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Accounting Policies of Singer India Ltd. Company

Jun 30, 2015

(a) Basis of Preparation

The financial statements of the Company have been prepared in accordance with the generally accepted accounting principles in India (Indian GAAP). The company has prepared these financial statements to comply in all material respects with the accounting standards notified under section 133 of the Companies Act 2013 ('the Act), read together with paragraph 7 of the Companies (Accounts) Rules 2014 and provisions of the Act, to the extent notified. The financial statements have been prepared on an accrual basis and under the historical cost convention except for certain Fixed Assets which are carried at revalued amounts and on going concern basis.

(b) Use of Estimates

The preparation of the Financial Statements in conformity with generally accepted accounting principles requires the management to make estimates and assumptions that affect the reporting balances of assets and liabilities and disclosures relating to contingent liabilities as at the date of the financial statements and reporting amounts of income and expenditure during the year. Contingencies are recorded when it is probable that a liability will be incurred, and the amount can be reasonably estimated. Actual results could differ from such estimates. Any revision to accounting estimates is recognized in the period the same is determined.

(c) Fixed Assets (Tangible & Intangible)

Tangible Fixed Assets are stated at cost (or revalued amount as the case may be), less accumulated depreciation and impairment losses, if any. Cost comprises the purchase price / cost of acquisition including taxes, duties, freight and other incidental expenses related to acquisition, construction and installation to bring the asset to its working condition for its intended use. In case of revaluation of fixed assets, the original cost as written up by the valuer, is considered in the accounts and the differential amount is transferred to revaluation reserve. Borrowing costs that are directly attributable to acquisition, construction or production of a qualifying asset are capitalized.

Intangible fixed assets are stated at cost less accumulated amortization and net of impairments, if any. An intangible asset is recognized if it is probable that the expected future economic benefits that are attributable to the asset will flow to the Company and its cost can be measured reliably. Intangible assets having finite useful lives are amortized on straight line basis over their estimated useful lives.

(d) Impairment of Assets

Regular review is done to determine whether there is any indication for impairment in carrying amount of the Company's fixed assets. If any indication exists, an assets recoverable amount is estimated based on internal / external factors. An impairment loss is recognized if the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the asset's net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value at the weighted average cost of capital.

(e) Investments

Long term investments are stated at cost. Provision for diminution in value, other than temporary, is made in the accounts. Earnings on investments are accounted for when the right to receive payment is established.

(f) Inventories

Raw materials are valued at Lower of cost and net realizable value. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. Cost is determined on a First in First out basis.

Work-in-progress and finished goods are valued at Lower of cost and net realizable value. Cost includes direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity. Cost of finished goods includes excise duty. Cost is determined on a First in First Out basis.

Traded goods are valued at Lower of cost and net realizable value. Cost includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition. Cost is determined on a First in First out basis.

Goods in transit are valued at cost

Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion to make the sale.

(g) Warranties

Product warranty costs are determined using reasonable estimates based on costs incurred in the past and are provided for in the year sale is made. Contractual obligations in respect of warranties includes estimates made for the products sold by the Company which are covered under free replacement warranty on manufacturing defects / breakages etc. in respect of sewing machines and domestic appliances are accrued at 1% of sales to cover future costs.

(h) Excise Duty

Excise duty is accounted for at the point of manufacture of goods and accordingly, is considered for valuation of finished goods stock lying in the factory and branches and as on the Balance Sheet date.

(i) Revenue recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured. Revenue from sale of goods including traded and manufactured products is recognized upon passage of title to the customers, in accordance with the Sale of Goods Act, 1930. The Company collects Sales taxes / Value added Taxes (VAT) on behalf of the Government and, therefore, these are not economic benefits flowing to the Company. Hence they are excluded from Revenue. Interest income is recognized on time proportionate basis taking into account the amount outstanding and the rate applicable and is stated at gross. Export incentives are accounted on accrual basis.

