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Accounting Policies of Shreyans Industries Ltd. Company

Mar 31, 2014

(a) Basis of Preparation of Financial Statements

The financial statements are prepared on accrual basis under the historical cost convention in accordance with the accounting standards referred to in sub-section(3C) of section 211 and other relevant provisions of the Companies Act, 1956.

(b) Use of Estimates

The preparation of financial statements, in conformity with the generally accepted accounting principles, require estimates and assumptions to be made that affect the reported amount of assets and liabilities as of the date of the financial statements and the 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

(i) Revenue from sale is recognised;

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

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

(ii) The revenue in respect of export incentives is recognised on post export basis.

(iii) Revenue from interest is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

(iv) Dividend from investment is recognized when the right to receive payment is established.

(v) Revenue in respect of claims is recognized when no significant uncertainty exists with regard to the amount to be realized and the ultimate collection thereof.

(d) Employees Benefits

(i) Short Term Employees Benefits

Short Term Employees Benefits are recognized as an expense on an undiscounted basis in the statement of profit and loss of the year in which the related service is rendered.

(ii) Post Employment Benefits

Defined Contribution Plan:

Contribution to provident fund is made in accordance with the provisions of the Employee''s Provident Fund and

Miscellaneous Provisions Act, 1952 and is recognized as an expense in the statement of profit and loss.

Defined Benefit Plans:

(a) Gratuity:

The Group Gratuity Cash Accumulation Scheme , managed by Life Insurance Corporation of India is a defined benefit plan. The liability for gratuity is provided on actuarial basis. The Present Value of the company''s obligation is determined on the basis of actuarial valuation at the year end using the projected unit credit method and the fair value of plan assets is reduced from the gross obligations under the gratuity scheme to recognize the obligation on a net basis.

(b) Leave Encashment

Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related services are recognised as a liability at the present value of the defined benefit obligation at the Balance Sheet date, determined based on actuarial valuation using Projected Unit Credit Method. The discount rates used for determining the present value of the obligation under defined benefit plan, are based on the market yields on Government Securities as at the Balance Sheet date.

(iii) The actuarial gain/loss is recognized in the statement of profit and loss in the period in which they occur.

(e) Fixed Assets

(i) Fixed assets are stated at historical cost less accumulated depreciation.

(ii) Cost of fixed assets comprises its purchase price and any attributable expenditure (direct and indirect) for bringing an assets to its working condition for its intended use.

(iii) Expenditure incurred on renovation/modernisation on the existing fixed assets is added to the book value of these assets where such renovation/modernisation increases the future benefit from them beyond their previously assessed standard of performance.

(f) Intangible Assets

Intangible assets are stated at cost less accumulated amount of amortisation.

(g) Depreciation

i) Depreciation is provided on straight line method in accordance with and in the manner specified in Schedule XIV to the Companies Act, 1956.

ii) Assets costingt5000/- or less acquired during the year are depreciated at 100%.

(h) Amortisation

Intangible asset are amortised on straight line method. These assets are amortised over their estimated useful life.

(i) CENVAT

Cenvat credit on excise duty/service tax paid on inputs, capital assets and input services is taken in accordance with the Cenvat Credit Rules, 2004.

(j) Inventories

Inventories are valued at cost or net realisable value, whichever is lower. The cost in respect of items of inventory is computed as under:

- In case of raw materials at FIFO basis plus direct expenses.

- In case of stores and spares at weighted average cost plus direct expenses.

- In case of work-in-progress at raw material cost plus conversion cost depending upon the stage of completion.

- In case of finished goods at raw material cost plus conversion cost, packing cost, excise duty and other overheads incurred to bring the goods to their present condition and location.

(k) Investments

Long term Investments are stated at cost less provision, if any, for decline in the value of such investments, which is other than temporary. Current investments are stated at lower of cost and fair value.

(l) Foreign Currency Transactions

(a) Transactions in foreign currency are recorded on initial recognition in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of transaction except in case of export invoices which are recorded at a rate notified by the custom department for invoice purpose which approximates the actual rate as at the date of transaction. Exchange difference arising on realization of export sale is recognized as income or expense in the period in which they arise.

(b) At each balance sheet date foreign currency monetary items are reported at closing rates. Exchange differences arising on settlement of monetary items or on reporting the same at closing rate as at balance sheet date are recognized as income or expense.

(c) The premium or discount arising at the inception of a forward contract which is not intended for trading or speculation purpose is amortised as expense or income over the life of the contract. Exchange difference on such forward contracts is recognized in the statement of profit or loss in the reporting period in which the exchange rates change. Any profit or loss arising on cancellation or renewal of a forward contract is recognised as income or as expense for the period

(m) Borrowing Costs

Borrowing costs that are directly attributable to acquisition or construction of a qualifying asset are capitalised as a part of cost of such asset. Qualifying asset is one that takes substantial period of time to get ready for its intended use. All other borrowing costs are recognised as expenditure in the period in which these are incurred.

