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Accounting Policies of Simplex Castings Ltd. Company

Mar 31, 2015

A. Basis of Accounting

The financial statements have been prepared to comply with the Generally Accepted Accounting Principles in India, including the Accounting Standards notified under the relevant provisions of the Companies Act, 2013. The Financial Statements are prepared on going concern assumption on accrual basis under the historical cost convention, except for certain fixed assets which are carried at revalued amounts.

b. Revenue Recognition

Sale Revenue represents revenue earned (net of returns, discount and allowances) from the sale of products & services. Sale revenue is recorded when the goods are despatched.

c. Capital Subsidy

Amount received as capital subsidy from the government for setting up an industrial undertaking in a backward area is credited to Capital Reserve.

d. Fixed Assets & Depreciation Gross Block

- All fixed assets except Building and Plant & Machinery are stated at cost. Building & Plant & Machinery which were revalued by the company in 1995 are stated at their revalued book value. The increase in the revalued amount over their historical cost has been credited to Revaluation Reserve.

All costs, relating to the acquisition and installation of fixed assets are capitalised and include financing costs relating to borrowed funds attributable to construction or acquisition of fixed assets up to the date the industrial unit started production.

Depreciation

- The Company provides depreciation under written down value method (based on the useful life of the asset as prescribed in Schedule II of Companies Act, 2013) except in the case of Building and Plant & Machineries in which case depreciation is provided as per straight line method pursuant to section 123(2) of Companies Act, 2013.

- In the case of revalued assets, the additional charge of depreciation pertaining to revaluation amount is withdrawn from the Revaluation Reserve and adjusted to the depreciation charged in accounts.

- Depreciation on addition to or sale/discardment of assets is calculated prorata from the date of such additions or up to the date of sale/discardment as the case may be.

- Intangible Assets are stated at cost of acquisition less accumulated amortisation. Computer Software (Purchase cost, User licence fees etc.), Technical Know-how are amortised over a period of 4 years. Amortisation is done on Straight Line Method.

e. Impairment of Assets

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the Profit & Loss A/c in the year in which the asset is identified as impaired.

f. Investments

Investments are stated at cost. Provision for diminution in the value of the long term investments are made only if in the opinion of the management, the decline is other than temporary.

g. Inventory

- Raw and Packing Materials are valued at cost or market value whichever is lower. Cost includes taxes and duties other than credits under CENVAT.

- Finished and Semi finished goods are valued at lower of cost and net realisable value. They include cost of conversion and other costs incurred in bringing them to their present condition. Stock against cancelled orders or without any sale orders are suitably depreciated as market value is not ascertainable

- Works contract in progress are valued at lower of cost or net realisable value for the Company.

h. Borrowing Cost

Borrowing costs that are attributable to the acquisition, production or construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use or sale. All other borrowing costs are recognised as an expense in the period in which they are incurred.

i. Excise & Customs Duty

- Excise duty payable on the finished goods is accounted for on the clearance of goods from the factory and the liability is provided at the end of the year only on the finished goods stock lying in the factory.

- Customs duty is accounted for on the clearance of goods from the port / bonded warehouse and the liability of the same is provided at the end of the year on raw material stock in custom bonded warehouse or under clearance.

- CENVAT allowed on the raw material consumed in production of finished goods and in semi finished goods is reduced in material consumption.

j. Foreign Exchange Transactions

- Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction or that approximates the actual rate at the date of the transaction.

- Monetary items denominated in foreign currencies at the year end are restated at year end rates. In case of items which are covered by forward exchange contracts, the difference between the year end rate and rate on the date of the contract is recognised as exchange difference and the premium paid on forward contracts is recognised over the life of the contract.