(j) Depreciation / Amortization

i) Tangible Assets

a) Depreciation on the tangible fixed assets is provided on straight line method based on the useful life of the assets as estimated by the management. The estimate of the useful life of the assets has been assessed based on internal evaluation/ technical advice which considered the nature of the asset, expected physical wear and tear, the operating conditions of the asset etc., The useful lives of following assets; furniture & fittings, plant and machinery and office equipment, are depreciated over estimated useful lives of 5 years, 4 - 15 years & 2- 5 years respectively which are lower than those indicated in Schedule II. The Company has used the following lives to provide depreciation on its fixed assets (except building as mentioned in para (b) below):

b) The buildings are depreciated equally over the balance useful life ascertained by independent technical expert, which ranges between 41 years and 52 years after considering the structural condition etc. The management believes that the balance useful lives so assessed best represent the periods over which the buildings are expected to be in use.

c) Leasehold land is amortized over the lease period.

d) In case of leasehold land and building which were revalued in the past, the additional depreciation on the increased value of the assets due to revaluation is debited to Statement of Profit & Loss and equivalent amount is transferred from Revaluation Reserve to General Reserve.

e) Depreciation on fixed assets added/disposed off during the year is provided on pro-rata basis with reference to the month of addition/ disposal.

f) In case of impairment, if any, depreciation is provided on the revised carrying amount of the assets over its remaining useful life.

ii) Intangible Assets

Computer software is amortized over a period of thirty six months on the straight line method.

(k) Lease

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased assets are classified as operating leases. Operating lease payments are recognized as an expense in the Statement of Profit & Loss on a straight-line basis over the lease term.

(l) Foreign currency transactions

Foreign currency transactions are recorded 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 the transaction.

Foreign currency monetary items are reported using the closing rate. Non-monetary items, which are carried in terms of historical cost denominated in a foreign currency, are reported using the exchange rate at the date of the transaction.

Exchange differences arising on the settlement of monetary items or on reporting company's monetary items at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognised as income or as expenses in the year in which they arise.

(m) Employees Benefits

Short Term Employee Benefit is recognized as an expense in the Statement of Profit and Loss of the year in which related service is rendered. Post employment and other Long Term Employee Benefits are provided in the Accounts in the following manner:

i) Gratuity: Maintained as a defined benefit retirement plan and contribution is made to the Life Insurance Corporation of India, as per the Company's Scheme. Provision / write back, if any is made on the basis of the present value of the liability as at the Balance Sheet date determined by actuarial valuation following projected Unit Credit Method and is treated as liability.

ii) Leave Encashment: As per independent actuarial valuation as at the Balance Sheet date following projected Unit Credit Method in accordance with the requirements of Accounting Standard AS-15 on Employee Benefit' is included in provisions.

iii) Provident Fund: Liability on account of Provident Fund (Pension) for employees is a defined contribution wherever contributions are made to a fund administered by Government Provident Fund Authority.

For employees, Provident Fund administered by a Recognized Trust, is a Defined Benefit Plan (DBP) wherein the employee and the Company make monthly contributions. Pending the issuance of Guidance Note from the Actuarial Society of India, actuarial valuation is not carried out and the Company provides for required liability at year end, in respect of the shortfall, if any, upon confirmation from the Trustees of such fund.

(n) Research and development

Research and development expenses of revenue nature are charged to the Statement of Profit & Loss in the year in which they are incurred.

(o) Taxes on Income

Tax expense comprises of current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act,1961.Deferred income taxes reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. In situations where the company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits.

The carrying amount of deferred tax assets are reviewed at each balance sheet date. The company writes down the carrying amount of the deferred tax assets to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realized. Any such write-down is reversed to the extent that it becomes reasonable certain or virtually certain, as the case may be, that sufficient future taxable income will be available.

Minimum Alternate Tax (MAT) is accounted for in accordance with tax laws which give rise to future economic benefits in the form of tax credits against which future income tax liability is adjusted and is recognized as an asset in the Balance Sheet.