(n) Government grants and subsidies

Government grants available to the company are recognized when there is a reasonable assurance of compliance with the conditions attached to such grants and when benefits in respect thereof have been earned and it is reasonably certain that the ultimate collection will be made. Government subsidy in the nature of promoter''s contribution is credited to capital reserve. Government subsidy related to specific fixed assets is deducted from the gross value of the assets concerned.

(o) 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.

(p) Accounting for Taxes on Income

Provision for taxation for the year comprises of current tax and deferred tax. Current tax is amount of Income-tax determined to be payable in accordance with the provisions of Income tax Act 1961. Deferred tax is the tax effect of timing difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

(q) Provision and Contingent Liabilities

(i) Provision is recognised when:

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

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

(c) the amount of the obligation can be reliably estimated.

(ii) Contingent liability is disclosed in case there is:

(a) Possible obligation that arises from past events and existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the enterprise ; or

(b) a present obligation arising from past events but is not recognised :

i. when it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or

ii. a reliable estimate of the amount of the obligation cannot be made.

(r) Earning per Share

Basic earning per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.For the purpose of calculating diluted earning per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares.

(s) Lease

The assets acquired on lease wherein a significant portion of risks and rewards of ownership of an asset is 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 terms of lease.

(t) Cash flow statement

The cash flow statement has been prepared in accordance with the Accounting Standard (AS) - 3 on "Cash flow statements” issued by the Companies (Accounting Standard) Rules, 2006.

b) Terms/ rights attached to equity shares

The company presently has one class of equity shares having par value of *10/- each. Each holder of equity shares is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting and entitlement to dividend to an equity shareholder shall arise after such approval.

In the event of liquidation of the company, the holders of equity shares will be entitled to receive any part 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 shareholder.

The rate of dividend on preference shares will be decided by the Board of directors as and when issued. Preferential shares as and when issued shall have the cumulative right to receive dividend as and when declared and shall have preferential right of repayment of amount of capital.

The company has declared dividend @ 12 % (previous year 10 %) during the year ended March 31, 2014.

c) Detail of Shares held by holding company/ ultimate holding company their subsidiaries and associates

There is no holding /ultimate holding company of the company and therefore no subsidiary/associate of holding / ultimate holding company.

a) Details of security for term loans

i) Term loans from banks (other than vehicles) are secured by a joint equitable mortgage created or to be created on immovable properties both present and future, situated at Ahmedgarh and Banah in the state of Punjab and hypothecation of whole of movable plant and machinery, machinery spares, tools and accessories and other movable, both present and future ( save and except book debts ) subject to the charge created or to be created by the company in favour of its bankers for its working capital loans. Term loans from banks are also personally guaranteed by promoter directors of the company.

ii) Term loans from banks for vehicles are secured by way of hypothecation of vehicles purchased out of such loans.

b) Terms of repayment of term loans from banks

i) Term loan from State Bank of Patiala amounting to Rs. 910.00 lacs (including current maturities of long term debt) carries interest @ 13.75% p.a. The loan is repayable in 13 quarterly instalments of Rs. 70.00 lacs each (Previous year Rs. 1190.00Lacs).

ii) Vehicle loan from ICICI Bank Limited amounting to Rs. 4.94 lacs (including current maturities of long term debt) carries interest @ 11.19% p.a. The loan is repayable in 35 monthly instalments (including interest) of Rs. 16725/- each (Previous yearRs. 6.31 Lacs).

iii) Vehicle loan from ICICI Bank Limited amounting to Rs. 5.34 lacs (including current maturities of long term debt) carries interest @ 10.57% p.a. The loan is repayable in 11 monthly instalments (including interest) of Rs. 51600/- each (Previous yearRs. 10.66 Lacs).

iv) Vehicle loan from ICICI Bank Limited amounting to Rs. 9.37 lacs (including current maturities of long term debt) carries interest @ 9.82% p.a. The loan is repayable in 12 monthly instalments (including interest) of Rs. 82992/- each (Previous year Rs. 17.94 lacs).

v) Vehicle loan from ICICI Bank Limited amounting to Rs. 4.71 lacs (including current maturities of long term debt) carries interest @ 11.00% p.a. The loan is repayable in 17 monthly instalments (including interest) of Rs.30170/- each (Previous yearRs. 7.63 lacs).