- Exchange differences arising either on settlement or on translation of monetary items are recognised as income or expenses in the year in which they arise, except in cases where they relate to acquisition of fixed assets in which case they are adjusted in the carrying cost of fixed assets.

k. Retirement Benefits

- The Company has taken a policy under Group Gratuity Scheme with the Life Insurance Corporation of India. The company is liable to make up for the contribution in case funds in the hands of the trustees are insufficient to meet the actual claims of the employees under the rules of the fund.

- Leave Encashment is accounted for on actual payment.

l. Works Contracts

- The Company is accounting for all contracts in accordance with AS-7 issued by The Institute of Chartered Accountants of India on "Percentage of Completion method".

- Income in respect of various works contract is recognised considering reasonableness of its realisability. Income recognition is by way of actual payments received by the Company (excluding un-adjusted advance), against bills raised. Deferred receivables are not accounted as income till its realisation.

- Claims made on account of escalation are recognised as revenue only to the extent of the realisation of the amount of the claim.

m. Export incentives are accounted for on cash basis.

n. Research and Development Expenditure

Revenue Expenditure, including overhead on research and development, is charged to Profit & loss a/c as expenditure through the natural heads of expenses in the year in which it is incurred.

o. Miscellaneous Expenditure (to the extent not written off or adjusted)

Share Issue expenses is written off in ten yearly installments.

p. Taxation

- Provision for taxation is made in accordance with the income tax laws and rules prevailing at the time of the relevant assessment years.

- Deferred tax liability is recognised for all timing differences being the differences between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. It is quantified using the tax rates and laws enacted or substantively enacted as on Balance Sheet date.

- Deferred tax assets are recognised only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised.

- Provision for Wealth tax is made in accordance with the tax laws and rules prevailing at the time of the relevant assessment years.

q. Provisions & Contingent Liabilities

- Provisions are recognised in the accounts in respect of present probable obligations, the amount of which can be reliably estimated.

- Contingent Liabilities are disclosed in respect of possible obligations that arise from past events but their existence is confirmed by the occurance or non-occurance of one or more uncertain future events not wholly within the control of the company.


Mar 31, 2014

A. Basis of Accounting

The Company follows the mercantile system of accounting and recognises income and expenditure on accrual basis except those with significant uncertainties.

b. Revenue Recognition

Sale Revenue represents revenue earned (net of returns, discount and allowances) from the sale of products & services. Sale revenue is recorded when the goods are despatched.

c. Capital Subsidy

Amount received as capital subsidy from the government for setting up an industrial undertaking in a backward area is credited to Capital Reserve.

d. Fixed Assets & Depreciation Gross Block

* All fixed assets except Land, Building and Plant & Machinery acquired before 1992 are stated at cost. Fixed Assets which are revalued by the company are stated at their revalued book value. The increase in the revalued amount over their historical cost has been credited to Revaluation Reserve.

All costs, relating to the acquisition and installation of fixed assets are capitalised and include financing costs relating to borrowed funds attributable to consturction or acquisition of fixed assets upto the date the industrial unit started production.

Depreciation

* The Company provides depreciation under written down value method (at rates prescribed under Schedule XIV of Companies Act, 1956) except in the case of Building and Plant & Machineries in which case depreciation is provided as per straight line method pursuant to section 205(2)(b) of Companies Act, 1956.

* In the case of revalued assets, the additional charge of depreciation pertaining to revaluation amount is withdrawn from the Revaluation Reserve and adjusted to the depreciation charged in accounts.

* Depreciation on addition to or sale/discardment of assets is calculated prorata from the date of such additions or upto the date of sale/discardment as the case may be.

* Intangible Assets are stated at cost of acqusition less accumulated amortisation. Computer Software (Purchase cost, User licence fees etc.), Technical Know-how are amortised over a period of 4 years. Amortisation is done on Straight Line Method.

e. Impairment of Assets

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the Profit & Loss A/c in the year in which the asset is identified as impaired.

f. Investments

Investments are stated at cost. Provision for diminution in the value of the long term investments are made only if in the opinion of the management, the decline is other than temporary.

g. Inventory

* Raw and Packing Materials are valued at cost or market value whichever is lower. Cost includes taxes and duties other than credits under CENVAT.

