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Accounting Policies of Skipper Ltd. Company

Mar 31, 2015

A) Accounting Convention

These financial statements are prepared in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention. GAAP comprises mandatory accounting standards as prescribed under section 133 of the Companies Act, 2013 (Act'') read with Rule 7 of the Companies (Accounts) Rules, 2014, the provisions of the Act (to the extent notified) and guidelines issued by the Securities and Exchange Board of India (SEBI). Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.

All the items of Income and Expenditure have been recognized on accrual basis except Insurance claim which is recognized only when it is reasonably ascertained that the ultimate collection will be made.

B) Revenue Recognition (i) Sale of Goods

Revenue from sale of goods is recognized on passage of title thereof to the customers, which generally coincides with delivery. Sales are net of returns, claims, trade discounts etc. Revenue is recognized when the significant risks and rewards of ownership of goods have been transferred to the buyer as per the terms of the respective sales order.

(ii) Revenue from construction project related activity is recognised as follows:

(a) Cost-plus contracts: Contract revenue is determined by adding the aggregate cost plus proportionate margin as agreed with the customer.

(b) Revenue on construction contracts is recognized on percentage completion method based on the stage of completion of the contract. The stage of completion is determined as a proportion that contract costs incurred for work performed upto the reporting date bears to the estimated total costs. When it is probable that the total contract cost will exceed the total contract revenue, the expected loss is recognized immediately. For this purpose, total contract costs are ascertained on the basis of actual costs incurred and costs to be incurred for completion of contracts in progress, which is arrived at by the management based on current technical data, forecasts and estimate of expenditure to be incurred in future including contingencies. Revisions in projected profit or loss arising from change in estimates are reflected in each accounting period which, however, cannot be disclosed separately in the financial statements as the effect thereof cannot be accurately determined.

Overhead expenses representing indirect costs that cannot be directly aligned with the jobs, are distributed over the various contracts on a pro-rata basis.

(c) Cost and earnings in excess of billings are classified as unbilled revenue while billing in excess of cost and earnings is classified as unearned revenue.

C) Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles require management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent liabilities at the date of financial statements and the result of operations during the reporting period end. Although these estimates are based upon management''s best knowledge of current events and actions, actual results could differ from these estimates.

D) Fixed Assets

(i) Fixed assets are stated at original cost or revalued amount, as the case may be, less accumulated depreciation, accumulated amortization and cumulative impairment, if any. Cost comprises of cost of acquisition or construction inclusive of duties (net of tax/cenvat/duties credits availed), incidental expenses, interest and erection/ commissioning expenses incurred up to the date asset is put to use. Administrative and other general overhead expenses that are specifically attributable to construction or acquisition of fixed assets or bringing the fixed assets to working condition are allocated and capitalized as a part of cost of fixed assets. Own manufactured assets are capitalized at cost including an appropriate share of overheads.

(ii) Intangible assets are stated at cost less accumulated amortization and impairment loss, if any. Cost includes any directly attributable expenditure on making the asset ready for its intended use.

(iii) Capital Work-in-progress are stated at cost including borrowing cost and related expenses incurred during construction to bring the assets to its working condition for the intended use.

E) Depreciation/Amortization

(i) Depreciation on tangible fixed assets is provided on the straight-line method over the useful lives of assets. Depreciation for assets purchased / sold during the year is proportionately charged. Depreciation in change in the value of fixed assets due to exchange rate fluctuation has been provided prospectively over the residual life of the respective assets. Depreciation is provided based on useful life of assets as prescribed in Schedule II of the Companies Act, 2013.

(ii) Intangible assets, comprising of computer software, are amortized over a period of five years.

F) Impairment of Assets

The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal/external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. Reversal of impairment losses recognized in prior years is recorded when there is an indication that the impairment losses recognized for the assets no longer exist or have decreased.

G) Investments

(i) Long Term investments are stated at cost less provisions, if any for diminution in value, which are considered to be other than temporary in nature.

(ii) Current Investments are stated at lower of cost or fair value.

H) Inventories

(i) Raw Material, store and spare parts are valued at lower of cost or net realizable value; cost is ascertained as per weighted average method and includes incidental expenses. 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 are consumed are expected to be sold at above cost.

(ii) Inventories of Finished Goods and Work in process are valued at lower of cost or net realizable value whichever, is lower. Cost is determined at weighted average method.

(iii) Scrap is valued at net realizable value.

