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Accounting Policies of Simmonds Marshall Ltd. Company

Mar 31, 2015

1.1 Basis of Accounting and Preparation of Financial Statements

The financial statements are prepared under historial cost convention on the accrual basis of accounting in accordance with the generally accepted accounting principles, the applicable mandatory Accounting Standards and the relevant provisions of the Companies Act, 2013.

1.2 Use of estimates

The preparation of the 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 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 are known/materialised.

1.3 Fixed Assets

Fixed Assets are stated at cost net of recoverable taxes, less accumulated depreciation and impairment loss, if any. All cost, including financing costs till commencement of commercial production, net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the fixed assets are capitalised.

1.4 Investments

Recognition and Measurement:

Investments, which are readily realisable and intended to be held for not more than one year from balance sheet date, are classified as current investments. All other investments are classified as non-current investments.

Non Current investments which are intended to be held for more than a year, from the date of acquisition, are considered as long-term investments and are carried at cost. However, provision for diminution in value of investments is made to recognise a decline, other than temporary, in the value of the investments. Investments other than long-term investments being current investments are valued at cost or fair value whichever is lower, determined on an individual basis.

1.5 Inventories

Inventories are valued at lower of cost or net realisable value.

i) Cost of raw materials, stores & spare parts, packing materials and loose tools is arrived at on the basis of weighted average cost.

ii) Work in process and finished goods include conversion costs in addition to landed cost of raw materials.

iii) Scrap is valued at net realisable value.

1.6 Revenue Recognition

i) Sale is recognised on despatch of goods. Export sales are accounted for on basis of the dates of bill of lading. Sales are net of trade discounts, sales tax, sales returns and remissions. Excise Duty recovered is presented as reduction from gross turnover.

ii) Revenue from services is recognised when services are rendered.

iii) Dividend is accounted when right to receive is established.

iv) Interest income is recognised on time proportion basis taking into account the amount outstanding and rate applicable.

v) Export benefits under duty exemption scheme is being accounted in the year of exports.

1.7 Sale of Turnings, Borings and Pallets

Sale of turnings, borings and pallets coming out of the production line as scrap, shown as other operating revenue.

1.8 Depreciation

(i) Tangible Assets

Depreciation on assets is provided on Straight Line Method, pro-rata to the period of use, based on the useful life of the assets as prescribed under the Schedule II of the Companies Act, 2013.

(ii) Intangible Assets

(a) Cost relating to Goodwill an intangible asset, which is acquired is capitalised and amortised on a straight line basis over useful life of 10 years.

(b) Costs relating to the acquisition of software and licenses are capitalized and subsequently amortized over the estimated useful life of 3 years.

(c) Expenditure incurred on acquiring manufacturing rights and trade mark is amortised on straight line method over the period of agreement i.e. 3 years.

1.9 Foreign Currency Transactions

Foregin Currency transactions are recorded at the exchange rate prevailing on the date of the transactions. Monetary items (i.e. receivables, payables, loans etc) denominated in foreign currency and outstanding at the Balance Sheet date are translated at the exchange rate prevailing on the date of balance sheet. Exchange difference arising on settlement and conversion of foregin currency transactions are recgonised as income or expense in the period in which they arise, except to the extent it results to long term monetary items.

During the year, consequent to the notification No.F.NO.17/133/2008 - CL V dated March 29, 2011 revising Accounting Standard (AS) 11 'The Effects of Change in Foregin Exchange Rates', the company has exercised the option in terms of paragraph 46A. Accordingly the exchange differences arising on settlement / translation of long term monetary items utilised for acquisition of fixed assets are adjusted to the carrying cost of fixed assets and depreciated over its remaining useful life.

Non-monetary items denominated in foregin currency are carried at the exchange rate in force at the date of the transaction.