* Finished and Semi finished goods are valued at lower of cost and net realisable value. They include cost of conversion and other costs incurred in bringing them to their present condition. Stock against cancelled orders or without any sale orders are suitably depreciated as market value is not ascertainable

* Works contract in progress are valued at lower of cost or net realisable value for the Company.

h. Borrowing Cost

Borrowing costs that are attributable to the acquisition, production or construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use or sale. All other borrowing costs are recognised as an expense in the period in which they are incurred.

i. Excise & Customs Duty

* Excise duty payable on the finished goods is accounted for on the clearance of goods from the factory and the liability is provided at the end of the year only on the finished goods stock lying in the factory.

* Customs duty is accounted for on the clearance of goods from the port / bonded warehouse and the liability of the same is provided at the end of the year on raw material stock in custom bonded warehouse or under clearance.

* CENVAT allowed on the raw material consumed in production of finished goods and in semi finished goods is reduced in material consumption.

j. Foreign Exchange Transactions

* Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction or that approximates the actual rate at the date of the transaction.

* Monetary items denominated in foreign currencies at the year end are restated at year end rates. In case of items which are covered by forward exchange contracts, the difference between the year end rate and rate on the date of the contract is recognised as exchange difference and the premium paid on forward contracts is recognised over the life of the contract.

* Exchange differences arising either on settlement or on translation of monetary items are recognised as income or expenses in the year in which they arise, except in cases where they relate to acquisition of fixed assets in which case they are adjusted in the carrying cost of fixed assets.

k. Retirement Benefits

* The Company has taken a policy under Group Gratuity Scheme with the Life Insurance Corporation of India. The company is liable to make up for the contribution in case funds in the hands of the trustees are insufficient to meet the actual claims of the employees under the rules of the fund.

* Leave Encashment is accounted for on actual payment.

l. Works Contracts

* The Company is accounting for all contracts in accordance with AS-7 issued by The Institute of Chartered Accountants of India on "Percentage of Completion method".

* Income in respect of various works contract is recognised considering reasonableness of its realisability. Income recognition is by way of actual payments received by the Company (excluding un-adjusted advance), against bills raised. Deferred receivables are not accounted as income till its realisation.

* Claims made on account of escalation are recognised as revenue only to the extent of the realisation of the amount of the claim.

m. Export incentives are accounted for on cash basis

n. Research and Development Expenditure

Revenue Expenditure, including overhead on research and development, is charged to profit & loss a/c as expenditure through the natural heads of expenses in the year in which it is incurred.

o. Miscellaneous Expenditure (to the extent not written off or adjusted)

Share Issue expenses is written off in ten yearly installments

p. Taxation

* Provision for taxation is made in accordance with the income tax laws and rules prevailing at the time of the relevant assessment years.

* Deferred tax liability is recognised for all timing differences being the differences between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. It is quantified using the tax rates and laws enacted or substantively enacted as on Balance Sheet date.

* Deferred tax assets are recognised only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised.

* Provision for Wealth tax is made in accordance with the tax laws and rules prevailing at the time of the relevant assessment years.

q. Provisions & Contingent Liabilities

Provisions are recognised in the accounts in respect of present probable obligations, the amount of which can be reliably estimated.

Contingent Liabilities are disclosed in respect of possible obligations that arise from past events but their existence is confirmed by the occurance or non-occurance of one or more uncertain future events not wholly within the control of the company.