I) Borrowing Costs

Borrowing costs incurred in relation to the acquisition of assets are capitalised as part of the cost of such assets up to the date of such assets are ready for intended use. Other borrowing costs are charged as an expense in the year in which such are incurred.

J) Government Grants

(i) Grants are accounted for where it is reasonably certain that the ultimate collection will be made.

(ii) Grants directly related to fixed assets are shown as deduction from the gross value of the fixed assets and those of capital nature are credited to Capital Reserve.

(iii) Other Government grants are credited to the Statement of Profit and Loss or deducted from the related expenses.

K) Taxation

Current tax is determined on the basis of the amount of income tax payable under the Income Tax Act, 1961. Deferred tax is recognized on timing differences being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax asset is recognized and carried forward only to the extent that there is a reasonable certainty that the assets will be realized in future.

MAT Credit is recognized as an asset only when and to the extent there is convincing evidence that the Company will pay normal Income Tax during the specified period. In the year in which the Minimum Alternative Tax (MAT) credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in guidance note issued by the ICAI, the said asset is created by way of credit to Statement of Profit and Loss and shown as MAT credit entitlement. The Company reviews the same at each Balance Sheet date and writes down the carrying amount of MAT entitlement to the extent there is no longer convincing evidence to the effect that Company will pay normal Income Tax during the specified period.

L) Foreign Currency Transactions

Foreign currency transactions are recorded on initial recognition in Indian Rupees, using the exchange rate at the date of transaction. At each Balance Sheet date, monetary items denominated in foreign currency are reported using the closing rate. Non-monetary items which are carried at historical cost denominated in foreign currency are reported using the exchange rate at the date of the transaction.the premium or discount arising at the inception of forward exchange contracts is amortised as expenses or income over the life of the respective contracts. Exchange differences that arise on settlement of monetary items and items denominated in foreign currencies at the year end are restated at year end rates and is:

(i) adjusted to the cost of fixed assets specifically financed by the borrowings to which the exchange differences relate.

(ii) recognized as income or expense in the period in which they arise in other cases.

M) Derivatives Financial Instruments

The Company uses derivative financial instruments such as forward, swap, options etc. to hedge its risk associated with the foreign exchange fluctuation related to highly probable forecast sale. The realized gain / loss in respect of hedged foreign exchange contracts which has expired / unwinded during the year are recognized in the statement of profit and loss and included in other operating revenue / other expense as the case may be. However, in respect of foreign exchange forward contracts period of which extends beyond the balance sheet date, the fair value of outstanding derivative contracts is marked to market and resultant net loss is accounted in the statement of profit and loss. Mark to market net gain is not recognized.

N) Fixed Assets Acquired Under Lease (i) Finance Lease

Assets acquired under lease agreements which effectively transfer to the Company substantially all the risk and benefits incidental to ownership of leased items, are capitalized at the lower of fair value and present value of minimum lease payment at the inception of lease term and disclosed as leased assets. Lease payments are apportioned between the finance charges and the reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of their liability. Finance charges are charged directly to the expenses account.

(ii) Operating Lease

Leases where the lessor effectively retains substantially all the risks and benefits of the ownership of the lease assets are classified as operating leases. Operating lease payments are recognized as an expense in the profit and loss account.

O) Retirement and Other Employment Benefits

(i) Short term employee benefits which are wholly due within 12 months of rendering the service are recognized in the period in which the employee rendered the related services.

(ii) The Company has defined contribution plans for employees comprising of Government administered Employees State Insurance and Pension Plans. The contributions are charged to the Statement of Profit and Loss as they fall due.

(iii) Gratuity liability is a defined benefit obligation. The Company makes contribution to the Employee''s Group Gratuity-cum-Life Assurance Scheme of the Life Insurance Corporation of India. The net present value of the obligation for gratuity benefits as determined on actuarial valuation conducted annually using the projected unit credit method and as reduced by the fair value of plan assets, is recognized in the accounts.

(iv) Actuarial gains or losses are recognized in full in the Statement of Profit and Loss for the period in which they occur.

(v) Short term compensated advances are provided for on estimates. The Company has no scheme for long term compensated advances.

P) 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 are divided with the weighted average number of shares outstanding during the year after adjustment for the effects of all dilutive potential equity shares.

Q) Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and there is probable outflow of resources. Contingent Liabilities, where possibility of outflow is remote, are not provided for in accounts and amounts of material nature are disclosed byway of notes. Contingent assets are neither recognised nor disclosed in the financial statements.


Mar 31, 2014

A) ACCOUNTING POLICIES

The accounts are prepared in accordance with accounting principles generally accepted in India and as per provisions of the Companies Act, 1956.