1.10 Employee benefits

i) Defined Contribution Plan:

Employee benefits in the form of contribution to Superannuation Fund, Provident Fund, Employees State Insurance Corporation and Labour Welfare Fund are considered as defined contribution plan and the same is charged to the statement of profit and loss for the year when the contributions to the respective funds are due.

ii) Defined Benefit Plan:

Gratuity

The company has an obligation towards gratuity, a defined benefit plan covering eligible employees. The company has created an Employees' Group Gratuity Fund which has taken a Group Gratuity Assurance Scheme with the Life Insurance Corporation of India. Company's contribution are based on actuarial valuation, using the projected unit credit method, as at the date of the balance sheet. Actuarial gains / losses, if any, are recognised in the statement of profit and loss.

iii) Other Long Term Benefits:

Compensated Absences

The company provides for the encashmnet of leave or leave with pay subject to certain rules. The employees are entitled to accumulate leave subject to certain limits, for future encashment / entitlement. Compensated absences are provided for on the basis of an actuarial valuation, using the projected unit credit method, as at the date of the balance sheet. Actuarial gains / losses, if any, are immediately recognised in the statement of profit and loss.

1.11 Borrowing costs

Borrowing costs directly attributable to acquisition or construction of those fixed assets which necessarily take substantial period of time to get ready for the intended use are capitalised. Other borrowing costs are charged to the profit and loss account.

1.12 Earnings Per Share

Basic earnings per share are 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 earnings 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 are adjusted for the effects of all dilutive potential equity shares.

1.13 Taxation

Tax Expenses comprises of current tax and deferred tax.

Current Tax is provided on taxable income using applicable tax rates and tax laws.

The deferred tax for timing difference between the book and tax profits/losses for the year is accounted for using the tax rates and laws that have been enacted or substantially enacted as of Balance Sheet date.

Deferred tax assets arising on account of unabsorbed depreciation and brought forward losses are recognised to the extent there is virtual certainty that the assets can be realised in future.

AdvanceTaxes and provision for current income taxes are presented in the balance sheet after off-setting advance tax paid and income tax provision arising in the same governing taxation laws.

1.14 Impairment of Assets

The Company assesses at each balance sheet date for possible impairment in carrying value of assets based on external and internal sources of information and indications. In case of recoverable amount of assets / cash generating unit is less than carrying amount, impairment loss is recognised in the Profit & Loss Account for difference in carrying value of assets / cash generating units and recoverable amount.

1.15 Provision and contingent liabilities

i) Provision in respect of present obligation arising out of past events is made in accounts when reliable estimates can be made of the amount of obligation and it is probable that an outflow of resources will be required to settle the obligation.

ii) Contingent liabilities are disclosed by way of note to the financial statements after careful valuation by the management of the facts and legal aspects of matter involved. Contingent Assets are not recognised in the financial statements.




Mar 31, 2014

1.1 Basis of Accounting and Preparation of Financial Statements

The financial statements are prepared under historial cost convention on the accrual basis of accounting in accordance with the generally accepted accounting principles, the applicable mandatory Accounting Standards and the relevant provisions of the Companies Act, 1956.

1.2 Use of estimates

The preparation of the 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 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 are known/materialised.

1.3 Fixed Assets

Fixed Assets are stated at cost net of recoverable taxes, less accumulated depreciation and impairment loss, if any. All cost, including financing costs till commencement of commercial production, net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the fixed assets are capitalised.

1.4 Investments

Long term investments are carried at cost less other than temporary dimunition in value, if any. Current investments are carried at lower of cost or fair market value.

1.5 Inventories

Inventories are valued at lower of cost or net realisable value.

i) Cost of raw materials, stores & spare parts, packing materials and loose tools is arrived at on the basis of weighted average cost.

ii) Work in process and finished goods include conversion costs in addition to landed cost of raw materials.

iii) Scrap is valued at net realisable value.

1.6 Revenue Recognition

i) Sale is recognised on despatch of goods. Export sales are accounted for on basis of the dates of bill of lading. Sales are net of trade discounts, sales tax, sales returns and remissions. Excise Duty recovered is presented as reduction from gross turnover.

ii) Revenue from services is recognised when services are rendered.

iii) Dividend is accounted when right to receive is established.

iv) Interest income is recognised on time proportion basis taking into account the amount outstanding and rate applicable.

v) Export benefits under duty exemption scheme is being accounted in the year of exports.