(p) Provisions, Contingent Liabilities & Contingent Assets

A provision is recognized when the Company has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions made in terms of Accounting Standard-29, are not discounted to its present value and are determined based on the management estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current management estimates.

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. The company does not recognize a contingent liability but discloses its existence in the financial statements.

Contingent assets are not recognized in the financial statements.

(q) Earnings per share

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

(r) Events after the Balance Sheet date

Events occurring after the date of the Balance Sheet which affect the financial position to a material extent are taken into cognizance.

(s) Cash and cash equivalents

Cash and cash equivalents for the purpose of cash flow statement comprise cash at bank and in hand and fixed deposits with maturity of three months or less.


Jun 30, 2014

(a) Basis of Preparation

These Financial Statements have been prepared In accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) under ihe histoncal cost convention on accrual basis, except for certain tangible assets which are earned at revalued amounts. Those Financial Statement have been prepared lo comply in all material aspects Wtth the accounting standards notified under section 211(3C) of the Gempar-ios Act, 2013 (The 2013 Act) [which continue to be applicable bi rasped of Section 133 of the Companies Act 2013 (The 2013 Act) in terms, of general circular 15/2013 dated 13th September 2013 of ihe Ministry of Corporate Affaire] and the relevant provisions of the 1556 Act 2013 Act as applicable. The accounting policies have been consistently applied by the Company and are consistent with those used in ihe previous yeai

(h) Use of Estimates

Tire preparation of the Financial Statements In conformily wrth generally accepted accounting principles requires the management (o make estimates and assumptions that affect me reporting balances of assets and liabilities and disclosures relating to oonlingent liabilities as al the date of tee financial statements and reporting amounts of income and expenditure during the year Contingencies are recorded when it is probable that a liability will be incurred, and the amount can be reasonably estimated Aclual results could differ from such estimates. Ary revision to accounting estimates k recognised in the period the same is determined

(c) Tangible Fixed Assets

Fixed Assets are stated at cost (tir revalued amount as the caso may he}, lass accumulated depreciation and impairment losses, if any. Cosl comprises Ihe purchase price! cost of acquisition including taxes, duties, freight and othar incidental ex censes related to acquisition, construction and installation lo bring the asset lo its working condition for its niendod use. Wherovor assets are revalued, amount added on revaluation based on approved valuer's report is disclosed separately as required by ihe Companies Act, 1556. Borrowing costs that are ectly atlribulable lo acquisition, construction or production of a qualifying asset are capitalized.

(d) intangible Fixed Assets

Intangible fixed assets are stated at cost less accumulated amoflization and net of impairments, if any An intangible asset is recognized if it is probable that tee expected future economic benefits lhai are attributable to the asset will flow lo the Company and its cost can be measured reliably Inlang.hte assets Having finite useful lives are amortized on straight lino basis over their estimated useful lives. Computer Software is amortised over a period of thirty six months Is done on the straight lino method.

(6) Impair merit of Assets

Regular review js done to determine whether there is any indication for impairment in carrying amount of the Company's fixed assets if any indication exists, an assets recoverable amount is estimated based nr internal /external factors. An Impairment toss Is recognized it tee carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of Ihe asset's net selling price and value in use In assessing value in use, the estimated future cashflows are discounted to their present value at the weighted average cost of capital.

[f) investments

Long term investments are stated at cost Provision for diminution in value, olher than temporary, is made in ihe accou nls. Ea rungs on i nvesl ments a re accounted for when the tight to receive payment is established.

(g) Inventories

Inventories (Finished Goods and Work-in- progress) are valued at lower of cost or net realisable value, on the basis of physical verification earned oul by the martkgdlrierlt. Cost is arrived at on FIFO basis and includes appropriate portion of allocable overheads. Cost of finished goods Includes excuse duly Not realizable value is the estimated sell ng pnoe in ordinary course of husmess, less estimated cost necessary lo make the sale. Raw Materials are valued at cost (FIFO basis). Goods in Uans-it are valued at cost. Cost of inventories have been computed to include all costa of purchases, cost of conversion and ether costs incurred In bringing the inventories lo the-r present location and condition

(ti) Warranties

Product warranty costs are determined using reasonable estimates based on costs incurred in ilia past and ara provided for In the year sate is made. Contractual obligations in respect of warranties includes estimates made lor the products sold by lihe Company which are covered under free replacement warranty on manufacturing defects ) breakages etc in respect of sewing machines and household consumer durables / small appliances and are accrued at 1% of sates Id cover future costs.