Mar 31, 2012

A. Basis of Accounting

The Company follows the mercantile system of accounting and recognises income and expenditure on accrual basis except those with significant uncertainties.

b. Revenue Recognition

Sale Revenue represents revenue earned (net of returns, discount and allowances) from the sale of products & services. Sale revenue is recorded when the goods are despatched.

c. Capital Subsidy

Amount received as capital subsidy from the government for setting up an industrial undertaking in a backward area is credited to Capital Reserve.

d. Fixed Assets & Depreciation Gross Block

* All fixed assets except Land, Building and Plant & Machinery acquired before 1992 are stated at cost. Fixed Assets which are revalued by the company are stated at their revalued book value. The increase in the revalued amount over their historical cost has been credited to Revaluation Reserve.

All costs, relating to the acquisition and installation of fixed assets are capitalised and include financing costs relating to borrowed funds attributable to consturction or acquisition of fixed assets upto the date the industrial unit started production.

Depreciation

* The Company provides depreciation under written down value method (at rates prescribed under Schedule XIV of Companies Act, 1956) except in the case of Building and Plant & Machineries in which case depreciation is provided as per straight line method pursuant to section 205(2)(b) of Companies Act, 1956.

* In the case of revalued assets, the additional charge of depreciation pertaining to revaluation amount is withdrawn from the Revaluation Reserve and adjusted to the depreciation charged in accounts.

* Depreciation on addition to or sale/discardment of assets is calculated prorata from the date of such additions or upto the date of sale/discardment as the case may be.

* Intangible Assets are stated at cost of acqusition less accumulated amortisation. Computer Software (Purchase cost, User licence fees etc.), Technical Know-how are amortised over a period of 4 years. Amortisation is done on Straight Line Method.

e. Impairment of Assets

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the Profit & Loss A/c in the year in which the asset is identified as impaired.

f. Investments

Investments are stated at cost. Provision for diminution in the value of the long term investments are made only if in the opinion of the management, the decline is other than temporary.

g. Inventory

* Raw and Packing Materials are valued at cost or market value whichever is lower. Cost includes taxes and duties other than credits under CENVAT.

* Finished and Semi finished goods are valued at lower of cost and net realisable value. They include cost of conversion and other costs incurred in bringing them to their present condition. Stock against cancelled orders or without any sale orders are suitably depreciated as market value is not ascertainable

h. Borrowing Cost

Borrowing costs that are attributable to the acquisition, production or construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use or sale. All other borrowing costs are recognised as an expense in the period in which they are incurred.

i. Excise & Customs Duty

* Excise duty payable on the finished goods is accounted for on the clearance of goods from the factory and the liability is provided at the end of the year only on the finished goods stock lying in the factory.

* Customs duty is accounted for on the clearance of goods from the port / bonded warehouse and the liability of the same is provided at the end of the year on rawmaterial stock in custom bonded warehouse or under clearance.

* CENVAT allowed on the raw material consumed in production of finished goods and in semi finished goods is reduced in material consumption.

j. Foreign Exchange Transactions

* Transactions in foreign currencies are recorded at the exchange rates prevailing on the date of the transaction or at the exchange rates as per related forward exchange contracts. Transactions not covered by forward exchange rate and outstanding at the year end are also translated at exchange rates prevailing at the year end and the profit / loss so determined and also the realised exchanged gains / losses are recognised in the Profit & Loss account.

* Exchange differences arising either on settlement or on translation of monetary items are recognised as income or expenses in the year in which they arise, except in cases where they relate to acquisition of fixed assets in which case they are adjusted in the carrying cost of fixed assets.

k. Retirement Benefits

* The Company has taken a policy under Group Gratuity Scheme with the Life Insurance Corporation of India. The company is liable to make up for the contribution in case funds in the hands of the trustees are insufficient to meet the actual claims of the employees under the rules of the fund.

* Leave Encashment is accounted for on actual payment. l. Export incentives are accounted for on cash basis

m. Research and Development Expenditure

Revenue Expenditure, including overhead on research and development, is charged to profit & loss a/c as expenditure through the natural heads of expenses in the year in which it is incurred. n. Miscellaneous Expenditure (to the extent not written off or adjusted)

* Share Issue expenses is written off in ten yearly instalments. o. Taxation

* Provision for taxation is made in accordance with the income tax laws and rules prevailing at the time of the relevant assessment years.