1.7 Sale of Turnings, Borings and Pallets

Sale of turnings, borings and pallets coming out of the production line as scrap, is reduced while working out cost of raw materials.

1.8 Depreciation

Depreciation on assets is provided on Straight Line Method, pro-rata to the period of use, at rates and in the manner specified under the Schedule XIV of the Companies Act, 1956 over their useful life.

Individual Assets costing less than 5,000 are depreciated in full in the year of purchase.

Cost relating to Goodwill an intangible asset which is acquired is capitalised and amortised on a straightline basis over useful life of 10 years.

1.9 Foreign Currency Transactions

Foreign Currency transactions are recorded at the exchange rate prevailing on the date of the transactions. Monetary items (i.e. receivables, payables, loans etc) denominated in foreign currency and outstanding at the Balance Sheet date are translated at the exchange rate prevailing on the date of balance sheet. Exchange difference arising on settlement and conversion of foreign currency transactions are recognised as income or expenses in the period in which they arise, except to the extent it results to long term monetary items.

During the year, consequent to the notification No.F.NO.17/133/2008 - CL V dated March 29, 2011 revising Accounting Standard (AS) 11"The Effects of Change in Foreign Exchange Rates", the company has exercised the option in terms of paragraph 46A. Accordingly the exchange differences arising on settlement / translation of long term monetary items utilised for acquisition of fixed assets are adjusted to the carrying cost of fixed assets and depreciated over its remaining useful life.

Non-monetary items denominated in foreign currency are carried at the exchange rate in force at the date of the transaction.

In respect of forward contracts entered into to hedge foreign currency risks of existing assets and liabilities, the difference between the forward rate and exchange rate at the inception of the contract is recognised as income or expense over the life of the contract. Further, the exchange difference arising on such contracts are recognised as income or expenses along with the exchange differences on the underlying assets / liabilities. Profit or loss on cancellations / renewals of forward contract is recognised during the year.

1.10 Employee benefits

i) Short term employee benefits are recognised as an expense at the undiscounted amount in the Profit & Loss Account of the year in which the related service is rendered.

ii) Contribution payable to recognised provident fund and superannuation scheme which is defined contribution scheme is charged to Profit & Loss Account.

iii) Retirement benefit in form of gratuity, administered by Life Insurance Corporation of India, is a defined benefit obligation and is provided for on the basis of actuarial valuation as at Balance Sheet date. The actuarial gains and losses determined are recognised in the profit & loss account.

1.11 Borrowing costs

Borrowing costs directly attributable to acquisition or construction of those fixed assets which necessarily take substantial period of time to get ready for the intended use are capitalised. Other borrowing costs are charged to the profit and loss account.

1.12 Taxation

Tax Expenses comprises of current tax and deferred tax.

Current Tax is provided on taxable income using applicable tax rates and tax laws.

The deferred tax for timing difference between the book and tax profits/losses for the year is accounted for using the tax rates and laws that have been enacted or substantially enacted as of Balance Sheet date.

Deferred tax assets arising on account of unabsorbed depreciation and brought forward losses are recognised to the extent there is virtual certainty that the assets can be realised in future.

Advance Taxes and provision for current income taxes are presented in the balance sheet after off-setting advance tax paid and income tax provision arising in the same governing taxation laws.

1.13 Impairment of Assets

The Company assesses at each balance sheet date for possible impairment in carrying value of assets based on external and internal sources of information and indications. In case of recoverable amount of assets / cash generating unit is less than carrying amount, impairment loss is recognised in the Profit & Loss Account for difference in carrying value of assets / cash generating units and recoverable amount.

1.14 Provision and contingent liabilities

i) Provision in respect of present obligation arising out of past events is made in accounts when reliable estimates can be made of the amount of obligation and it is probable that an outflow of resources will be required to settle the obligation.

ii) Contingent liabilities are disclosed by way of note to the financial statements after careful valuation by the management of the facts and legal aspects of matter involved. Contingent Assets are not recognised in the financial statements.