vi) Vehicle loan from HDFC Bank Limited amounting to Rs. 0.26 lacs (including current maturities of long term debt) carries interest @ 11.25% p.a. The loan is repayable in 2 monthly instalments (including interest) of Rs. 13020/- each (Previous yearRs. 1.70 Lacs).

vii) Vehicle loan from HDFC Bank Limited amounting to Rs. 1.73 lacs (including current maturities of long term debt) carries interest @ 10.72% p.a. The loan is repayable in 5 monthly instalments (including interest) of Rs. 35550/- each (Previous year Rs. 5.58Lacs).

viii) Vehicle loan from HDFC Bank Limited amounting to Rs. 5.54 lacs (including current maturities of long term debt) carries interest @ 10.84% p.a. The loan is repayable in 17 monthly instalments (including interest) of Rs. 35300/- each (Previous year Rs. 8.97 lacs).

ix) Vehicle loan from HDFC Bank Limited amounting to Rs. 2.65 lacs (including current maturities of long term debt) carries interest @ 9.82% p.a. The loan is repayable in 18 monthly instalments (including interest) of Rs. 16015/- each (Previous year Rs.4.20 lacs).

x) Vehicle loan from HDFC Bank Limited amounting to Rs. 5.07 lacs (including current maturities of long term debt) carries interest @ 8.90% p.a. The loan is repayable in 22 monthly instalments (including interest) of Rs. 25256/- each (Previous yearRs. 7.48 lacs).

xi) Vehicle loan from HDFC Bank Limited amounting to Rs.5.76lacs (including current maturities of long term debt) carries interest @ 11.00% p.a. The loan is repayable in 21 monthly instalments (including interest) of Rs.30390/- each (Previous yearRs. 8.56 lacs).

xii) Vehicle loan from HDFC Bank Limited amounting to Rs. 2.55 lacs (including current maturities of long term debt) carries interest @ 10.70% p.a. The loan is repayable in 22 monthly instalments (including interest) of Rs. 12912/- each (Previous year Rs.3.74 lacs).

xiii) Vehicle loan from HDFC Bank Limited amounting toRs. 2.54 lacs (including current maturities of long term debt) carries interest @ 9.50% p.a. The loan is repayable in 22 monthly instalments (including interest) of Rs. 12712/- each (Previous yearRs. 3.75 lacs).

xiv) Vehicle loan from HDFC Bank Limited amounting to Rs. 4.55 lacs (including current maturities of long term debt) carries interest @ 10.23% p.a. The loan is repayable in 33 monthly instalments (including interest) of Rs.16050/- each (Previous yearRs. Nil).

xv) Vehicle loan from HDFC Bank Limited amounting to Rs. 6.71 lacs (including current maturities of long term debt) carries interest @ 9.20 % p.a. The loan is repayable in 30 monthly instalments (including interest) of Rs. 25320/- each (Previous yearRs. Nil).

xvi) Vehicle loan from ICICI Bank Limited amounting to Rs.1.43 lacs (including current maturities of long term debt) carries interest @ 11.13% p.a. The loan is repayable in 16 monthly instalments (including interest) of Rs.9750/- each (Previous yearRs. 2.38 lacs).

xvii) Vehicle loan from ICICI Bank Limited amounting to Rs. 3.33 lacs (including current maturities of long term debt) carries interest @ 10.04% p.a. The loan is repayable in 19 monthly instalments (including interest) of Rs. 19056/- each (Previous year Rs. 5.19 lacs). cviii) Vehicle loan from ICICI Bank Limited amounting to Rs. 5.75 lacs (including current maturities of long term debt) carries interest @ 9.82% p.a. The loan is repayable in 21 monthly instalments (including interest) of Rs.25536/- each (Previous yearRs. Nil).

xix) Vehicle loan from Axis Bank Limited amounting to Rs. 51.54 lacs (including current maturities of long term debt) carries interest @ 9.76% p.a. The loan is repayable in 43 monthly instalments (including interest) of Rs. 142528/- each (Previous yearRs. 63.00 lacs).

c) Terms of repayment of term loans from others

i) Repayment schedule of unsecured loans/deposits from related parties is within period of 2 years and carry interest upto 11 % p.a (Previous year upto 11% p.a)

ii) Repayment schedule of unsecured loans/deposits from public is within period of 2 years and carry interest upto 11 % p.a (Previous year upto 11% p.a)

a) Details of security of loans repayable on demand (secured)

i) Secured loans repayable on demand from banks for working capital (* 1149.78 lacs, previous year 11692.81 lacs ) are secured by hypothecation of stocks of raw materials,finished goods, bills receivables, book debts and all other movable assets of the company and further secured by way of second charge on the immovable assets situated at village Banah and at Ahmedgarh and also personally guaranteed by the two promotor directors of the company.

ii) Secured loans repayable on demand from banks against overdraft limit (* 1428.24 lacs, previous year t 0.16 lacs) are secured by lien on current investments.

b) Terms of repayment of short term borrowings

i) Working capital borrowings from banks are repayable on demand and carry interest @ 3% over base rate (Previous year @ 3% over base rate).

ii) Unsecured loans from related parties repayable within one year carry interest upto 11% p.a (Previous year upto 11% p.a).

iii) Unsecured loans from public repayable within one year carry interest upto 11% p.a (Previous year upto 11% p.a).