B) REVENUE RECOGNITION

(i) All expenses and income to the extent considered payable and receivable respectively unless specifically stated to be otherwise are accounted for on mercantile basis.

(ii) Revenue from project-related activity is recognised as follows:

(a) Cost-plus contracts: Contract revenue is determined by adding the aggregate cost plus proportionate margin as agreed with the customer;

(b) Fixed price contracts: Contract revenue is recognised by adding the aggregate cost and proportionate margin using the percentage completion method. Percentage of completion is determined as a proportion of cost-incurred-to- date to the total estimated contract cost.

(c) Cost and earnings in excess of billings are classified as unbilled revenue while billing in excess of cost and earnings is classified as unearned revenue.

(d) Full provision is made for any loss in the year in which it is foreseen.

(iii) Revenue in respect of claims of insurance is recognised only when it is reasonably ascertained that the ultimate collection will be made.

C) USE OF ESTIMATES

The preparation of financial statements in conformity with generally accepted accounting principles require management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent liabilities at the date of financial statements and the result of operations during the reporting period end. Although these estimates are based upon management''s best knowledge of current events and actions, actual results could differ from these estimates.

D) FIXED ASSETS

Fixed assets are stated at original cost or revalued amount, as the case may be, less accumulated depreciation, accumulated amortisation and cumulative impairment, if any.

Cost comprises of cost of acquisition or construction inclusive of duties (net of tax/cenvat/ duties credits availed), incidental expenses and erection/commissioning expenses incurred up to the date asset is put to use. Administrative and other general overhead expenses that are specifically attributable to construction or acquisition of fixed assets or bringing the fixed assets to working condition are allocated and capitalised as a part of cost of fixed assets.

Own manufactured assets are capitalised at cost including an appropriate share of overheads.

E) DEPRECIATION/AMORTISATION

(i) Depreciation on Fixed Assets is provided for on straight line method in the manner and at the rates specified in schedule XIV of the Companies Act, 1956.

(ii) Intangible assets, comprising of computer software, are amortised over a period of five years.

F) IMPAIRMENT OF ASSETS

The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal/external factors. An impairment loss is recognised wherever the carrying amount of an asset exceeds its recoverable amount. The impairment loss recognised in the prior accounting periods is reversed if there has been change in the estimate of recoverable amount. After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.

G) INVESTMENTS

Investments are stated at cost. A provision for diminution in the value of Long Term Investments is made only if such decline is other than temporary in the opinion of the management.

H) INVENTORIES

(i) Raw Material, store and spare parts are valued at lower of cost or net realisable value; cost is ascertained as per Moving Average method and includes incidental expenses. 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 are consumed are expected to be sold at above cost.

(ii) Work in process is valued at lower of cost or net realisable value.

(iii) Finished goods are valued at lower of cost or net realisable value.

(iv) Scrap and wastage valued at net realisable value.

I) BORROWING COSTS

Borrowing costs incurred in relation to the acquisition of assets are capitalised as part of the cost of such assets up to the date of such assets are ready for intended use. Other borrowing costs are charged as an expense in the year in which such are incurred.

J) GOVERNMENT GRANTS

(i) Grants are accounted for where it is reasonably certain that the ultimate collection will be made.

(ii) Grants directly related to fixed assets are shown as deduction from the gross value of the fixed assets and those of capital nature are credited to Capital Reserve.

(iii) Other Government grants are credited to the Statement of Profit and Loss or deducted from the related expenses.

K) TAXATION

Current tax is determined on the basis of the amount of income tax payable under the Income Tax Act, 1961. Deferred tax is recognised on timing differences being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax asset is recognised and carried forward only to the extent that there is a reasonable certainty that the assets will be realised in future.

L) FOREIGN CURRENCIES

Foreign currency transactions are recorded on initial recognition in Indian Rupees, using the exchange rate at the date of transaction.

At each Balance Sheet date, foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried at historical cost denominated in foreign currency are reported using the exchange rate at the date of the transaction. Exchange differences that arise on settlement of monetary items or on reporting at each Balance Sheet date of the Company''s monetary items at the closing rate are:

(i) adjusted in the cost of fixed assets specifically financed by the borrowings to which the exchange differences relate.

(ii) recognised as income or expense in the period in which they arise in other cases.