2.2: Terms / Rights attached to shares:

The Company has only one class of equity shares having a par value of 2 per share. Each holder of equity share 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 except in case of interim dividend. In the event of liquidation of the company, the holders of equity shares will be entitled to receive 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.

4.1: Additional information to secured / unsecured loans

The long term portion of term loans are shown under long term borrowings and current maturities (payable within twelve months) of long term borrowings are shown under the current liabilities as per disclosure requirement of the Revised Schedule VI.

Other Terms

Each amount disbursed under ECB shall be repaid in 20 quarterly installments starting from August 2013, after the moratorium period of 18 months from the date of first disbursment i.e. November 2011.

7.1: Details of Security: For Rupee Loan

(i) Working capital loans are secured against hypothecation of raw materials, finished goods, stores & spares, book debts etc. and entire block of assets (both present & future ) in favour of consortium of banks on pari passu other than specific assets financed by respective banks.

(ii) All loans are secured against the personal guarantee of Chairman.

7.2: Details of Security: For Foreign Currency Loan

(i) Working capital loans are secured against hypothecation of raw materials, finished goods, stores & spares, book debts etc. and entire block of assets (both present & future) in favour of consortium of banks on pari passu other than specific assets financed by respective banks.

(ii) All loans are secured against the personal guarantee of Chairman.

Based on the information available with the company regarding total amount due to suppliers as at March 31, 2014 covered under Small and Medium Enterprises Act, 2006, amount to 166.58 (2012 - 13 114.65 Lakhs). The company is generally regular in making payment of dues to such enterprise. There are no overdues beyond the credit period extended to the company which is less than 45 days hence liability for payment of interest or premium thereof and related disclosure under the said Act does not arise.

(ii) Defined Benefit plan

A. The Company has defined benefit gratuity plan. Every employee who has completed five years or more of service is entitled to gratuity on term not less favourable than the provisions of The Payment of Gratuity Act, 1972. The scheme is funded with Life Insurance Corporation of India.


Mar 31, 2013

1.1 Basis of Accounting and Preparation of Financial Statements

The financial statements are prepared under historial cost convention on the accrual basis of accounting in accordance with the generally accepted accounting principles, the applicable mandatory Accounting Standards and the relevant provisions of the Companies Act, 1956.

1.2 Use of estimates

The preparation of the 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 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 are known/materialised.

1.3 Fixed Assets

Fixed Assets are stated at cost net of recoverable taxes, less accumulated depreciation and impairment loss, if any. All cost, including financing costs till commencement of commercial production, net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the fixed assets are capitalised.

1.4 Investments

Long term investments are carried at cost less other than temporary dimunition in value, if any. Current investments are carried at lower of cost or fair market value.

1.5 Inventories

Inventories are valued at lower of cost or net realisable value.

i) Cost of raw materials, stores & spare parts, packing materials and loose tools is arrived at on the basis of weighted average cost.

ii) Work in process and finished goods include conversion costs in addition to landed cost of raw materials.

iii) Scrap is valued at net realisable value.

1.6 Reven ue Recogn ition

i) Sales of goods is recognised on transfer of significant risk and reward of ownership. Export sales areaccounted for on basis of the dates of bill of lading. Sales are net of trade discounts, sales tax, sales returns and remissions. Excise Duty recovered is presented as reduction from gross turnover.

ii) Revenue from services is recognised when services are rendered

iii) Dividend is accounted when right to receive is established.

iv) Interest income is recognised on time proportion basis taking into account the amount outstanding and rate applicable.

v) Export benefits under duty exemption scheme is being accounted in the year of exports."

1.7 Sale of Turnings, Borings and Pallets

Sale of turnings, borings and pallets coming out of the production line as scrap, is reduced while working out cost of raw materials.

1.8 Depreciation

Depreciation on assets is provided on Straight Line Method, pro-rata to the period of use, at rates and in the manner specified under the Schedule XIV of the Companies Act, 1956 over their useful life.

Individual Assets costing less than Rs. 5,000 are depreciated in full in the year of purchase.

Cost relating to Goodwill an intangible asset which is acquired is capitalised and amortised on a straightline basis over useful life of 10 years.