Mar 31, 2013

(a) BASIS OF PREPARATION OF FINANCIAL STATEMENTS

The financial statements are prepared on accrual basis under the historical cost convention in accordance with the accounting standards referred to in sub-section(3C) of section 211 and other relevant provisions of the Companies Act, 1956.

(b) USE OF ESTIMATES

The preparation of financial statements, in conformity with the generally accepted accounting principles, require estimates and assumptions to be made that affect the reported amount of assets and liabilities as of the date of the financial statements and the 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/materialize.

(c) REVENUE RECOGNITION

(i) Revenue from sale is recognised:

(a) 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

(b) No significant uncertainty exists regarding the amount of the consideration that will be derived from the sale of goods. (ii) The revenue in respect of export incentive is recognised on post export basis.

(iii) Revenue from interest is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable. (iv) Dividend from investment is recognized when the right to receive payment is established.

(d) EMPLOYEES BENEFITS

(i) Short Term Employees Benefits

Short Term Employees Benefits are recognized as an expense on an undiscounted basis in the statement of profit and loss of the year in which the related service is rendered

(ii) Post Employment Benefits

Defined Contribution Plan: Contribution to provident fund is made in accordance with the provisions of the Employee''s

Provident Fund and Miscellaneous Provisions Act, 1952 and is recognized as an expense in the statement of profit and loss.

Defined benefit Plans:

a) Gratuity:

Provision for gratuity liability to employees is made on the basis of actuarial valuation as at close of the year.

b) Leave Encashment

Provision for leave encashment is made on the basis of actuarial valuation as at the close of the year.

(iii) The actuarial gain/loss is recognized in the statement of profit and loss

(e) FIXED ASSETS

(i) Fixed assets are stated at historical cost less accumulated depreciation.

(ii) Cost of fixed assets comprises its purchase price and any attributable expenditure (direct and indirect) for bringing an assets to its working condition for its intended use. (iii) Expenditure incurred on renovation/modernisation on the existing fixed assets is added to the book value of these assets where such renovation/modernisation increases the future benefit from them beyond their previously assessed standard of performance. (f) INTANGIBLE ASSETS

Intangible assets are stated at cost less accumulated amount of amortisation. (g) DEPRECIATION

(i) Depreciation is provided on straight line method in accordance with and in the manner specified in Schedule XIV to the

Companies Act, 1956. (ii) Assets costing Rs. 5000/- or less acquired during the year are depreciated at 100%. (h) AMORTISATION

Intangible asset are amortised on straight line method. These assets are amortised over their estimated useful life. (i) CENVAT

Cenvat credit on excise duty/service tax paid on inputs, capital assets and input services is taken in accordance with the Cenvat Credit Rules, 2004. (j) INVENTORIES

Inventories are valued at cost or net realisable value, whichever is lower. The cost in respect of items of inventory is computed as under:

- In case of raw materials at FIFO basis plus direct expenses.

- In case of stores and spares at weighted average cost plus direct expenses.

- In case of work-in-process at raw material cost plus conversion cost depending upon the stage of completion.

- In case of finished goods at raw material cost plus conversion cost, packing cost, excise duty and other overheads incurred to bring the goods to their present condition and location.

(k) INVESTMENTS

Long term Investments are stated at cost less provision, if any, for decline in the value of such investments, which is other than temporary. Current investments are stated at lower of cost and fair value.

(l) FOREIGN CURRENCY TRANSACTIONS

(a) Transactions in foreign currency are recorded on initial recognition in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of transaction except in case of export invoices which are recorded at a rate notified by the custom department for invoice purpose which approximates the actual rate as at the date of transaction. Exchange difference arising on realization of export sale is recognized as income or expense in the period in which they arise.

(b) At each balance sheet date foreign currency monetary items are reported at closing rates. Exchange differences arising on settlement of monetary items or on reporting the same at closing rate as at balance sheet date are recognized as income or expense.