M) FIXED ASSETS ACQUIRED UNDER LEASE

(i) Finance Lease

Assets acquired under lease agreements which effectively transfer to the Company substantially all the risk and benefits incidental to ownership of leased items, are capitalised at the lower of fair value and present value of minimum lease payment at the inception of lease term and disclosed as leased assets. Lease payments are apportioned between the finance charges and the reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of their liability. Finance charges are charged directly to the expenses account.

(ii) Operating Lease

Leases where the lessor effectively retains substantially all the risks and benefits of the ownership of the lease assets are classified as operating leases. Operating lease payments are recognised as an expense in the profit and loss account.

N) RETIREMENT AND OTHER EMPLOYMENT BENEFITS

(i) Short term employee benefits which are wholly due within 12 months of rendering the service are recognised in the period in which the employee rendered the related services.

(ii) The Company has defined contribution plans for employees comprising of Government administered Employees State Insurance and Pension Plans. The contributions are charged to the Statement of Profit and Loss as they fall due.

(iii) Gratuity liability is a defined benefit obligation. The Company makes contribution to the Employee''s Group Gratuity-cum-Life Assurance Scheme of the Life Insurance Corporation of India. The net present value of the obligation for gratuity benefits as determined on actuarial valuation conducted annually using the projected unit credit method, as adjusted for unrecognised past service cost, if any, and as reduced by the fair value of plan assets, is recognised in the accounts.

Actuarial gains or losses are recognised in full in the Statement of Profit and Loss for the period in which they occur.

(iv) Short term compensated advances are provided for on estimates. The Company has no scheme for long term compensated advances.

O) PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events an there will be outflow of resources. Contingent Liabilities are not provided for in accounts and amounts of material nature are disclosed by way of notes. Contingent assets are neither recognised nor disclosed in the financial statements.


Mar 31, 2013

A) ACCOUNTING POLICIES

The accounts are prepared in accordance with accounting principles generally accepted in India and as per provisions of the Companies Act, 1956.

B) REVENUE RECOGNITION

(i) All expenses and income to the extent considered payable and receivable respectively unless specifically stated to be otherwise are accounted for on mercantile basis.

(ii) Revenue from project-related activity is recognised as follows:

(a) Cost-plus contracts: Contract revenue is determined by adding the aggregate cost plus proportionate margin as agreed with the customer;

(b) Fixed price contracts: Contract revenue is recognised by adding the aggregate cost and proportionate margin using the percentage completion method. Percentage of completion is determined as a proportion of cost-incurred-to-date to the total estimated contract cost.

(c) Cost and earnings in excess of billings are classified as unbilled revenue while billing in excess of cost and earnings is classified as unearned revenue.

(d) Full provision is made for any loss in the year in which it is foreseen.

(iii) Revenue in respect of claims of insurance is recognized only when it is reasonably ascertained that the ultimate collection will be made.

C) USE OF ESTIMATES

The preparation of financial statements in conformity with generally accepted accounting principles require management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent liabilities at the date of financial statements and the result of operations during the reporting period end. Although these estimates are based upon management''s best knowledge of current events and actions, actual results could differ from these estimates.

D) FIXED ASSETS

Fixed assets are stated at original cost or revalued amount, as the case may be, less accumulated depreciation, accumulated amortization and cumulative impairment, if any.

Cost comprises of cost of acquisition or construction inclusive of duties (net of tax/cenvat/duties credits availed), incidental expenses and erection / commissioning expenses incurred up to the date asset is put to use. Administrative and other general overhead expenses that are specifically attributable to construction or acquisition of fixed assets or bringing the fixed assets to working condition are allocated and capitalized as a part of cost of fixed assets.

Own manufactured assets are capitalized at cost including an appropriate share of overheads.

E) DEPRECIATION/AMORTIZATION

(i) Depreciation on Fixed Assets is provided for on straight line method in the manner and at the rates specified in schedule XIV of the Companies Act, 1956.

(ii) Intangible assets, comprising of computer software, are amortized over a period of five years.

F) IMPAIRMENT OF ASSETS

The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal/external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The impairment loss recognized in the prior accounting periods is reversed if there has been change in the estimate of recoverable amount. After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.

G) INVESTMENTS

Investments are stated at cost. A provision for diminution in the value of Long Term Investments is made only if such decline is other than temporary in the opinion of the management.

H) INVENTORIES

(i) Raw Material, store and spare parts are valued at lower of cost or net realizable value; cost is ascertained as per Moving Average method and includes incidental expenses. 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 are consumed are expected to be sold at above cost.

(ii) Work in process is valued at lower of cost or net realizable value.

(iii) Finished goods are valued at lower of cost or net realizable value.