(I) Excise Duty

Excise duly is accounted for at the point of manufacture of goods and accordingly, is considered for valuation of finished goods stock lying in the factory and branches and as on the Balance Sheet date

y) Rave n ue recog n itio n

Revenue rs recognized to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured. Revenue from sale of goods is recognized when all significant risk and rewards of the ownership are Iransferred to Ihe buyer as per the terms of sales which coincides with the despatch of the goods. Revenue is recorded net of vstue added tax t sates tax. returns and gross of excise duty, if any. Interest income is recognized on lime proportionate basis taking inio account the amount outstanding and the rate applicable and is stated at gross. Export Incentive are accounted an accrual basis

(k) Depreciation

Depreciation is provided on a straight-line basis at the per ennum rates (wilh the corresponding useful life) specified below

Assets Percentage Estimated useful life In years

Building 3.34% 30 yeara Plant and

machinery 4.75% to 25% 4 years to 21 years Vehicles 25% 4 years

Office equipment 20% 5 years

Furniture and fixtures 20% 5 years

Computers 33.33% 3 years Leasehold

Improvements 33.33% 3 years

Assets costing less than Rs S.DOO.r- per unit are depreciated ai the rate of 100%, Depreciation on additions Is provided on prorata basis from the date of such additions. Si milady, depreciation cm assets 50id/diposed off during 'he year is provided up ip the date on which such assets are sold.'disposed off Leasehold improvements represent renovation in new shops opened.

The difference between depredation calculated and provided on the revalued amount of fixed assels and depreciation calculated nn the original cost of fixed assets is recouped from Revaluation Reserve,

(l) Lease

Leases where the lessor effectively retains su bstant ai ly aII fh e r-s ks a nd be n e'; ts of ownership of (he teased assets are classified as operating leases Operating lease payments are recognized as an expense in the Statement of Profit S Loss on a straight-line basis over the lease term.

(m) Foreign currency transactions

Foreign cumercy transactions one recorded in [he reporting currency, by applying to the foreign currency amount the exchange rale between the reporting currency and the foreign currency al the dale of the transaction.

Foreign currency monetary Items are reported using She closing rate. Non-monetary item;, which are carried In terms of histoncal cost denominated in a foreign currency, are repnrted using Ihe exchange rale althe date of She transaction.

Exchange differences ansing on the settlemenl of monetary items or on reporting company's monetary items at rates different from those at which (hey were initially recorded during the year, or reported In previous financial statenients, are recagnrsec as income eras expenses in the year in which they arise

(n) Employees Benefits

Sinprt Term Empky&i Benefit Is recognised as an expense in the Statement of Profit and Loss of the year hp which related service is rendered Post employmenf And other Long Term Employee Benefits are provided In the Accounts in the following manner

I) Gratuity: Maintained as a defined benefit retirement plan and conlnbuhon is made to the Life insurance Corporation of India, as per the Company's Schema. Provision t wnto back, if any is made on the basis of the present value ol the liability as at the Balance Sheet date determined by actuarial valuation following projected Unit Credit Method and is treated as Jlahi lity.

ii Leave Encashment. As per independent actuarial valuation as at Ihe Balance Sheet date following projected Unit Credit Method in accordance with the requirements of Accounting Standard AS-15 on 'Employee Benefit* is included in provisions.

Il|) Provident Fund Liability on account of Provident Fund {Pension} for employees is a defined contribution wherever contributions are made to a fund administered hy Government Provident Fund Authority.