(c) The premium or discount arising at the inception of a forward contract which is not intended for trading or speculation purpose is amortised as expense or income over the life of the contract. Exchange difference on such forward contracts is recognized in the statement of profit or loss in the reporting period in which the exchange rates are charged. Any profit or loss arising on cancellation or renewal of a forward contract is recognised as income or as expense for the period.

(m)BORROWING COSTS

Borrowing costs that are directly attributable to acquisition or construction of a qualifying asset are capitalised as a part of cost of such asset. Qualifying asset is one that takes substantial period of time to get ready for its intended use. All other borrowing costs are recognised as expenditure in the period in which these are incurred.

(n) GOVERNMENT GRANTS AND SUBSIDIES

Government grants available to the company are recognized when there is a reasonable assurance of compliance with the conditions attached to such grants and when benefits in respect thereof have been earned and it is reasonably certain that the ultimate collection will be made. Government subsidy in the nature of promoter''s contribution is credited to capital reserve. Government subsidy related to specific fixed assets is deducted from the gross value of the assets concerned.

(o) 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.

(p) ACCOUNTING FOR TAXES ON INCOME

Provision for taxation for the year comprises of current tax and deferred tax. Current tax is amount of Income-tax determined to be payable in accordance with the provisions of Income tax Act 1961. Deferred tax is the tax effect of timing difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

(q) PROVISIONS AND CONTINGENT LIABILITIES (i) Provision is recognised when:

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

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

(c) the amount of the obligation can be reliably estimated (ii) Contingent liability is disclosed in case there is:

(a) Possible obligation that arises from past events and existence of which will be confirmed only by the occurrence or non- occurrence of one or more uncertain future events not wholly within the control of the enterprise ; or

(b) a present obligation arising from past events but is not recognised :

(i) when it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or (ii) a reliable estimate of the amount of the obligation cannot be made. (r) EARNING PER SHARE

Basic earning per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. For the purpose of calculating diluted earning per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares. (s) LEASE

The assets acquired on lease wherein a significant portion of risks and rewards of ownership of an asset is 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 terms of lease.


Mar 31, 2012

(a) BASIS OF PREPARATION OF FINANCIAL STATEMENTS

The accounts are prepared on accrual basis under the historical cost convention in accordance with the accounting standards referred to in sub-section(3C) of section 211 and other relevant provisions of the Companies Act, 1956.

(b)USE OF ESTIMATES

The preparation of financial statements, in conformity with the generally accepted accounting principles, require estimates and assumptions to be made that affect the reported amount of assets and liabilities as of the date of the financial statements and the 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 materialize

(c) REVENUE RECOGNITION

(I) Revenue from sale is recognised;

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

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

(ii) The revenue in respect of export incentives i.e. duty entitlement pass book scheme benefit is recognised on post export basis.

(iii) Revenue from interest is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

(iv) Dividend from investment is recognized when the right to receive payment is established.

(d)EMPLOYEES BENEFITS

(i) Short Term Employees Benefits

Short Term Employees Benefits are recognized as an expense on an undiscounted basis in the statement of profit and loss of the year in which the related service is rendered

(ii) Post Employment Benefits

Defined Contribution Plan: Contribution to provident fund is made in accordance with the provisions of the Employee's Provident Fund and Miscellaneous Provisions Act, 1952 and is recognized as an expense in the statement of profit and loss

Defined benefit Plans

a) Gratuity:

Provision for gratuity liability to employees is made on the basis of actuarial valuation as at close of the year.

b) Leave Encashment

Provision for leave encashment is made on the basis of actuarial valuation as at the close of the year.

(iii) The actuarial gain/loss is recognized in the statement of profit and loss

(e) FIXED ASSETS

(i) Fixed assets are stated at historical cost less accumulated depreciation.

(ii) Cost of fixed assets comprises its purchase price and any attributable expenditure (direct and indirect) for bringing an assets to its working condition for its intended use.

(iii) Expenditure incurred on renovation/modernisation on the existing fixed assets is added to the book value of these assets where such renovation/modernisation increases the future benefit from them beyond their previously assessed standard of performance.

(f) INTANGIBLE ASSETS

Intangible assets are stated at cost less accumulated amount of amortisation.

(g) DEPRECIATION

( i) Depreciation is provided on straight line method in accordance with and in the manner specified in Schedule XIV to the Companies Act, 1956.

(ii) Assets costing Rs. 5000/- or less acquired during the year are depreciated at 100%.

(h) AMORTISATION

Intangible asset are amortised on straight line method. These assets are amortised over their estimated useful life.

(i) CENVAT

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

(j) INVENTORIES

Inventories are valued at cost or net realisable value, whichever is lower. The cost in respect of items of inventory is computed as under:

- In case of raw materials at FIFO basis plus direct expenses.