(iv) Scrap and wastage valued at net realizable value.

I) BORROWING COSTS

Borrowing costs incurred in relation to the acquisition of assets are capitalised as part of the cost of such assets up to the date of such assets are ready for intended use. Other borrowing costs are charged as an expense in the year in which such are incurred.

I J) GOVERNMENT GRANTS

(i) Grants are accounted for where it is reasonably certain that the ultimate collection will be made.

(ii) Grants directly related to fixed assets are shown as deduction from the gross value of the fixed assets and those of capital nature are credited to Capital Reserve.

(iii) Other Government grants are credited to the Statement of Profit and Loss or deducted from the related expenses.

K) TAXATION

Current tax is determined on the basis of the amount of income tax payable under the Income Tax Act, 1961. Deferred tax is recognized on timing differences being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax asset is recognized and carried forward only to the extent that there is a reasonable certainty that the assets will be realized in future.

L) FOREIGN CURRENCIES

Foreign currency transactions are recorded on initial recognition in Indian Rupees, using the exchange rate at the date of transaction. At each Balance Sheet date, foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried at historical cost denominated in foreign currency are reported using the exchange rate at the date of the transaction. Exchange differences that arise on settlement of monetary items or on reporting at each Balance Sheet date of the Company''s monetary items at the closing rate are:

(i) adjusted in the cost of fixed assets specifically financed by the borrowings to which the exchange differences relate.

(ii) recognized as income or expense in the period in which they arise in other cases.

M) FIXED ASSETS ACQUIRED UNDER LEASE

(i) Finance Lease

Assets acquired under lease agreements which effectively transfer to the Company substantially all the risk and benefits incidental to ownership of leased items, are capitalized at the lower of fair value and present value of minimum lease payment at the inception of lease term and disclosed as leased assets. Lease payments are apportioned between the finance charges and the reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of their liability. Finance charges are charged directly to the expenses account.

(ii) Operating Lease

Leases where the lessor effectively retains substantially all the risks and benefits of the ownership of the lease assets are classified as operating leases. Operating lease payments are recognized as an expense in the profit and loss account.

N) RETIREMENT AND OTHER EMPLOYMENT

BENEFITS

(i) Short term employee benefits which are wholly due within 12 months of rendering the service are recognized in the period in which the employee rendered the related services.

(ii) The Company has defined contribution plans for employees comprising of Government administered Employees State Insurance and Pension Plans. The contributions are charged to the Statement of Profit and Loss as they fall due.

(iii) Gratuity liability is a defined benefit obligation. The Company makes contribution to the Employee''s Group Gratuity-cum-Life Assurance Scheme of the Life Insurance Corporation of India. The net present value of the obligation for gratuity benefits as determined on actuarial valuation conducted annually using the projected unit credit method, as adjusted for unrecognized past service cost, if any, and as reduced by the fair value of plan assets, is recognized in the accounts. Actuarial gains or losses are recognized in full in the Statement of Profit and Loss for the period in which they occur.

(iv) Short term compensated advances are provided for on estimates. The Company has no scheme for long term compensated advances.

O) PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events an there will be outflow of resources. Contingent Liabilities are not provided for in accounts and amounts of material nature are disclosed by way of notes. Contingent assets are neither recognised nor disclosed in the financial statements.

Secured Loans are covered as follows:

1. Term Loans /FCNRB Term Loans of Rs. 120,121,931 (Previous Year Rs. 162,440,986) including current maturities and Buyers Credit of Rs. 25,129,923 (Previous year Rs. 10,269,407) are secured by first charge on fixed assets ofJangalpur,Howrah Unit of the company.

2. Term Loans /FCNRB Term Loans of Rs. 1,173,393,296 (Previous Year Rs. l,099,753,128) including current maturities are secured by first charge on fixed assets of Uluberia, Howrah Unit of the Company.

3. Term Loans are also secured by personal guarantees of some of the executive directors of the Company.

4. Repayment Terms of Outstanding borrowings as on 31st March, 2013

* The repayment will start from June 2014

5 Hire Purchase Loans including current maturities are secured against hypothecation of respective fixed assets financed and are payable in equal monthly instalments over the term of the respective loan. The present outstanding loan is repayble by February 2018.


Mar 31, 2012

A) ACCOUNTING POLICIES

The accounts are prepared in accordance with accounting principles generally accepted in India and as per provisions of the Companies Act, 1956.