For employees. PftJV deni Fund administered by a Recognised Trust, is a Defined Benefit Plan (DBF} wherein the employee and the Company make monthly contnbulions, Pending the issuance of Guidance Note from the Acluarial Society Of India, actuarial valuation :s not carried out and the Company provides (or requi red liabil Hy at y ea r end, in rasped of the shortfall, if any, upon confirmation from ttie Trustees of such fund.

jo) Research and deve I o pme nt

Research and development exposes of revenue nature are charged to the Stale merit of Profit a Loss in the year in which they are incurred

(p) Taxes or Income

Income Tax is accounted for in accordance with Accounting Standard on "Accounting for Taxes on Income' notified pursuant to the Companies (Accounting Standards) Rules, 2006.

Minimum Alternate Tax (MAT) is accounted lor in accordance with tax laws which give rise to future economic benefits in the form of tax credits against which future income tax liability 15 adjusted and is recognized as an asset in the Balance Sheet

Deferred Tax is provided and rocognizod on timing differences between laxable income and accounilng income subject lo prudential consideration. Deferred Tax Asset on unabsorbed depreciation and carry forward ol losses are recognized when there is virtual certainty aboul availability of future laxable income to realize such assets.

jq) Provisions, Contingent Liabilities & Contingent Assets

Provisions are recognized when there is a present legal or statutory obligation as a result of pasi events and where it is probable ihal there will be outflow of resources to settle the obligation and when a reliable estimate of the amount of the obligation can be made.

Contingent Liabilities are recognized only when there Is a possible noligatjein arising from pasl events due to occurrence or non-occurrence of one or more uncertain future events not wholly wilhm Ihe control of the Company or where any preseni obligation cannot be measured m terms of future outflow of resources or where a reliable estimate oJ Ihe obligation cannot be made, Qhiigaimns are assessed on an ongoing basis and only those having a largely probable outflow or resources are provided tor

Contingent Assets are non recognized in Ihe Financial Statements.

fr) Earnings per share

Earning per snare is calculated by dividing the nat profit or loss for the year attributable to equity shareholders by the weighted average number of equity sharos outstand ng during the year

(5) Events after the Balance Sheet date

Events occurring after the date of the Balance Sheet which affect the financial position to a materia I exten t are take n into cognizance.


Jun 30, 2013

(a) Basis of Preparation

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these Financial Statements to comply in all material aspects with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The Financial Statements have been prepared on accrual basis and under the historical cost convention. The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year.

(b) Use of Estimates

The preparation of the Financial Statements in conformity with generally accepted accounting principles requires the management to make estimates and assumptions that affect the reporting balances of assets and liabilities and disclosures relating to contingent liabilities as at the date of the financial statements and reporting amounts of income and expenditure during the year. Contingencies are recorded when it is probable that a liability will be incurred, and the amount can be reasonably estimated. Actual results could differ from such estimates. Any revision to accounting estimates is recognised in the period the same is determined.

(c) Tangible Fixed Assets

Fixed Assets are stated at cost (or revalued amount as the case may be), less accumulated depreciation and impairment losses, if any. Cost comprises the purchase price / cost of acquisition including taxes, duties, freight and other incidental expenses related to acquisition, construction and installation to bring the asset to its working condition for its intended use. Wherever assets are revalued, amount added on revaluation based on approved valuer''s report is disclosed separately as required by the Companies Act, 1956. Borrowing costs that are directly attributable to acquisition, construction or production of a qualifying asset are capitalized.

(d) Intangible Fixed Assets

Intangible fixed assets are stated at cost less accumulated amortization and net of impairments, if any. An intangible asset is recognized if it is probable that the expected future economic benefits that are attributable to the asset will flow to the Company and its cost can be measured reliably. Intangible assets having finite useful lives are amortized on straight line basis over their estimated useful lives. Computer Software is amortised over a period of thirty six months is done on the straight line method.

(e) Impairment of Assets

Regular review is done to determine whether there is any indication for impairment in carrying amount of the Company''s fixed assets. If any indication exists, an assets recoverable amount is estimated based on internal / external factors. An impairment loss is recognized if the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the asset''s net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value at the weighted average cost of capital.

