discounts on transfer of significant risks and rewards of ownership to the buyer. Sale of goods is recognized gross of excise duty but net of sales tax and value added tax.

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

- Dividend on investment is recognized when the company's right to receive dividend is established.

d .Export Incentives

Export Incentives are accounted for on accrual basis to the extent considered receivable.

e. Tangible Assets

- Fixed Assets are stated at cost net of Cenvat/VAT (to the extent allowable as input credit), wherever applicable, less accumulated depreciation. Costs incurred for bringing relevant assets in working condition, including financing costs till the respective asset is put to use, are capitalized.

- Leasehold Land is stated at cost.

- Assets under installation/commissioning are shown under Capital Work-in-Progress.

f. Depreciation

- Depreciation on Tangible Fixed Assets is being provided on "Straight Line Method" basis at the rates and manner prescribed specified in Schedule XIV to the Companies Act, 1956.

- Depreciation in respect of addition to the fixed assets is provided on Pro-rata Basis.

- Depreciation of Plant and Machinery is charged to multiple shifts.

g. Borrowing Costs

Borrowing Costs attributable to production, construction or acquisition of the qualifying assets are capitalized till the date the asset is put to use. Other borrowing costs are charged to Profit & Loss Account.

h. Investments

Long-term investments are carried at cost less provision for diminution other than temporary, if any, in value of such investments. Current investments are carried at lower of cost and fair value.

i. Inventories

- Inventories of Raw Material, Finished Goods are valued at cost or Net Realizable Value, whichever is lower.

- Cost of Inventories comprise of cost of purchase, cost of conversion and other cost incurred in bringing the inventory to the present location and condition.

- Work in Progress is valued at cost, which includes direct cost and portion of overheads.

- Stores, Spares and Tools are being values at cost.

- Goods in Transit, if any, are stated at actual cost incurred up to the date of balance sheet.

- Valuation of Finished Goods includes central excise duty, which is considered as cost in accordance with Accounting Standard 2.

j. Excise/Cenvat

Cenvat credit availed during the year is reduced from purchase cost and related fixed assets and added to Cenvat receivable account. The adjustment against excise duty during the year is debited to excise duty paid account and credited to Cenvat receivable account. Excise duty payable on finished goods lying at the factory premises at the close of the year is provided in the books as per the excise rules.

k. Share Issue Expenses

Share issued expenses comprise of expenses related to proposed public issue of Equity Shares of the Company. The same shall be amortized against Securities Premium in the year of allotment of securities under the said public issue.

l. Foreign Currency Transactions

- Transactions in foreign currencies are stated at the rate of exchange prevailing on the date of transactions.

- Differences on account of fluctuation in the rate of exchange prevailing on the date of transaction and the date of realization are considered as revenue in nature unless context requires otherwise.

- Differences in translation of Current Assets and Current Liabilities remaining to be settled in foreign currency at the year-end are recognized in the Statement of Profit and Loss.

- The premium or discount in respect of forward exchange contract is amortized over the life of contract. The net gain or losses on account of any exchange difference, cancellation or renewal of such forward exchange contracts are recognized in the statement of Profit and Loss in the reporting period.

m. Taxes on Income

- Provision for current tax is made with reference to taxable income computed for the accounting period, for which the financial statements are prepared, applying the applicable income tax rates and provisions.

- Deferred tax is recognized, subject to the consideration of prudence, on timing differences being the difference between the taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Such deferred tax Assets are recognized and carried forward to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax asset can be realized.

n. Impairment of Assets

The carrying amounts of assets are reviewed at each Balance Sheet date. If there is any indication of impairment based on internal factors, i.e. when the carrying amount of the asset exceeds the recoverable amount, an impairment loss is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired. An impairment loss recognized in prior accounting periods is reversed or reduced if there has been a favorable change in the estimate or the recoverable amount. Recoverable amount is the higher of an asset's net selling price and value in use.

o. Employees Retirement Benefit

- Short term benefit payable to employees wholly within twelve months of rendering services such as salaries, wages etc. are recognized in the period in which the employee renders the related service.

- Defined Contribution Plan

The Company's contribution to the state governed employees provident fund scheme is a defined contribution plan. The contribution paid/payable under the scheme is recognized during the period in which the employee renders the related service.

value of the obligation is determined based on actuarial valuation carried out by Life Insurance Corporation of India using the projected unit credit method based on which the Company pays its contribution to the fund on periodic basis.

- As per the policy of the Company, no leave encasement is allowed.

p. Provisions and Contingent Liabilities

The Company recognizes a provision when there is a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. 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 that the likelihood of outflow of resources is remote, no provision or disclosure is made.

q. Earnings Per Share

The Company reports basic and diluted Earnings Per Share (EPS) in accordance with the Accounting Standard 20 on Earning Per Share. Basic EPS is computed by dividing the net profit or loss for the year by the weighted average number of equity shares outstanding during the year.