- In case of stores and spares at weighted average cost plus direct expenses.

- In case of work-in-process at raw material cost plus conversion cost depending upon the stage of completion.

- In case of finished goods at raw material cost plus conversion cost, packing cost, excise duty and other overheads incurred to bring the goods to their present condition and location.

(k) INVESTMENTS

Long term Investments are stated at cost less provision, if any, for decline in the value of such investments, which is other than temporary. Current investments are stated at lower of cost and fair value.

(l) FOREIGN CURRENCY TRANSACTIONS

(a) Transactions in foreign currency are recorded on initial recognition in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and foreign currency at the date of transaction except in case of export invoices which are recorded at a rate notified by the custom department for invoice purpose which approximates the actual rate as at the date of transaction. Exchange difference arising on realization of export sale is recognized as income or expense in the period in which they arise.

(b) At each balance sheet date foreign currency monetary items are reported at closing rates. Exchange differences arising on settlement of monetary items or on reporting the same at closing rate as at balance sheet date are recognized as income or expense.

(m)BORROWING COSTS

Borrowing costs that are directly attributable to acquisition or construction of a qualifying asset are capitalised as a part of cost of such asset. Qualifying asset is one that takes substantial period of time to get ready for its intended use. All other borrowing costs are recognised as expenditure in the period in which these are incurred.

(n) GOVERNMENT GRANTS AND SUBSIDIES

Government grants available to the company are recognized when there is a reasonable assurance of compliance with the conditions attached to such grants and when benefits in respect there of have been earned and it is reasonably certain that the ultimate collection will be made. Government subsidy in the nature of promoter's contribution is credited to capital reserve. Government subsidy related to specific fixed assets is deducted from the gross value of the assets concerned.

(o) 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.

(p) ACCOUNTING FOR TAXES ON INCOME

Provision for taxation for the year comprises of current tax and deferred tax. Current tax is amount of Income-tax determined to be payable in accordance with the provisions of Income tax Act 1961. Deferred tax is the tax effect of timing difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

(q) PROVISIONS AND CONTINGENT LIABILITIES

(i) Provision is recognised (for liabilities that can be measured by using a substantial degree of estimation) when:

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

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

(c) the amount of the obligation can be reliably estimated

(ii) Contingent liability is disclosed in case there is:

a) Possible obligation that arises from past events and existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the enterprise ; or

b) a present obligation arising from past events but is not recognised

(i) when it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or (ii) a reliable estimate of the amount of the obligation cannot be made.

(r) EARNING PER SHARE:

Basic earning per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.

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

(s) LEASE

The assets acquired on lease wherein a significant portion of risks and rewards of ownership of an asset is 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 terms of lease.


Mar 31, 2011

(a) Basis of Preparation of Financial Statements

The accounts are prepared on accrual basis under the historical cost convention in accordance with the accounting standards referred to in sub-section(3C) of section 211 and other relevant provisions of the Companies Act, 1956.

(b) Use of Estimates

The preparation of financial statements, in conformity with the generally accepted accounting principles, require estimates and assumptions to be made that affect the reported amount of assets and liabilities as of the date of the financial statements and the 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 materialize.

(c) Revenue Recognition

(i) Sales comprise sale of goods and export incentives. Revenue from sale of goods is recognised;

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

(b) No significant uncertainty exists regarding the amount of the consideration that will be derived from the sale of goods. (ii) The revenue in respect of export incentives i.e. duty entitlement pass book scheme benefit is recognised on post export basis.

(iii) Revenue from interest is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

(iv) Dividend from investment is recognized when the right to receive payment is established.

(d) Employees Benefits

(i) Short Term Employees Benefits

Short Term Employees Benefits are recognized as an expense on an undiscounted basis in the profit and loss account of the year in which the related service is rendered.

(ii) Post Employment Benefits

Defined Contribution Plan: Contribution to provident fund is made in accordance with the provisions of the Employee's Provident Fund and Miscellaneous Provisions Act, 1952 and is recognized as an expense in the profit and loss account.

Defined Benefit Plans

a) Gratuity:

Provision for gratuity liability to employees is made on the basis of actuarial valuationas at close of the year.

b) Leave Encashment

Provision for leave encashment is made on the basis of actuarial valuation as at the close of the year. (iii)The actuarial gain/loss is recognized in the statement of profit and loss account.

(e) FIXED ASSETS

(i) Fixed assets are stated at historical cost less accumulated depreciation.

(ii) Cost of fixed assets comprises its purchase price and any attributable expenditure (direct and indirect) for bringing an assets to its working condition for its intended use.