(f) Investments

Long term investments are stated at cost. Provision for diminution in value, other than temporary, is made in the accounts. Earnings on investments are accounted for when the right to receive payment is established.

(g) Inventories

Inventories (Finished Goods and Work-in- progress) are valued at lower of cost or net realisable value, on the basis of physical verification caried out by the management. Cost is arrived at on FIFO basis and includes appropriate portion of allocable overheads. Cost of finished goods includes excise duty. Net realizable value is the estimated selling price in ordinary course of business, less estimated cost necessary to make the sale. Raw Materials are valued at cost (FIFO basis). Goods in transit are valued at cost. Cost of inventories have been computed to include all costs of purchases, cost of conversion and other costs incurred in bringing the inventories to their present location and condition.

(h) Warranties

Product warranty costs are determined using reasonable estimates based on costs incurred in the past and are provided for in the year sale is made. Contractual obligations in respect of warranties includes estimates made for the products sold by the Company which are covered under free replacement warranty on manufacturing defects / breakages etc. in respect of sewing machines and household consumer durables / small appliances and are accrued at 1% of sales to cover future costs.

(i) Excise Duty

Excise duty is accounted for at the point of manufacture of goods and accordingly, is considered for valuation of finished goods stock lying in the factory and branches and as on the Balance Sheet date.

(j) Revenue recognition

i) Revenue is recognized to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured. Revenue from sale of goods is recognized when all significant risk and rewards of the ownership are transferred to the buyer as per the terms of sales which coincides with the despatch of the goods. Revenue is recorded net of value added tax / sales tax, returns and gross of excise duty, if any.

ii) Interest income is recognized on time proportionate basis taking into account the amount outstanding and the rate applicable and is stated at gross.

(k) Depreciation Depreciation is provided on a straight-line basis at the per annum rates (with the corresponding useful life) specified below :

Assets costing less than Rs. 5,000/- per unit are depreciated at the rate of 100%. Depreciation on additions is provided on prorata basis from the date of such additions. Similarly, depreciation on assets sold/disposed off during the year is provided up to the date on which such assets are sold/disposed off. Leasehold improvements represent renovation in new shops opened.

The difference between depreciation calculated and provided on the revalued amount of fixed assets and depreciation calculated on the original cost of fixed assets is recouped from Revaluation Reserve.

(l) Lease Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased assets are classified as operating leases. Operating lease payments are recognized as an expense in the Statement of Profit & Loss on a straight-line basis over the lease term.

(m) Foreign currency transactions

Foreign currency transactions are recorded 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 the transaction.

Foreign currency monetary items are reported using the closing rate. Non-monetary items, which are carried in terms of historical cost denominated in a foreign currency, are reported using the exchange rate at the date of the transaction.

Exchange differences arising on the settlement of monetary items or on reporting company''s monetary items at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognised as income or as expenses in the year in which they arise.

(n) Employees Benefits

Short Term Employee Benefit is recognized as an expense in the Statement of Profit and Loss of the year in which related service is rendered. Post employment and other Long Term Employee Benefits are provided in the Accounts in the following manner:

i) Gratuity: Maintained as a defined benefit retirement plan and contribution is made to the Life Insurance Corporation of India, as per the Company''s Scheme. Provision / write back, if any is made on the basis of the present value of the liability as at the Balance Sheet date determined by actuarial valuation following projected Unit Credit Method and is treated as liability.

ii) Leave Encashment: As per independent actuarial valuation as at the Balance Sheet date following projected Unit Credit Method in accordance with the requirements of Accounting Standard AS-15 on ''Employee Benefit'' is included in provisions.

iii) Provident Fund: Liability on account of Provident Fund (Pension) for employees is a defined contribution wherever contributions are made to a fund administered by Government Provident Fund Authority.

For employees, Provident Fund administered by a Recognised Trust, is a Defined Benefit Plan (DBP) wherein the employee and the Company make monthly contributions. Pending the issuance of Guidance Note from the Actuarial Society of India, actuarial valuation is not carried out and the Company provides for required liability at year end, in respect of the shortfall, if any, upon confirmation from the Trustees of such fund.