Diluted EPS is computed by dividing the net profit or loss for the year by the weighted average number of equity shares outstanding during the year as adjusted for the effects of all dilutive potential equity shares, except where the results are anti-dilutive.

A The Company has only one class of shares referred to as equity shares having par value of Rs. 10 each. Each holder of equity shares is entitled to one vote per share.

B In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

As per the records of the company, including its register of the members and other declarations received from the shareholders regarding beneficial interest, the above shareholding represent both legal and beneficial ownerships of shares.

A Term Loans from Banks include:

a. Rs, Nil (previous year Rs, 290.90 Lacs) term loan from State Bank of India.

b. Rs, 345.29 Lacs (previous year Rs, 659.32 Lacs) term loan from State Bank of India, where principal is repayable in 13 monthly installments of Rs, 26.08 Lacs each.

c. Rs, 251.47 Lacs (previous year Rs, 329.93 Lacs) term loan from State Bank of India. The remaining principal amount of loan is repayable as under:

B The above term loans carry interest rate @ Base Rate 3.60%.

C The above term loans are secured by way of Equitable mortgage of Factory Land & Building situated at MIDC, Lote Parshuram, Taluka Khed, District Ratnagiri, Maharashtra standing in the

Note: During the year, the Company has transferred Money Received against Share Warrants amounting to Rs, 29,22,525/- to Capital Reserve due to non-allotment of Equity Shares.

name of the Company and Hypothecation charge on Plant & Machinery and other movable assets situated at above plants.

D The above term loans are further secured (along with working capital borrowings) by collateral security of the following:

a. Equitable mortgage on property at Goregaon jointly owned by relative of the Director.

b. Equitable mortgage on plot of land situated at Nasik and owned by one of the Promoter- Directors.

c. Fixed Deposits amounting to Rs,13.00 Lacs with State Bank of India standing in the name of the Company.

d. ' 418.93 Lacs (previous year Rs, Nil) term loan from State Bank of India, against sanctioned amount of Rs, 600.00 Lacs, repayable as under:

E The above term loans are further secured by personal guarantee of Promoter Directors of the Company and relative of a director to the extent of her interest in property at Goregaon offered as Collateral Security.

F Hire Purchase Loans amounting to Rs, 128.71 Lacs (previous year Rs, 101.52 Lacs) are secured against respective assets financed. The loans carry interest rates ranging between 10% to 12%. The loans are repayable in 24 to 48 equated monthly installments starting from respective date of finance.

G Corporate Loan amounting to Rs, 500 Lacs (Previous year Rs, Nil) carries interest rate @ 15% per annum and is secured against pledge of 26,04,000 equity shares of the Company held by Mr. Punit Makharia. The said loan is further secured by personal guarantee of Promoter- Directors of the Company. The loan shall be repaid by way of 11 equal quarterly installments of Rs, 42 Lacs each and last installment of Rs, 38 Lacs starting April 2014.

A Loans repayable on demand (along with non-fund based working capital limits) are secured by Hypothecation of entire current assets of the Company.

B The above loans are further secured by way of collateral security in form of Equitable mortgage of Factory Land & Building situated at MIDC, Lote Parshuram, Taluka Khed, District Ratnagiri, Maharashtra standing in the name of the Company and Hypothecation charge on Plant & Machinery and other movable assets situated at above plants.

C The above loans (along with term loans) are further secured by collateral security of the following:

a. Equitable mortgage on property at Goregaon owned by relative of a director

b. Equitable mortgage on plot of land situated at Nasik and owned by Mr. Punit Makharia

c. Fixed Deposits amounting to Rs,13.00 Lacs with State Bank of India standing in the name of the Company

D The above loans are further secured by personal guarantee of Promoter Directors of the Company and relative of one of the Promoter-Directors to the extent of her interest in the property at Oregano offered as Collateral Security.

A The company has no information as to whether any of its suppliers constitute Micro, Small or Medium Enterprises and therefore, the claims for suppliers and other related details as per the provisions of Micro, Small or Medium Enterprises Development Act, 2006 could not be ascertained.

B Trade Payable due to others include Rs, 1,023.80 Lacs (previous year Rs, 1,462.80 Lacs) towards outstanding against Letters of Credit.


Mar 31, 2012

1. CORPORATE INFORMATION

M/s. Shree Pushkar Chemicals & Fertilizers Limited (the company) is a Public limited company domiciled in India and incorporated under the companies Act 1956. The company is engaged in the business of manufacturing and trading of dyes and dyes intermediate, cattle feeds, fertilizers and soil conditioner.

a. Basis of Preparation of Financial Statements:

The financial statements are prepared under the historical cost convention on an accrual basis of accounting in accordance with the Generally Accepted Accounting Principles, Accounting Standards notified under Section 211(3C) of the Companies Act, 1956 and the relevant provisions thereof.

