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Accounting Policies of Solitaire Machine Tools Ltd. Company

Mar 31, 2015

A) System of Accounting:

i) The Company follows the mercantile system of accounting and recognises income and expenditure on accrual basis unless otherwise stated hereinafter.

ii) The accounts are prepared under historical cost convention, as a going concern and generally in accordance with applicable accounting standards.

iii) Use of Estimates:

The preparation of the financial statements in conformity with generally accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent liabilities on the date of financial statements and the reported amount of revenue and expenses during the reporting period. Actual results could differ from those estimates. Any revision to accounting estimates is recognised in the period in which such revisions are made.

b) Fixed Assets and Depreciation:

i) Fixed Assets are stated at their cost of acquisition less Depreciation. Additions to Fixed Assets are net of Modvat Credit.

ii) Depreciation on Fixed Assets is provided on Straight Line Method in accordance with Schedule II of the Companies Act, 2013.

c) Investments:

Long Term Investments are stated at cost. Current Investments are carried at the lower of cost and quoted/fair value. Provision for diminution in the value of long term investments is made only if such a decline is other than temporary in the opinion of management.

d) Valuation of Inventories:

i) Raw Materials - Components - Lower of the Cost or net realisable value

ii) Stores & Spares - Lower of the Cost or net realisable value

iii) Cutting Tools and - Lower of the Cost or net realisable Holding Tools value

iv) Semi Finished Goods - Lower of the Cost or net realisable value, calculated on percentage of work executed on contracted price.

v) Finished Goods - Lower of the Cost or net realisable

e) Foreign Exchange Transactions:

Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of transactions. Monetary items are translated at the year end rate. The differences between the rate prevailing on the date of transaction and on the date of settlement and also on translation at the end of the year are recognised as income or expenses, as the case may be for the year except in the case of Long Term Liabilities, where they relate to acquisition of fixed assets, in which case they are adjusted to the carrying cost of such assets.

f) Treatment of Retirement Benefits:

i) The Company's contribution to recognised provident fund, and Employees' state Insurance Scheme are defined contribution plans are charged to the Profit and Loss Account when incurred.

ii) The Company's employees are covered under the Employees Group Gratuity Cum Life Assurance Scheme of Life Insurance Corporation of India which is a defined benefit scheme. The Company account for gratuity liability equivalent to the premium amount payable to Life Insurance Corporation of India every year.

iii) Leave Encashment is accounted on cash basis.

g) Revenue Recognition:

a) Revenue is recognised on transfer of significant risk and reward in respect of ownership.

b) Gross sales is inclusive of sales tax, excise duty and service income and are net of incentives discounts and rebates.

c) Set-off Claims and other claims, are accounted for as and when admitted by the appropriate authorities.

d) Exchange Fluctuation and accrued interest on L. C. Margin and Bank Guarantee Margin are accounted on cash basis.

e) Dividend income is recognised in the year when the right to receive payment is established.

h) Purchases are accounted for net of modvat credit.

i) Excise Duty:

Excise Duty inrespect of finished goods lying in factory premises are provided for and included in the valuation of inventory.

j) Taxation:

i) Provision for current income tax is determined on the basis of the amount of tax payable on taxable income for the year.

ii) Deferred tax is recognised, subject to the consideration of prudence in respect of deferred tax assets, on timing differences, being the difference between taxable incomes and accounting income that originate in one year and are capable of reversal in one or more subsequent years.

k) Contingent Liabilities, Provisions & Contingent Assets:

i) Contingent liabilities are not recognised and are disclosed in notes.

ii) Provisions involving substantial degree of estimation in measurement are recognized when the present obligation resulting from past events gives rise to probability of outflow of resources embodying economic benefits on settlement.

iii) Provisions are reviewed at each Balance sheet date and adjusted to reflect the current best estimates.

iv) Contingent assets are neither recognised nor disclosed in financial statements.

l) Impairment of Assets:

The carrying amount of assets is reviewed at each balance sheet date to determine whether there is any indication of impairment of the carrying amount of the Company's assets. If any indication exists, the recoverable amount of such assets is estimated. An impairment loss is recognised wherever the carrying amount of the assets exceeds its recoverable amount.

m) Borrowing Costs:

Borrowing costs that are attributable to the acquisition of qualifying assets are capitalised as a part of the cost of such assets till such period the assets are ready for use. All other borrowing costs are charged to revenue.

The Company has only one class of shares referred to as equity shares having a par value of Rs. 10/-. Each holder of equity shares is entitled to one vote per share.

The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

The Board of Directors, in their meeting on 09-05-2015 proposed a dividend of Rs. 0.75 per equity share. The proposal is subject to the approval of share holders at their Annual General Meeting. The total dividend appropriation for the year ended 31st March, 2015 amounted to Rs. 40,87,757/- including corporate dividend tax of Rs. 6,81,125/-

During the year ended March,31,2014 the amount per share dividend recognised as distributions to equity share holders was Rs. 0.50. The total dividend appropriation for the year ended March,31,2014 amounted to Rs. 26,57,060/- including corporate dividend tax Rs. 3,85,972/-.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the company, after distribution of all preferential amounts. However, no such preferential amounts exist currently. The distribution will be in proportion to the number of equity shares held by the shareholders.