(o) Research and development

Research and development expenses of revenue nature are charged to the Statement of Profit & Loss in the year in which they are incurred.

(p) Taxes on Income

Income Tax is accounted for in accordance with Accounting Standard on "Accounting for Taxes on Income” notified pursuant to the Companies (Accounting Standards) Rules, 2006.

Minimum Alternate Tax (MAT) is accounted for in accordance with tax laws which give rise to future economic benefits in the form of tax credits against which future income tax liability is adjusted and is recognized as an asset in the Balance Sheet.

Deferred Tax is provided and recognized on timing differences between taxable income and accounting income subject to prudential consideration. Deferred Tax Asset on unabsorbed depreciation and carry forward of losses are recognized when there is virtual certainty about availability of future taxable income to realize such assets.

(q) Provisions, Contingent Liabilities & Contingent

Assets

Provisions are recognized when there is a present legal or statutory obligation as a result of past events and where it is probable that there will be outflow of resources to settle the obligation and when a reliable estimate of the amount of the obligation can be made.

Contingent Liabilities are recognized only when there is a possible obligation arising from past events due to occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or where any present obligation cannot be measured in terms of future outflow of resources or where a reliable estimate of the obligation cannot be made. Obligations are assessed on an ongoing basis and only those having a largely probable outflow or resources are provided for.

Contingent Assets are not recognized in the Financial Statements.

(r) Earnings per share

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

(s) Events after the Balance Sheet date

Events occurring after the date of the Balance Sheet which affect the financial position to a material extent are taken into cognizance.


Jun 30, 2010

1. Basis of Preparation

i) The financial statements have been prepared to comply in all material aspects in respect with the Notified Accounting Standard by Companies Accounting Standards Rules, 2006 and the relevant provisions of the Companies Act, 1956.

ii) Financial statements are based on historical cost and are prepared on accrual basis, except where impairment is made and revaluation is carried out.

iii) Accounting policies have been consistently applied by the Company and are consistent with those used in the previous year.

iv) The Company has prepared the financial statements on a going concern basis, i.e. the Company will be able to realize all its assets at their carrying values as at 30 June 2010 and discharge all its liabilities as at 30 June 2010 in the normal course of business.

2. Use of Estimates

The preparation of the financial statements in conformity with generally accepted accounting principles requires the management to make estimates and assumptions that affect the reporting balances of assets and liabilities and disclosures relating to contingent liabilities as at the date of the financial statements and reporting amounts of income and expenses during the year. Contingencies are recorded when it is probable that a liability will be incurred, and the amount can be reasonably estimated. Actual results could differ from such estimates. Any revision to accounting estimates is recognised prospectively in the current and future periods.

3. Tangible Fixed Assets

Fixed Assets are stated at cost of acquisition including taxes, duties, freight and other incidental expenses related to acquisition, construction and installation. Borrowing costs that are directly attributable to acquisition, construction or production of a qualifying asset are capitalized.

4. Intangible Assets

Intangible assets are stated at cost of acquisition less accumulated depreciation. Computer Software is amortised over a period of thirty six months. Amortisation is done on the straight line method.

5. Impairment

The carrying amounts of assets are reviewed at each balance sheet date to determine if there is any indication of impairment based on internal/external factors. An impairment loss is recognized if the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the assets net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value at the weighted average cost of capital.

6. Investments

Long term investments are stated at cost. Provision for diminution in value, other than temporary, is made in the accounts. Earnings on investments are accounted for when the right to receive payment is established.

7. Inventories

Cost of inventories have been computed to include all costs of purchases, cost of conversion and other costs incurred in bringing the inventories to their present location and condition.

Inventories are valued at lower of cost or net realisable value, as certified by the management, on the basis of physical verification carried out by the management. Cost is arrived at on a FIFO basis and includes appropriate portion of allocable overheads. Net realizable value is the estimated selling price in ordinary course of business, less estimated cost necessary to make the sale. Raw Materials are valued at cost (FIFO basis). Goods in transit is valued at cost.