During the year, Revised Schedule VI notified under the Companies Act, 1956 has become applicable to the Company for preparation and presentation of its financial statements. The Company has reclassified the previous year figures in accordance with the requirements applicable in the current year.

b. Use Of Estimates :

The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimate are recognized in the period in which the results are known /materialized.

c. Revenues Recognition:

- Revenue from sale of goods is recognized net of rebates and discounts on transfer of significant risks and rewards of ownership to the buyer. Sale of goods is recognized gross of excise duty but net of sales tax and value added tax.

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

- Dividend on investment is recognized when the company's right to receive dividend is established.

d. Export Incentives:

Export benefits are accounted for on accrual basis to the extent considered receivable

e. Tangible Assets:

- Fixed Assets are stated at cost net of Cen vat, wherever applicable less accumulated depreciation. Costs including financing costs till commencement of commercial production are capitalized.

- Leasehold Land is stated at cost.

- Assets under installation/commissioning are shown under the head capital work in progress.

f. Depreciation:

- Depreciation on fixed assets is being provided on "Straight line method" basis at the rates specified in Schedule XIV to the Companies Act, 1956.

- Depreciation in respect of addition to the fixed assets is provided on Pro- rata basis.

- Depreciation of Plant & Machinery is charge to multiple shifts.

g. Borrowing Cost:

Borrowing Costs attributable to production, Construction or acquisition of the qualifying assets are capitalized till the date the assets are ready to use. Other borrowing costs are charged to Profit & Loss account

h. Investments:

Long-term investments are carried at cost less provision for diminution other than temporary, if any, in value of such investments. Current investments are carried at lower of cost and fair value.

i. Inventories:

- Inventories of Raw Material, Finished Goods are valued at cost or Net Realizable Value whichever is lower.

- Cost of Inventories comprise of all cost of purchase, cost of conversion and other cost incurred in bringing the inventory to the present location and condition.

- Work in progress is valued at cost, which includes direct cost and portion of overheads.

- Stores, spares and tools are being values at cost.

- Goods in transit, if any are stated at actual cost up to the date of balance sheet.

- Valuation of finished goods includes central excise duty, which is considered as cost in accordance with the accounting standard (AS-2).

j. Excise /Cen vat:

Cen vat credit availed during the year is reduced from purchase cost and fixed assets and added to canvas receivable account. The adjustment against excise duty paid during the year is debited to excise duty paid account and credited to canvas receivable account. Excise duty payable on finished goods lying at the factory premises at the close of the year is provided in the books as per the excise rules.

k. Share Issue Expenditure:

Share issued expenses to be amortized after successful subscription of public issue.

l. Foreign Currency Transactions:

- The transactions in foreign currencies are stated at the rate of exchange prevailing on the date of transactions.

- The difference on account of fluctuation in the rate of exchange prevailing on the date of transaction and the date of realization is treated as revenue.

- Differences on translations of Current Assets and Current Liabilities remaining unsettled at the year-end are recognized in the Statement of Profit and Loss.

- The premium or discount in respect of forward exchange contract is amortized over the life of contract. The net gain or losses on account of any exchange difference, cancellation or renewal of such forward exchange contracts are recognized in the Statement of Profit & Loss in the reporting period.

m. Taxes on Income:

- Provision for current Tax is made with reference to taxable income computed for the accounting period, for which the financial statements are prepared by the tax rates as applicable.

- Deferred tax is recognized subject to the consideration of prudence, on timing differences being the difference between taxable incomes and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Such deferred tax is quantified using the tax rates and laws enacted / substantively enacted as on the Balance Sheet date. Deferred tax Assets are recognized and carried forward to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax asset can be realized.

n. Impairment of assets:

The carrying amounts of assets are reviewed at each Balance Sheet date. If there is any indication of impairment based on internal or external factors, i.e. when the carrying amount of the asset exceeds the recoverable amount, an impairment loss is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired. An impairment loss recognized in prior accounting periods is reversed or reduced if there has been a favorable change in the estimate or the recoverable amount. Recoverable amount is the higher of an asset's net selling price and value in use.

o. Employees Retirement Benefit:

Short term benefit payable to employees wholly within twelve months of rendering services such as salaries, wages etc. are recognized in the period in which the employee renders the related service.

Defined Contribution Plan: The Company's contribution to the state governed employees provident fund scheme is a defined contribution plan. The contribution paid/ payable under the scheme is recognized during the period in which the employee renders the related service.