(iii) Expenditure incurred on renovation/modernisation on the existing fixed assets is added to the book value of these assets where such renovation/modernisation increases the future benefit from them beyond their previously assessed standard of performance.

(f) INTANGIBLE ASSETS

Intangible assets are stated at cost less accumulated amount of amortisation.

(g) DEPRECIATION

(i) Depreciation is provided on straight line method in accordance with and in the manner specified in Schedule XIV to the Companies Act, 1956.

(ii) Assets costing Rs. 5000/- or less acquired during the year are depreciated at 100%.

(h) AMORTISATION

Intangible asset are amortised on straight line method. These assets are amortised over their estimated useful life.

(i) CENVAT

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

(j) INVENTORIES

Inventories are valued at cost or net realisable value, whichever is lower. The cost in respect of items of inventory is computed as under:

- Incase of raw materials at FIFO basis plus direct expenses.

- In case of stores and spares at weighted average cost plus direct expenses.

- In case of work-in-process at raw material cost plus conversion cost depending upon the stage of completion.

- In case of finished goods at raw material cost plus conversion cost, packing cost, excise duty and other overheads incurred to bring the goods to their present condition and location.

(k) INVESTMENTS

Long term Investments are stated at cost less provision, if any, for decline in the value of such investments, which is other than temporary. Current investments are stated at lower of cost and fair value.

(l) FOREIGN CURRENCY TRANSACTIONS

(a) Transactions in foreign currency are recorded on initial recognition in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and foreign currency at the date of transaction except in case of export invoices which are recorded at a rate notified by the custom department for invoice purpose which approximates the actual rate as at the date of transaction. Exchange difference arising on realization of export sale is recognized as income or expense in the period in which they arise.

(b)At each balance sheet date foreign currency monetary items are reported at closing rates. Exchange differences arising on settlement of monetary items or on reporting the same at closing rate as at balance sheet date are recognized as income or expense.

(m) BORROWING COSTS

Borrowing costs that are directly attributable to acquisition or construction of a qualifying asset are capitalised as a part of cost of such asset. Qualifying asset is one that takes substantial period of time to get ready for its intended use. All other borrowing costs are recognised as expenditure in the period in which these are incurred.

(n) SUBSIDY

Government grants available to the company are recognized when there is a reasonable assurance of compliance with the conditions attached to such grants and when benefits in respect thereof have been earned and it is reasonably certain that the ultimate collection will be made. Government subsidy in the nature of promoter's contribution is credited to capital reserve. Government subsidy related to specific fixed assets is deducted from the gross value of the assets concerned.

(o) 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.

(p) ACCOUNTING FOR TAXES ON INCOME

Provision for taxation for the year comprises of current tax and deferred tax. Current tax is amount of Income-tax determined to be payable in accordance with the provisions of Income tax Act 1961. Deferred tax is the tax effect of timing difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

(q) PROVISIONS AND CONTINGENT LIABILITIES

(i) Provision is recognised (for liabilities that can be measured by using a substantial degree of estimation) when:

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

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

(c) the amount of the obligation can be reliably estimated

(ii) Contingent liability is disclosed in case there is:

a) Possible obligation that arises from past events and existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the enterprise ; or

b) a present obligation arising from past events but is not recognised

(i) when it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or (ii) a reliable estimate of the amount of the obligation cannot be made.

(r) EARNING PER SHARE:

Basic earning per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.

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

(s) LEASE

The assets acquired on lease wherein a significant portion of risks and rewards of ownership of an asset is 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 terms of lease.


Mar 31, 2010

(a) Accounting Conventions

The accounts are prepared on accrual basis under the historical cost convention in accordance with the accounting standards referred to in sub-section(3C) of section211 andother relevant provisions of the CompaniesAct, 1956

(b) Revenue Recognition

(i) Revenue from sale of goods is recognised;

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

(b) No significant uncertainty exists regarding the amount of the consideration that will be derived from the sale of goods. (ii)The revenue in respect of Export incentives i.e. Duty Entitlement Pass Book Scheme benefit is recognised on post export basis.

(c) Use of Estimates

The preparation of financial statements, in conformity with the generally accepted accounting principles, require estimates and assumptions to be made that effect the reported amount of assets and liabilities as of the date of the financial statements and the reported amount of revenues and expenses during the reporting-period. Difference between the actual results and estimates are recognised in the period in which the results materialise.

(d) Employees Benefits

(i) Short Term Employees Benefits

Short Term Employees Benefits are recognized as an expense on an undiscounted basis in the Profit and Loss Account of the year in which the related service is rendered.

ii) Post Employment Benefits Defined Contribution Plan:

Contribution to provident fundis made in accordance with the provisions of the Employees Provident Fund and Miscellaneous Provisions Act, 1952 and is recognized as an expense in the profitand loss account.