B) REVENUE RECOGNITION

(i) All expenses and income to the extent considered payable and receivable respectively unless specifically stated to be otherwise are accounted for on mercantile basis.

(ii) Revenue from project-related activity is recognised as follows:

(a) Cost-plus contracts: Contract revenue is determined by adding the aggregate cost plus proportionate margin as agreed with the customer;

(b) Fixed price contracts: Contract revenue is recognised by adding the aggregate cost and proportionate margin using the percentage completion method. Percentage of completion is determined as a proportion of cost-incurred-to-date to the total estimated contract cost.

(c) Cost and earnings in excess of billings are classified as unbilled revenue while billing in excess of cost and earnings is classified as unearned revenue.

(d) Full provision is made for any loss in the year in which it is foreseen.

(iii) Revenue in respect of claims of insurance is recognized only when it is reasonably ascertained that the ultimate collection will be made.

C) USE OF ESTIMATES

The preparation of financial statements in conformity with generally accepted accounting principles require management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent liabilities at the date of financial statements and the result of operations during the reporting period end. Although these estimates are based upon management''s best knowledge of current events and actions, actual results could differ from these estimates.

D) FIXED ASSETS

Fixed assets are stated at original cost or revalued amount, as the case may be, less accumulated depreciation, accumulated amortization and cumulative impairment, ifany.

Cost comprises of cost of acquisition or construction inclusive of duties (net of tax/cenvat/duties credits availed), incidental expenses and erection/commissioning expenses incurred up to the date asset is put to use. Administrative and other general overhead expenses that are specifically attributable to construction or acquisition of fixed assets or bringing the fixed assets to working condition are allocated and capitalized as a part of cost of fixed assets.

Own manufactured assets are capitalized at cost including an appropriate share of overheads.

E) DEPRECIATION/AMORTIZATION

(i) Depreciation on Fixed Assets is provided for on straight line method in the manner and at the rates specified in schedule XIV of the Companies Act, 1956.

(ii) Intangible assets, comprising of computer software, are amortized over a period of five years.

F) IMPAIRMENT OF ASSETS

The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal/external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The impairment loss recognized in the prior accounting periods is reversed if there has been change in the estimate of recoverable amount. After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.

G) INVESTMENTS

Investments are stated at cost. A provision for diminution in the value of Long Term Investments is made only if such decline is other than temporary in the opinion of the management.

H) INVENTORIES

(i) Raw Material, store and spare parts are valued at lower of cost or net realizable value; Cost is ascertained as per Moving Average method and includes incidental expenses. 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 are consumed are expected to be sold at above cost.

(ii) Work in process is valued at lower of cost or net realizable value.

(iii) Finished goods are valued at lower of cost or net realizable value.

(iv) Scrap and wastage valued at net realizable value.

I) BORROWING COSTS

Borrowing costs incurred in relation to the acquisition of assets are capitalised as part of the cost of such assets up to the date of such assets are ready for intended use. Other borrowing costs are charged as an expense in the year in which such are incurred.

J) GOVERNMENT GRANTS

(i) Grants are accounted for where it is reasonably certain that the ultimate collection will be made.

(ii) Grants directly related to fixed assets are shown as deduction from the gross value of the fixed assets and those of capital nature are credited to Capital Reserve.

(iii) Other Government grants are credited to the Profit and Loss Account or deducted from the related expenses.

K) TAXATION

Current tax is determined on the basis of the amount of income tax payable under the Income Tax Act, 1961. Deferred tax is recognized on timing differences being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax asset is recognized and carried forward only to the extent that there is a reasonable certainty that the assets will be realized in future.

L) FOREIGN CURRENCIES

Foreign currency transactions are recorded on initial recognition in Indian Rupees, using the exchange rate at the date of transaction. At each Balance Sheet date, foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried at historical cost denominated in foreign currency are reported using

the exchange rate at the date of the transaction. Exchange differences that arise on settlement of monetary items or on reporting at each Balance Sheet date of the Company''s monetary items at the closing rate are:

(i) adjusted in the cost of fixed assets specifically financed by the borrowings to which the exchange differences relate.

(ii) recognized as income or expense in the period in which they arise in other cases.

M) FIXED ASSETS ACQUIRED UNDER LEASE

(i) Finance Lease

Assets required under lease agreements which effectively transfer to the Company substantially all the risk and benefits incidental to ownership of leased items, are capitalized at the lower of fair value and present value of minimum lease payment at the inception of lease term and disclosed as leased assets. Lease payments are apportioned between the finance charges and the reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of their liability. Finance charges are charged directly to the expenses account.