* Deferred tax liability is recognised for all timing differences being the differences between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. It is quantified using the tax rates and laws enacted or substantively enacted as on Balance Sheet date.

* Deferred tax assets are recognised only to the extent that there is a reasonable certainity that sufficient future taxable income will be available against which such deferred tax assets can be realised.

* Wealth Tax is accounted for at the time of actual payment by debit to Prior Year Expenses in the year of payment and no provision is made in the accounts for the same.

p. Provisions & Contingent Liabilities

Provisions are recognised in the accounts in respect of present probable obligations, the amount of which can be reliably estimated.

Contingent Liabilities are disclosed in respect of possible obligations that arise from past events but their existence is confirmed by the occurance or non-occurance of one or more uncertain future events not wholly within the control of the company.


Mar 31, 2011

1. Basis of Accounting

The Company follows the mercantile system of accounting and recognises income and expenditure on accrual, basis except those with significant uncertainties.

2. Revenue Recognition

Sale Revenue represents revenue earned (net of returns, discount and allowances) from the sale of products & services. Sale revenue is recorded when the goods are despatched. The sales value is exclusive of sales tax.

3. Capital Subsidy

Amount received as capital subsidy from the government for setting up an industrial undertaking in a backward area is credited to Capital Reserve.

4. Fixed Assets & Depreciation

Gross Block

- All fixed assets except Land, Building and Plant & Machinery acquired before 1992 are stated at cost. Fixed Assets which are revalued by the company are stated at their revalued book value. The increase in the revalued amount over their historical cost was credited to Revaluation Reserve.

All costs, relating to the acquisition and installation of fixed assets are capitalised and include financing costs relating to borrowed funds attributable to consturction or acquisition of fixed assets upto the date the industrial unit started production. Thereafter, all costs excluding financing costs relating to the acquisition and installation of fixed assets are capitalised upto the date the asset is put to use.

Depreciation

- The Company provides depreciation under written down value method (at rates prescribed under Schedule XIV of Companies Act, 1956) except in the case of Building and Plant & Machineries in which case depreciation is provided as per straight line method pursuant to section 205(2)(b) of Companies Act, 1956.

- In the case of revalued assets, the additional charge of depreciation pertaining to revaluation amount is withdrawn from the Revaluation Reserve and adjusted to the depreciation charged in accounts.

- Depreciation on addition to or sale/discardment of assets is calculated prorata from the date of such additions or upto the date of sale/discardment as the case may be.

- Intangible Assets are stated at cost of acqusition less accumulated amortisation. Computer Software (Purchase cost, User licence fees etc.), Technical Know-how are amortised over a period of 4 years. Amortisation is done on Straight Line Method.

5. Impairment of Assets

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the Profit & Loss A/c in the year in which the asset is identified as impaired.

6. Investments

Investments are stated at cost. Provision for diminution in the value of the long term investments are made only if in the opinion of the management, the decline is other than temporary.

7. Inventory

- Raw and Packing Materials are valued at cost or market value whichever is lower. Cost includes taxes and duties other than credits under CENVAT.

- Finished and Semi finished goods are valued at lower of cost and net realisable value. They include cost of conversion and other costs incurred in bringing them to their present condition. Stock against cancelled orders or without any sale orders are suitably depreciated as market value is not ascertainable

- Machinery Spares & Tools are valued at lower of cost or market value.

8. Borrowing Cost

Borrowing costs that are attributable to the acquisition, production or construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use or sale. All other borrowing costs are recognised as an expense in the period in which they are incurred.

9. Excise & Customs Duty

- Excise duty payable on the finished goods is accounted for on the clearance of goods from the factory and the liability . is provided at the end of the year only on the finished goods stock lying in the factory.