1.9 Foreign Currency Transactions

Foreign Currency transactions are recorded at the exchange rate prevailing on the date of the transactions. Monetary items (i.e. receivables, payables, loans etc.) denominated in foreign currency and outstanding at the Balance Sheet date are translated at the exchange rate prevailing on the date of balance sheet. Exchange difference arising on settlement and conversion of Foreign currency transactions are recgonised as income or expenses in the period in which they arise, except to the extent it results to long term monetary items. During the year, consequent to the notification No.F.NO.17/133/2008 - CLV dated December 29, 2011 revising Accounting Standard (AS) 11 "The Effects of Change in Foreign Exchange Rates", the company has exercised the option in terms of paragraph 46A. Accordingly, the exchange differences arising on settlement / translation of long term monetary items utilised for acquisition of fixed assets are adjusted to the carrying cost of fixed assets and depreciated over its remaining useful life.

Non-monetary items denominated in Foreign currency are carried at the exchange rate in force at the date of the transaction.

In respect of forward contracts entered into to hedge foreign currency risks of existing assets and liabilities, the difference between the forward rate and exchange rate at the inception of the contract is recognised as income or expense over the life of the contract. Further, the exchange difference arising on such contracts are recognised as income or expense along with the exchange differences on the underlying assets / liabilities. Profit or loss on cancellations / renewals of forward contract is recognised during the year.

1.10 Employee benefits

i) Short term employee benefits are recognised as an expense at the undiscounted amount in the Profit & Loss Account of the year in which the related service is rendered.

ii) Contribution payable to recognised provident fund and superannuation scheme which is defined contribution scheme is charged to Profit & Loss Account.

iii) Retirement benefit in form of gratuity, administered by Life Insurance Corporation of India, is a defined benefit obligation and is provided for on the basis of actuarial valuation as at Balance Sheet date. The actuarial gains and losses determined are recognised in the Profit & Loss Account.

1.11 Borrowing costs

Borrowing costs directly attributable to acquisition or construction of those fixed assets which necessarily take substantial period of time to get ready for the intended use are capitalised. Other borrowing costs are charged to the Profit & Loss Account.

1.12 Taxation

Tax Expenses comprises of current tax and deferred tax.

Current Tax is provided on taxable income using applicable tax rates and tax laws.

The deferred tax for timing difference between the book and tax profits/losses for the year is accounted for using the tax rates and laws that have been enacted or substantially enacted as of Balance Sheet date.

Deferred tax assets arising on account of unabsorbed depreciation and brought forward losses are recognised to the extent there is virtual certainty that the assets can be realised in future.

Advance Taxes and provision for current income taxes are presented in the balance sheet after off-setting advance tax paid and income tax provision arising in the same governing taxation laws.

1.13 Impairment of Assets

The Company assesses at each balance sheet date for possible impairment in carrying value of assets based on external and internal sources of information and indications. In case of recoverable amount of assets / cash generating unit is less than carrying amount, impairment loss is recognised in the Profit & Loss Account for difference in carrying value of assets / cash generating units and recoverable amount.

1.14 Provision and contingent liabilities

i) Provision in respect of present obligation arising out of past events is made in accounts when reliable estimates can be made of the amount of obligation and it is probable that an outflow of resources will be required to settle the obligation.

ii) Contingent liabilities are disclosed by way of note to the financial statements after careful valuation by the management of the facts and legal aspects of matter involved. Contingent Assets are not recognised in the financial statements.


Mar 31, 2012

1.1 Basis of Accounting and Preparation of Financial Statements

The financial statements are prepared under historial cost convention on the accrual basis of accounting in accordance with the generally accepted accounting principles, the applicable mandatory Accounting Standards and the relevant provisions of the Companies Act, 1956.

1.2 Use of estimates

The preparation of the 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 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 are known/materialised.

1.3 Fixed Assets

Fixed Assets are stated at cost net of recoverable taxes, less accumulated depreciation and impairment loss, if any. All cost, including financing costs till commencement of commercial production, net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the fixed assets are capitalised.