(ii) Operating Lease

Leases where the lessor effectively retains substantially all the risks and benefits of the ownership of the lease assets are classified as operating leases. Operating lease payments are recognized as an expense in the profit and loss account.

N) RETIREMENT AND OTHER EMPLOYMENT BENEFITS

(i) Short term employee benefits which are wholly due within 12 months of rendering the service are recognized in the period in which the employee rendered the related services.

(ii) The Company has defined contribution plans for employees comprising of Government administered Employees State Insurance and Pension Plans. The contributions are charged to the Profit and Loss Account as they fall due.

(iii) Gratuity liability is a defined benefit obligation. The Company makes contribution to the Employee''s Group Gratuity- cum-Life Assurance Scheme ofthe Life Insurance Corporation of India. The net present value ofthe obligation for gratuity benefits as determined on actuarial valuation conducted annually using the projected unit credit method, as adjusted for unrecognized past service cost, if any, and as reduced by the fair value of plan assets, is recognized in the accounts. Actuarial gains or losses are recognized in full in the Profit and Loss Account for the period in which they occur.

(iv) Short term compensated advances are provided for on estimates. The Company has no Scheme for long term compensated advances.

O) PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events an there will be outflow of resources. Contingent Liabilities are not provided for in accounts and amounts of material nature are disclosed by way of notes. Contingent assets are neither recognised nor disclosed in the financial statements.

Secured Loans are covered

1. Term Loan /FCNRB Term Loan of Rs. 16,24,40,986 (Previous Year Rs. 22,04,63,229) including curent maturities and Buyers Credit ofRs. 1,84,67,193 (Previous yearRs. Nil) is secured by first charge on fixed assets ofJangalpur, Howrah Unit of the company.

2. Term Loan/FCNRB Term Loan of Rs. 1,09,97,53,128 (Previous Year Rs. 84,61,41,451) including current maturities is secured by first charge on fixed assets of Uluberia, Howrah Unit of the Company.

3. Term Loan are also secured by personal guarantees of some of the directors of the Company

4. Repayment Terms of Outstanding borrowings as on 31st March, 2012

* Repayment will start from December, 2012

5. Hire Purchase Loans including current maturities are secured against hypothecation of respective fixed assets financed and are payable in equal monthly instalments over the term of the respective loan. The present outstanding loan is repayble by January 2015.

1 Working Capital Facilities and Buyers Credit of Rs. 7,12,93,285 ( Previous year Rs. 53,83,88,597) are secured by first charge on current assets and second charge on fixed assets of Jangalpur and Uluberia Units of the company.

2 Working Capital Facilities are also secured by personal guarantees of some of the directors of the Company.

3 Buyers Credit of Rs. 1,02,69,407 ( Previous year Rs. 1,84,67,193) is secured by first charge on fixed assets of Jangalpur, Howrah Unit ofthe company.


Mar 31, 2011

A) ACCOUNTING POLICIES

The accounts are prepared in accordance with accounting principles generally accepted in India and as per provisions of the CompaniesAct, 1956.

B) REVENUE RECOGNITION

(i) All expenses and income to the extent considered payable and receivable respectively unless specifically stated to be otherwise are accounted for on mercantile basis.

(ii) Revenue from project-related activity is recognised as follows:

(a) Cost-plus contracts: Contract revenue is determined by adding the aggregate cost plus proportionate margin as agreed with the customer;

(b) Fixed price contracts: Contract revenue is recognised by adding the aggregate cost and proportionate margin using the percentage completion method. Percentage of completion is determined as a proportion of cost- incurred-to-date to the total estimated contract cost.

(c) Cost and earnings in excess of billings are classified as unbilled revenue while billing in excess of cost and earnings is classified as unearned revenue.

(d) Full provision is made for any loss in the year in which it is foreseen.

(iii) Revenue in respect of claims of insurance is recognized only when it is reasonably ascertained that the ultimate collection will be made.

C) USE OF ESTIMATES

The preparation of financial statements in conformity with generally accepted accounting principles require management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent liabilities at the date of financial statements and the result of operations during the reporting period end. Although these estimates are based upon management''s best knowledge of current events and actions, actual results could differ from these

D) FIXED ASSET

Fixed assets are stated at original cost or revalued amount, as the case may be, less accumulated depreciation, accumulated amortization and cumulative impairment, ifany.