- Customs duty is accounted for on the clearance of goods from the port bonded warehouse and the liability of the same is provided at the end of the year on raw material stock in custom bonded warehouse or under clearance.

- CENVAT allowed on the raw material consumed in production of finished goods and in semi finished goods is reduced in material consumption.

10. Foreign Exchange Transactions

- Transactions in foreign currencies are recorded at the exchange rates prevailing on the date of the transaction or at the exchange rates as per related forward exchange contracts. Transactions not covered by forward exchange rate and outstanding at the year end are also translated at exchange rates prevailing at the year end and the profit / loss so determined and also the realised exchanged gains / losses are recognised in the Profit & Loss account.

- Exchange differences arising either on settlement or on translation of monetary items are recognised as income or expenses in the year in which they arise, except in cases where they relate to acquisition of fixed assets in which case they are adjusted in the carrying cost of fixed assets.

11. Retirement Benefits

- The Company has taken a policy under Group Gratuity Scheme with the Life Insurance Corporation of India and its contribution in terms of the policy adequately covers the liability for gratuity of employees covered therein. The company is liable to make up for the contribution in case funds in the hands of the trustees are insufficient to meet the actual claims of the employees under the rules of the fund. In case of remaining employees the same is accounted as and when liability arises.

- Leave Encashment is accounted for on actual payment

12. Export incentives are accounted for on cash basis

13. Research and Development Expenditure

Revenue Expenditure, including overhead on research and development, is charged to profit & loss a/c as expenditure through the natural heads of expenses in the year in which it is incurred.

14. Miscellaneous Expenditure (to the extent not written off or adjusted)

-Share Issue expenses is written off in ten yearly instalments.

15. Taxation

- Provision for taxation is made in accordance with the income tax laws and rules prevailing at the time of the relevant assessment years.

- Deferred tax liability is recognised for all timing differences being the differences between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. It is quantified using the tax rates and laws enacted or substantively enacted as on Balance Sheet date.

- Deferred tax assets are recognised and carried forward to the extent that there is a reasonable certainity that sufficient future taxable income will be available against which such deferred tax assets can be realised.

- Wealth Tax is accounted for at the time of actual payment by debit to Prior Year Expenses in the year of payment and no provision is made in the accounts for the same.

16. Provisions & Contingent Liabilities

Provisions are recognised in the accounts in respect of present probable obligations, the amount of which can be reliably estimated.

Contingent Liabilities are disclosed in respect of possible obligations that arise from past events but their existence is confirmed by the occurance or non-occurance of one or more uncertain future events not wholly within the control of the company.


Mar 31, 2010

(A) Basis of Accounting

The Company follows the mercantile system of accounting and recognises income and expenditure on accrual basis except those with significant uncertainties.

(B) Revenue Recognition

Sale Revenue represents revenue earned (net of returns, discount and allowances) from the sale of products & services. Sale revenue is recorded when the goods are despatched.

(C) Capital Subsidy

Amount received as capital subsidy from the government for setting up an industrial undertaking in a backward area is credited to Capital Reserve.

(D) Fixed Assets & Depreciation Gross Block

- All fixed assets except Land, Building and Plant & Machinery acquired before 1992 are stated at cost. Fixed Assets which are revalued by the company are stated at their revalued book value. The increase in the revalued amount over their historical cost has been credited to Revaluation Reserve.

All costs, relating to the acquisition and installation of fixed assets are capitalised and include financing costs relating to borrowed funds attributable to consturction or acquisition of fixed assets upto the date the industrial unit started production.

Depreciation

- The Company provides depreciation under written down value method (at rates prescribed under Schedule XIV of Companies Act, 1956) except in the case of Building and Plant & Machineries in which case depreciation is provided as per straight line method pursuant to section 205(2)(b) of Companies Act, 1956.

- In the case of revalued assets, the additional charge of depreciation pertaining to revaluation amount is withdrawn from the Revaluation Reserve and adjusted to the depreciation charged in accounts.