1.4 Investments

Long term investments are carried at cost less other than temporary dimunition in value, if any. Current investments are carried at lower of cost or fair market value.

1.5 Inventories

Inventories are valued at lower of cost or net realisable value.

i) Cost of raw materials, stores & spare parts, packing materials and loose tools is arrived at on the basis of weighted average cost.

ii) Work in process and finished goods include conversion costs in addition to landed cost of raw materials.

iii) Scrap is valued at net realisable value.

1.6 Revenue Recognition

i) Sales of goods is recognised on transfer of significant risk and reward of ownership. Export sales are accounted for on basis of the dates of bill of lading. Sales are net of trade discounts, sales tax, sales returns and remissions. Excise Duty recovered is presented as reduction from gross turnover.

ii) Revenue from services is recognised when services are rendered.

iii) Dividend is accounted when right to receive is established.

iv) Interest income is recognised on time proportion basis taking into account the amount outstanding and rate applicable.

v) Export benefits under duty exemption scheme is being accounted in the year of exports.

1.7 Sale of Turnings, Borings and Pallets

Sale of turnings, borings and pallets coming out of the production line as scrap, is reduced while working out cost of raw materials.

1.8 Depreciation

Depreciation on assets is provided on Straight Line Method, pro-rata to the period of use, at rates and in the manner specified under the Schedule XIV of the Companies Act, 1956 over their useful life.

1.9 Foreign Currency Transactions

Foregin Currency transactions are recorded at the exchange rate prevailing on the date of the transactions. Monetary items (i.e. receivables, payables, loans etc) denominated in foreign currency and outstanding at the Balance Sheet date are translated at the exchange rate prevailing on the date of balance sheet. Exchange difference arising on settlement and conversion of foregin currency transactions are recgonised as income or expense in the period in which they arise, except to the extent it results to long term monetary items.

During the year, consequent to the notification No.F.NO.17/133/2008 - CL V dated December 29, 2011 revising Accounting Standard (AS) 11'"'The Effects of Change in Foregin Exchange Rates"", the company has exercised the option in terms of paragraph 46A. Accordingly the exchange differences arising on settlement / translation of long term monetary items utilised for acquisition of fixed assets are adjusted to the carrying cost of fixed assets and depreciated over its remaining useful life.

Non-monetary items denominated in foregin currency are carried at the exchange rate in force at the date of the transaction.

In respect of forward contracts entered into to hedge foreign currency risks of existing assets and liabilities, the difference between the forward rate and exchange rate at the inception of the contract is recognised as income or expense over the life of the contract. Further, the exchange difference arising on such contracts are recognised as income or expenses along with the exchange differences on the underlying assets / liabilities. Profit or loss on cancellations / renewals of forward contract is recognised during the year.

1.10 Employee benefits

i) Short term employee benefits are recognised as an expense at the undiscounted amount in the Profit & Loss Account of the year in which the related service is rendered.

ii) Contribution payable to recognised provident fund and superannuation scheme which is defined contribution scheme is charged to Profit & Loss Account.

iii) Retirement benefit in form of gratuity, administered by Life Insurance Corporation of India, is a defined benefit obligation and is provided for on the basis of actuarial valuation as at Balance Sheet date.The actuarial gains and losses determined are recognised in the profit & loss account.

1.11 Borrowing costs

Borrowing costs directly attributable to acquisition or construction of those fixed assets which necessarily take substantial period of time to get ready for the intended use are capitalised. Other borrowing costs are charged to the profit and loss account.

1.12 Taxation

Tax Expenses comprises of current tax and deferred tax.

Current Tax is provided on taxable income using applicable tax rates and tax laws.

The deferred tax for timing difference between the book and tax profits/losses for the year is accounted for using the tax rates and laws that have been enacted or substantially enacted as of Balance Sheet date.

Deferred tax assets arising from the timing differences are recognised to the extent there is virtual certainty that the assets can be realised in future.

Advance Taxes and provision for current income taxes are presented in the balance sheet after off-setting advance tax paid and income tax provision arising in the same governing taxation laws.