Defined Benefit Plan: The Company's employee's gratuity fund scheme managed by a Trust (Life Insurance Corporation of India) is defined benefit plan. The present value of the obligation is determined based on actuarial valuation using the projected unit credit method.

As per the policy of the company no leave encasement is allowed.


Mar 31, 2011

1. Basis of Preparation of Financial Statements:

The Financial statements have been prepared under the historical cost convention and on accrual basis in accordance with the generally accepted accounting principles in India and the provisions of the companies Act, 1956.

2. Use Of Estimates :

The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimate are recognised in the period in which the results are known /materialised.

3. Revenues Recognition:

Revenue from the sale of goods is recognised upon passage of title of goods to the customers, which generally coincides with their delivery. Dividend on investment is recognised when the right to receive is established.

4. Fixed Assets:

a) Fixed Assets are stated at cost net of Cenvat, wherever applicable less accumulated depreciation. Costs including financing costs till commencement of commercial production are capitalized.

b) Land is stated at cost.

c) Assets under installation/commissioning are shown under the head capital work in progress, which includes advance for capital goods.

5. Depreciation:

a) Depreciation on fixed assets is being provided on "Straight line method" basis at the rates specified in Schedule XIV to the Companies Act, 1956

b) Depreciation in respect of addition to the fixed assets is provided on Pro- rata basis.

c) Depreciation of Plant & Machinery is charge to multiple shifts.

6. Borrowing Cost:

Borrowing Costs attributable to production, Construction or acquisition of the qualifying assets are capitalized till the date the assets are ready to use. Other borrowing costs are charged to Profit & Loss account

7. Investments:

Long-term investments are being valued at cost of acquisition.

8. Inventories:

a) Inventories of raw material, finished goods are valued at cost or net realisable value whichever is lower.

b) Cost of Inventories comprise of all cost of purchase, cost of conversion and other cost incurred in bringing the inventory to the present location and condition.

c) Work in progress is valued at cost, which includes direct cost and portion of overheads.

d) Stores, spares and tools are being values at cost

e) Goods in transit, if any are stated at actual cost up to the date of balance sheet

f) Valuation of finished goods includes central excise duty, which is considered as cost in accordance with the accounting standard (AS-2).

9. Excise /Cenvat:

Cenvat credit availed during the year is reduced from purchase cost and fixed assets and added to cenvat receivable account. The adjustment against excise duty paid during the year is debited to excise duty paid account and credited to cenvat receivable account. Excise duty payable on finished goods lying at the factory premises at the close of the year is provided in the books as per the excise rules.

10. Export Incentives:

Export benefits are accounted for on accrual basis to the extent considered receivable

11. Differed Revenue Expenditure:

Share issued expenses to be amortised after successful subscription of public issue.

12. Sales and Purchase:

a) Sales and purchases are stated net of returns.

b) Sales are shown inclusive of Excise duty.

c) Purchases are stated at net of Cenvat credit wherever applicable.

13. Foreign Currency Transactions:

a) Recorded at the exchange rate prevailing on the date of transactions.

b) Current assets and current liabilities (other than covered by forward contract or negotiations) are restated exchange rates prevailing at the year end.

c) Any gain /loss on exchange fluctuation are reflected in profit & loss account in revenue items.

d) Exchange differences relating to fixed assets are adjusted to the cost of assets.

14. Taxes on Income:

Provision for current tax is made on the relevant provision of the income tax Act, 1961. Deferred tax for the timing differences between books and tax profit for the year is accounted for using the tax rate that have been substantively enacted as of the balance sheet date. Deferred that assets are recognised to the extent there is virtual/ reasonable certainty that this will be realized in future.

15. Impairment of assets:

At each balance sheet date the company review whether there is any indication of impairment of the carrying amount of the company's fixed assets. If any indication exits, an asset's recoverable amount is estimated. An impairment loss is recognised whenever the carrying amount of assets exceeds its recoverable amount and charged to profit & loss account in the year in which assets is identified as impaired. The recoverable is greater of the net selling price and value is use. In assessing value in use, the estimate future cash flows are discounted to their present value based on an appropriate discount factor. The impairment loss recognised in prior accounting periods is reversed if there has been changed in the estimate of recoverable amount.

16. Employees Retirement Benefit:

Short term benefit payable to employees wholly within twelve months of rendering services such as salaries, wages etc. are recognised in the period in which the employee renders the related service.

Defined Contribution Plan: The Company's contribution to the state governed employees provided fund scheme is a defined contribution plan. The contribution paid/ payable under the scheme is recognized during the period in which the employee renders the related service.

Defined Benefit Plan: The company's employees gratuity fund scheme managed by a Trust ( Life Insurance Corporation of India ) is defined benefit plan. The present value of the obligation is determined based on actuarial valuation using the projected unit credit method.

 
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