8. Warranties

Product warranty costs are determined using reasonable estimates based on costs incurred in the past and are provided for in the year sale is made. Contractual obligations in respect of warranties and free replacement are accrued at 1% of sales to cover future costs. Cost of material includes free replacement against warranty.

9. Revenue recognition

i) Revenue is recognized to the extent that it is probable that the economic benefits will flow to the company and the

revenue can be reliably measured. Revenue from sale of goods is recognized when all significant risk and rewards of the ownership are transferred to the buyer as per the terms of sales which coincides with the despatch of the goods. Revenue is recorded net of sales tax, returns and gross of excise duty, if any.

ii) Interest income is recognized on time proportionate basis taking into account the amount outstanding and the rate applicable.

11. Lease

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased assets are classified as operating leases. Operating lease payments are recognized as an expense in the profit & loss account on a straight-line basis over the lease term.

12. Foreign currency transactions

Foreign currency transactions are recorded 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 the transaction.

Foreign currency monetary items are reported using the closing rate. Non-monetary items, which are carried in terms of historical cost denominated in a foreign currency, are reported using the exchange rate at the date of the transaction.

Exchange differences arising on the settlement of monetary items or on reporting companys monetary items at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognised as income or as expenses in the year in which they arise.

13. Employees Benefits

Defined Contribution Plans

Companys contribution paid /payable during the year to ESIC and Provident Fund are recognized in the Profit & Loss Account. The Provident Fund Contributions are made to employer established Provident Fund. ESIC contributions are made to Government administered ESIC fund. The Company also makes contribution towards superannuation and is required to contribute a specified percentage of payroll cost to fund the benefits.

Defined Benefit Plans

Company provides retirement benefits in the form of gratuity (funded) and leave encashment (unfunded) which are measured using the Projected unit credit method with actuarial valuation being carried out at each valuation date. Contribution for Gratuity is made to Life Insurance Corporation of India as per Companys Scheme. Provision / write back, if any is made on the basis of the present value of liability as at the Balance Sheet date determined by an actuarial valuation. Termination benefits are recognized as an expense as and when incurred. Short term compensated absences are provided based on past experience of leave availed. Actuarial gains / losses are immediately taken to Profit & Loss Account and are not deferred.

14. Research and development

Research and development expenses of revenue nature are charged to the Profit & Loss Account in the year in which they are incurred.

15. Export benefits

Export entitlements under the Duty Entitlement Pass Book (DEPB) scheme are recognized in the profit and loss account when the right to receive credit as per the terms of the scheme is established in respect of the exports made.

16. Taxes on Income

Tax expenses comprises current tax, deferred tax and fringe benefit tax after taking into consideration benefits available under the provisions of Income tax Act, 1961.

The deferred tax charged or credit is recognised using current tax rates. Where there is unabsorbed depreciation or carried forward losses, deferred tax assets are recognised only if there is virtual certainty of realisation of such assets. Other deferred tax assets are recognised only to the extent there is a reasonable certainty of realisation in future. Deferred tax assets / liabilities are reviewed at each balance sheet date based on developments during the year and available case laws, to re-asses realisation /liabilities.

17. Provisions, Contingent Liabilities & Contingent Assets

Contingent liabilities are disclosed after a careful evaluation of the facts and legal aspects of the matter involved, in line with the provisions of Accounting Standard (AS) 29. Provisions are recognized when the Company has a legal / constructive obligation and on management judgement as a result of a past event, for which it is probable that a cash outflow may be required and a reliable estimate can be made of the amount of the obligation. Contingent Assets are neither recognized nor disclosed.

18. Earnings per share

Earning per share are calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year.

19. Events after the Balance Sheet date

Events occurring after the date of the Balance Sheet which affect the financial position to a material extent are taken into cognizance except to the extent stated in Notes to the Accounts.

 
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