1.13 Impairment of Assets

The Company assesses at each balance sheet date for possible impairment in carrying value of assets based on external and internal sources of information and indications. In case of recoverable amount of assets / cash generating unit is less than carrying amount, impairment loss is recognised in the Profit & Loss Account for difference in carrying value of assets / cash generating units and recoverable amount.

1.14Provision and contingent liabilities

i) Provision in respect of present obligation arising out of past events is made in accounts when reliable estimates can be made of the amount of obligation and it is probable that an outflow of resources will be required to settle the obligation.

ii) Contingent liabilities are disclosed by way of note to the financial statements after careful valuation by the management of the facts and legal aspects of matter involved. Contingent Assets are not recognised in the financial statements.


Mar 31, 2011

(a) Basis of Accounting:

The financial statements are prepared under historical cost convention on the accrual basis of accounting in accordance with the generally accepted accounting principles, the applicable mandatory Accounting Standards and the relevant provisions of the Companies Act, 1956.

(b) Fixed Assets:

Fixed Assets are capitalised at cost inclusive of inward freight, duties, taxes and installation expenses.

(c) Investments:

Long term investments are carried at cost less other than temporary dimunition in value, if any. Current investments are carried at lower of cost or fair market value.

(d) Inventories:

Inventories are valued at lower of cost or net realisable value.

i) Cost of raw materials, stores and spare parts, packing materials and loose tools is arrived at on the basis of weighted average cost.

ii) Work-in-process and finished goods include conversion cost in addition to landed cost of raw materials.

iii) Scrap is valued at net realisable value.

(e) Revenue Recognition:

i) Revenue from sale is recognised when significant risks and rewards of ownership are transferred to the customers and no effective ownership is retained. Sales are net of trade discounts, sales tax, sales returns and remissions. Excise Duty recovered is presented as reduction from gross turnover.

ii) Revenue from services is recognised when services are rendered.

iii) Dividend and interest income is accounted when right to receive is established.

iv) Export benefits under duty exemption scheme is being accounted in the year of exports.

(f) Sale of Turnings, Borings and Bar ends:

Sale of turnings, borings and bar ends coming out of the production line as scrap, is reduced while working out cost of raw materials.

(g) Depreciation:

Depreciation on assets acquired prior to Public Issue of Shares/Debentures in 1986, is continued to be provided on Written Down Value at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956, whereas on assets acquired and brought into use after 1986, depreciation is provided on Straight Line Method at rates and in the manner specified under the said Schedule.

(h) Retirement Benefits:

i) Short term employee benefits are recognised as an expense at the undiscounted amount in the Profit & Loss Account of the year in which the related service is rendered,

ii) Contribution payable to recognised provident fund and superannuation scheme which is defined contribution scheme is charged to Profit & Loss Account. Retirement benefit in form of gratuity, administered by Life Insurance Corporation of India is a defined benefit obligation and is provided for on the basis of actuarial valuationas at Balance Sheet date. The actuarial gains and losses determined are recognised in the Profit and Loss Account.

i) Foreign Currency Transactions:

The transactions in foreign currency are accounted at the exchange rate prevailing at the date of the transaction. Realised gains and losses on settlement of foreign currency transactions are recognised in the Profit & Loss Account. Foreign currency assets & liabilites at the year end are translated at year-end exchange rates, and resultant exchange difference is recognised in the Profit & Loss Account.

(j) Taxation:

Provision for taxation comprises of current tax and deferred tax.

Current Tax is provided on taxable income using applicable tax rates and tax laws.

The deferred tax for timing difference between the book and tax profits/losses for the year is accounted for using the tax rates and laws that have been enacted or substantially enacted as of Balance Sheet date.

Deferred tax assets arising from the timing differences are recognised to the extent there is virtual certianty that assets can be realised in future.

(k) Impairment of Assets:

The Company assesses at each balance sheet date for possible impairment in carrying value of assets based on externa! and internal sources of information and indications. In case of recoverable amount of assets/cash generating unit is less than carrying amount, impairment loss is recognised in the Profit & Loss Account, for difference in carrying value of assets/cash generating units and recoverable amount.