Defined Benefit Plans

a) Gratuity:

Provision for gratuity liability to employees is made on the basis of actuarial valuation as at close of the year.

b) Leave Encashment

Provision for leave encashment is made on the basis of actuarial valuation as at the close of the year iii) The actuarial gain/loss is recognized in the statement of profit and loss account.

(e) FIXEDASSETS

i) Fixed assets are stated at historical cost less accumulated depreciation.

ii) Expenditure incurred on renovation/modernisation on the existing fixed assets is added to the book value of these assets where such renovation/modernisation increases the future benefit from them beyond their previously assessed standard of performance.

(f) INTANGIBLEASSETS

Intangible assets are stated at cost less accumulated amount of amortisation.

(g) DEPRECIATION

i) Depreciation is provided on straight line method in accordance with and in the manner specified in Schedule XIV to the CompaniesAct, 1956. ii) Assets costing Rs. 5000/- or less acquired during the year are depreciated at 100%. (h) AMORTISATION

Intangible asset are amortised on straight line method. These assets are amortised over their estimated useful life. (I) C EN VAT .-Cenvat credit on excise duty paid inputs, capital assets and input services is taken in accordance with the Cenvat Credit Rules. 2004. "(j) INVENTORIES

Inventories a re valued at cost or net rea lisa ble va lue, whichever is lower. The cost in respect of items of inventory is co mputed asunder:

In case of raw materials at FIFO basis plus direct expenses. In case of stores and spares at weighted average cost plus direct expenses.

In case of work-in-process at raw material cost plus conversion cost depending upon the stage of completion. In case of finished goods at raw material cost plus conversion cost, packing cost, excise duty and other overheads incurred to bring the goods to their present condition and location.

(k) INVESTMENTS

Long term Investments are stated at cost less provision, if any, for decline in the value of such investments, which is other than temporary. Current investments are stated at lower of cost and fair value.

(I) FOREIGN CURRENCYTRANSACTIONS

(a) Transactions in foreign currency are recorded on initial recognition in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and foreign currency at the rate of transaction except in case of export invoices which are recorded at a rate notified by the custom department for invoice purpose which approximates the actual rate as at the date of transaction. Exchange difference arising on realization of export sale is recognized as income or expense in the period in which they arise.

(b) At each balance sheet data foreign currency monetary items are reported at closing rates Exchange differences arising on restatement of monetary items at closing rates are recognized as income or expense.

(m) BORROWING COSTS

Borrowing costs that are directly attributable to acquisition or construction of a qualifying asset a re capitalised as a part of cost of such asset. Qualifying asset is one that takes substantial period of time to get ready for its intended use. All other borrowing costs are recognised as expenditure in the period in which these are incurred.

(n) SUBSIDY

Government grants available to the company are recognized when there is a reasonable assurance of compliance with the conditions attached to such grants and when benefits in respect thereof have been earned and it is reasonably certain that the ultimate collection will be made. Government subsidy in the nature of promoters contribution is credited to capital reserve Government subsidy related to specific fixed assets is deducted fromthe gross value of the assets concerned.

(O) EXPENDITURE DURING CONSTRUCTION PERIOD

Other indirect expenditure incurred during construction period in respect of major expansions / new units are capitalised on various categories of fixed assets on proportionate basis.

(p) IMPAIRMENTOFASSETS

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.

(q) ACCOUNTING FOR TAXES ON INCOME

Provision for taxation for the year comprises of current tax and deferred tax. Current tax is amount of Income-tax determined to be payable in accordance with the provisions of Income tax Act 1961. Deferred tax is the tax effect of timing difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

(r) PROVISIONS AND CONTINGENT LIABILITIES

(i) Provision is recognised (for liabilities that can be measured by using a substantial degree of estimation) when: (a) the company has a presentobligationasa result of a past event;

(b)a probable outflow of resources embodying economic benefits is expected to settle the obligation ; and (c) the a mount of the obligation can be reliably estimated (ii) Contingent liability is disclosed in case there is:

a) Possible obligation that arises from past events and existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the enterprise ,

b) a present obligation arising from past events but is not recognised

(i) when it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or (ii) a reliable estimate of the amount of the obligation cannot be made.

(s) EARNING PER SHARE:

Basic earning per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.

For the purpose of calculating diluted earning per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period is adjusted for the affects of all dilutive potential equity shares.

(t) LEASE

The assets acquired on lease where in a significant portion of risks and rewards of ownership of an asset is 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 terms of lease.



 
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