Cost comprises of cost of acquisition or construction inclusive of duties (net of tax/cenvat/duties credits availed), incidental expenses and erection/commissioning expenses incurred up to the date asset is put to use. Administrative and other general overhead expenses that are specifically attributable to construction or acquisition of fixed assets or bringing the fixed assets to working condition are allocated and capitalized as a part of cost of fixed assets.

Own manufactured assets are capitalized at cost including an appropriate share of overheads.

E) DEPRECIATION/AMORTIZATION

(i) Depreciation on Fixed Assets is provided for on straight line method in the manner and at the rates specified in schedule XIV of the Companies Act, 1956.

(ii) Intangible assets, comprising of computer software, are amortized over a period of five years.

F) IMPAIRMENT OF ASSETS

The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal/external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The impairment loss recognized in the prior accounting periods is reversed if there has been change in the estimate of recoverable amount. After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.

G) INVESTMENTS

Investments are stated at cost. A provision for diminution in the value of Long Term Investments is made only if such decline is other than temporary in the opinion of the management.

H) INVENTORIES

(i) Raw Material, store and spare parts are valued at lower of cost or net realizable value; Cost is ascertained as per First in First out method and includes incidental expenses. 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 consumed are expected to be sold at above cost.

(ii) Work in process is valued at lower of cost or net realizable value.

(iii) Finished goods are valued at lower of cost or net realizable value.

(iv) Scrap and wastage valued at net realizable value.

I) BORROWING COSTS

Borrowing costs incurred in relation to the acquisition of assets are capitalised as part of the cost of such assets up to the date of such assets are ready for intended use. Other borrowing costs are charged as an expense in the year in which such are incurred.

J) GOVERNMENT GRANTS

(i) Grants are accounted for where it is reasonably certain that the ultimate collection will be made.

(i) Grants directly related to fixed assets are shown as deduction from the gross value of the fixed assets and those of

capital nature are credited to Capital Reserve.

(i) Other Government grants are credited to the Profit and Loss Account or deducted from the related expenses.

K) TAXATION

Current tax is determined on the basis of the amount of income tax payable under the Income Tax Act, 1961. Deferred tax is recognized on timing differences being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax asset is recognized and carried forward only to the extent that there is a reasonable certainty that the assets will be realized in future.

L) FOREIGN CURRENCIES

Foreign currency transactions are recorded on initial recognition in Indian Rupees, using the exchange rate at the date of transaction. At each Balance Sheet date, foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried at historical cost denominated in foreign currency are reported using the exchange rate at the date of the transaction. Exchange differences that arise on settlement of monetary items or on reporting at each Balance Sheet date of the Company''s monetary items at the closing rate are:

(i) adjusted in the cost of fixed assets specifically financed by the borrowings to which the exchange differences relate.

(ii) recognized as income or expense in the period in which they arise in other cases.

M) FIXED ASSETS ACQUIRED UNDER LEASE

(i) Finance Lease

Assets required under lease agreements which effectively transfer to the Company substantially all the risk and benefits incidental to ownership of leased items, are capitalized at the lower of fair value and present value of minimum lease payment at the inception of lease term and disclosed as leased assets. Lease payments are apportioned between the finance charges and the reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of their liability. Finance charges are charged directly to the expenses account.

(ii) Operating Lease

Leases where the lessor effectively retains substantially all the risks and benefits of the ownership of the lease assets are classified as operating leases. Operating lease payments are recognized as an expense in the profit and loss account.

N) RETIREMENT AND OTHER EMPLOYMENT BENEFITS

(i) Short term employee benefits which are wholly due within 12 months of rendering the service are recognized in the period in which the employee rendered the related services.

(ii) The Company has defined contribution plans for employees comprising of Government administered Employees State Insurance and Pension Plans. The contributions are charged to the Profit and Loss Account as they fall due.

(iii) Gratuity liability is a defined benefit obligation. The Company makes contribution to the Employee''s Group Gratuity- cum-Life Assurance Scheme of the Life Insurance Corporation of India. The net present value of the obligation for gratuity benefits as determined on actuarial valuation conducted annually using the projected unit credit method, as adjusted for unrecognized past service cost, if any, and as reduced by the fair value of plan assets, is recognized in the accounts. Actuarial gains or losses are recognized in full in the Profit and Loss Account for the period in which they occui.

(iv) Short term compensated advances are provided for on estimates. The Company has no Scheme for long term compensated advances.

O) PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events an there will be outflow of resources. Contingent Liabilities are not provided for in accounts and amounts of material nature are disclosed by way of notes. Contingent assets are neither recognised nor disclosed in the financial statements.

 
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