(I) Provision and contigent liabilities:

i) Provision in respect of present obligation arising out of past events is made in accounts when reliable estimates can be made of the amount of obligation and it is probable that an outflow of resources will be required to settle the obligation.

ii) Contingent liabilites are disclosed by way of note to the financial statements after careful evaluation by the management of the facts and legal aspects of matter involved.


Mar 31, 2010

(a) System of Accounting:

The Company adopts the accrual basis in the preparation of its accounts.

(b) Inflation:

Assets and Liabilities are recorded at historical cost.

(c) Fixed Assets:

Fixed Assets are capitalised at cost inclusive of inward freight, duties, taxes and installation expenses.

(d) Investments:

Long term investments are carried at cost less other than temporary dimunition in value, if any. Current investments are carried at lower of cost or fair market value.

(e) Inventories:

Inventories are valued at lower of cost or net realisable value.

i) Cost of raw materials, stores and spare parts, packing materials and loose tools is arrived at on the basis of weighted average cost.

ii) Work in-process and finished goods include conversion cost in addition to landed cost of raw materials.

iii) Scrap is valued at net realisable value.

(f) Revenue Recognition:

i) Export Sales are recognised on the basis of date of bills of lading.

ii) Sales are recognised upon passage of title to the customers which generally coincides with despatch of goods and are recorded inclusive of excise duty but are net of trade discounts, sales tax, sales returns and remissions.

iii) Revenue from services is recognised when services are rendered.

iv) Dividend and interest income is accounted when right to receive is established.

v) Export benefits under duty exemption scheme is being accounted in the year of exports.

(g) Sale of Turnings, Boiings and Bar ends:

Sale of turnings, borings and bar ends coming out of the production tine as scrap, is reduced while working out cost of raw materials.

(h) Depreciation:

Depreciation on assets acquired prior to Public Issue of Shares/Debentures in 1986, is continued to be provided on Written Down Value at the rates as specified in Schedule XIV to the Companies Act, 1956, whereas on assets acquired and brought into use after 1986, depreciation is provided on Straight Line Method at rates and in the manner specified under the said Schedule.

(i) Retirement Benefits:

i) Short term employee benefits are recognised as an expense at the undiscounted amount in the Profit & Loss Account of the year in which the related service is rendered.

ii) Contribution payable to recognised provident fund and superannuation scheme which is defined contribution scheme is charged to Profit & Loss Account. Retirement benefit in the form of (being administered by LIC) is a defined benefit obligation and is provided for on the basis of actuarial valuation as at Balance sheet date.

The actuarial gains or losses determined are recognised in the profit and loss.

(j) Foreign Currency Transactions:

The transactions in foreign currency are accounted at the exchange rate prevailing at the date oi the transaction. Realised gains and tosses on settlement of foreign currency transactions are recognised in the Profit & Loss Account. Foreign currency assets & liabilites at the year end are translated at year-end exchange rates, and resultant exchange difference is recognised in the Profit & Loss Account,

(k) Taxation:

Provision for taxation comprises of current tax and deferred tax.

Current tax is provided on taxable income using applicable tax rates and tax laws.

The deferred tax for timing differences between the books and tax profits/losses for the year is accounted for using the tax rates and laws that have been enacted or substantially enacted as of Balance Sheet date.

Deferred tax assets arising from the timing differences are recognised to the extent there is virtual certianty that assets can be realised in future.

(l) Impairment of Assets:

Assets/cash generating units are assessed at each balance sheet dates for possible impairment in carrying value of assets based on external and internal sources of information and indications. In case of recoverable amount of assets/cash generating unit is less than carrying amount, impairment loss is recognised in the Profit & Loss Account, for difference in carrying value of assets/cash generating units and recoverable amount.

(m) Provision and contigent liabilities:

i) Provision in respect of present obligation arising out of past events is made in accounts when reliable estimates can be made of the amount of obligation and it is probable that an outflow of resources will be required to settle the obligation.

ii) Contingent liabilites are disclosed by way of note to the financial statements after careful evaluation by the management of the facts and legal aspects of matter involved.

 
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