- Depreciation on addition to or sale/discardment of assets is calculated prorata from the date of such additions or upto the date of sale/discardment as the case may be.

- Intangible Assets are stated at cost of acqusition less accumulated amortisation. Computer Software (Purchase cost, User licence fees etc.), Technical Know-how are amortised over a period of 4 years. Amortisation is done on Straight Line Method.

(E) Impairment of Assets

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the Profit & Loss A/c in the year in which the asset is identified as impaired.

(F) Investments

Investments are stated at cost. Provision for diminution in the value of the long term investments are made only if in the opinion of the management, the decline is other than temporary.

(G) Inventory

- Raw and Packing Materials are valued at cost or market value whichever is lower. Cost includes taxes and duties other than credits under CENVAT.

- Finished and Semi finished goods are valued at lower of cost and net realisable value. They include cost of conversion and other costs incurred in bringing them to their present condition. Stock against cancelled orders or without any sale orders are suitably depreciated as market value is not ascertainable

(H) Borrowing Cost

Borrowing costs that are attributable to the acquisition, production or construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use or sale. All other borrowing costs are recognised as an expense in the period in which they are incurred.

(I) Excise & Customs Duty

- Excise duty payable on the finished goods is accounted for on the clearance of goods from the factory and the liability is provided at the end of the year only on the finished goods stock lying in the factory.

Customs duty is accounted for on the clearance of goods from the port / bonded warehouse and the liability of the same is provided at the end of the year on rawmaterial stock in custom bonded warehouse or under clearance.

- CENVAT allowed on the raw material consumed in production of finished goods and in semi finished goods is reduced in material consumption.

(J) Foreign Exchange Transactions

-Transactions in foreign currencies are recorded at the exchange rates prevailing on the date of the transaction or at the exchange rates as per related forward exchange contracts. Transactions not covered by forward exchange rate and outstanding at the year end are also translated at exchange rates prevailing at the year end and the profit / loss so determined and also the realised exchanged gains / losses are recognised in the Profit & Loss account.

- Exchange differences arising either on settlement or on translation of monetary items are recognised as income or expenses in the year in which they arise, except in cases where they relate to acquisition of fixed assets in which case they are adjusted in the carrying cost of fixed assets.

(K) Retirement Benefits

- The Company has taken a policy under Group Gratuity Scheme with the Life Insurance Corporation of India. The company is liable to make up for the contribution in case funds in the hands of the trustees are insufficient to meet the actual claims of the employees under the rules of the fund. In case of remaining employees the same is accounted as and when liability arises.

- Leave Encashment is accounted for on actual payment. (L) Export incentives are accounted for on cash basis

(M) Research and Development Expenditure

Revenue Expenditure, including overhead on research and development, is charged to profit & loss a/c as expenditure through the natural heads of expenses in the year in which it is incurred.

(N) Miscellaneous Expenditure (to the extent not written off or adjusted)

- Share Issue expenses is written off in ten yearly instalments.

(O) Taxation

Provision for taxation is made in accordance with the income tax laws and rules prevailing at the time of the relevant assessment years.

- Deferred tax liability is recognised for all timing differences being the differences between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. It is quantified using the tax rates and laws enacted or substantively enacted as on Balance Sheet date.

- Deferred tax assets are recognised only to the extent that there is a reasonable certainity that sufficient future taxable income will be available against which such deferred tax assets can be realised.

- Wealth Tax is accounted for at the time of actual payment by debit to Prior Year Expenses in the year of payment and no provision is made in the accounts for the same.

(P) Provisions & Contingent Liabilities

Provisions are recognised in the accounts in respect of present probable obligations, the amount of which can be reliably estimated.

Contingent Liabilities are disclosed in respect of possible obligations that arise from past events but their existence is confirmed by the occurance or non-occurance of one or more uncertain future events not wholly within the control of the company.

 
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