Mar 31, 2014

A). System of Accounting:

i). The Company follows the mercantile system of accounting and recognises income and expenditure on accrual basis unless otherwise stated hereinafter.

ii). The accounts are prepared under historical cost convention, as a going concern and generally in accordance with applicable accounting standards.

iii). Use of Estimates:

The preparation of the financial statements in conformity with generally accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent liabilities on the date of financial statements and the reported amount of revenue and expenses during the reporting period. Actual results could differ from those estimates. Any revision to accounting estimates is recognised in the period in which such revisions are made.

b). Fixed Assets and Depreciation:

i). Fixed Assets are stated at their cost of acquisition less Depreciation. Additions to Fixed Assets are net of Modvat Credit.

ii). Depreciation on Fixed Assets is provided on Straight Line Method in accordance with Schedule XIV of the Companies Act, 1956.

iii). Intangible Assets''.

Technical Know Fee:

Intangible Assets are stated at cost of acquisition less accumulated amortization. Technical knowhow is amortized over a period of Five Years in equal installments.

c). Investments:

Long Term Investments are stated at cost. Current Investments are carried at the lower of cost and quoted/fair value. Provision for diminution in the value of long term investments is made only if such a decline is other than temporary in the opinion of management.

d). Valuation of Inventories:

i). Raw Materials - Components - Lower of the Cost or net realisable value

ii). Stores & Spares - Lower of the Cost or net realisable value

iii). Cutting Tools and Holding Tools - Lower of the Cost or net realisable value

iv). Semi Finished Goods - Lower of the Cost or net realisable value, calculated on percentage of work executed on contracted price.

v). Finished Goods - Lower of the Cost or net realisable

e). Foreign Exchange Transactions:

Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of transactions. Monetary items are translated at the yearend rate. The differences between the rate prevailing on the date of transaction and on the date of settlement and also on translation at the end of the year are recognised as income or expenses, as the case may be for the year except in the case of Long Term Liabilities, where they relate to acquisition of fixed assets, in which case they are adjusted to the carrying cost of such.

f). Treatment of Retirement Benefits:

i). The Company''s contribution to recognised provident fund, and Employees'' state Insurance Scheme are defined contribution plans are charged to the Profit and Loss Account when incurred.

ii). The Company''s employees are covered under the Employees Group Gratuity Cum Life Assurance Scheme of Life Insurance Corporation of India which is a defined benefit scheme. The Company account for gratuity liability equivalent to the premium amount payable to Life Insurance Corporation of India every year, which is based on actuarial valuation.

iii). Leave Encashment is accounted on cash basis.

g). Revenue Recognition:

a) Revenue is recognised on transfer of significant risk and reward in respect of ownership.

b) Sales are stated exclusive of Value Added Tax , Central Sales Tax and are net of sales return and Trade Discount. Excise Duty deducted from gross turnover (gross) is the amount that is included in the amount of amount of gross turnover.

c) Set-off Claims and other claims, are accounted for as and when admitted by the appropriate authorities.

d) Exchange Fluctuation and accrued interest on L. C Margin and Bank Guarantee Margin are accounted on cafe basis.

e) Dividend income is recognised in the year when the right to receive payment is established.

h). Purchases are accounted for net of modvat credit.

i). Excise Duty:

Excise Duty in respect of finished goods lying in factory premises are provided for and included in the valuation of inventory.

j). Taxation:

i). Provision for current income tax is determined on the basis of the amount of tax payable on taxable income for the year.

ii). Deferred tax is recognised, subject to the consideration of prudence in respect of deferred tax assets, on timing differences, being the difference between taxable incomes and accounting income that originate in one year and are capable of reversal in one or more subsequent years.

k). Contingent Liabilities. Provisions & Contingent Assets:

i). Contingent liabilities are not recognised and are disclosed in notes.

ii). Provisions involving substantial degree of estimation in measurement are recognized when the present obligation resulting from past events gives rise to probability of outflow of resources embodying economic benefits on settlement.

iii). Provisions are reviewed at each Balance sheet date and adjusted to reflect the current best estimates.

iv). Contingent assets are neither recognised nor disclosed in financial statements.

1). Impairment of Assets:

The carrying amount of assets is reviewed at each balance sheet date to determine whether there is any indication of impairment of the carrying amount of the Company''s assets. If any indication exists, the recoverable amount of such assets is estimated. An impairment loss is recognised wherever the carrying amount of the assets exceeds its recoverable amount.

m). Borrowing Costs:

Borrowing costs that are attributable to the acquisition of qualifying assets are capitalised as a part of the cost of such assets till such period the assets are ready for use. All other borrowing costs are charged to revenue.

The Company has only one class of shares referred to as equity shares having a par value of "10/-. Each holder of equity shares is entitled to one vote per share.

The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

The Board of Directors, in their meeting on 10-5-2014 proposed a dividend of Rs. 0.50 per equity share. The proposal is subject to the approval of share holders at their Annual General Meeting. The total dividend appropriation for the year ended 31st March, 2014 amounted to Rs.26,57,060/- including corporate dividend tax of Rs.3,85,972/-.

During the previous year ended March, 31, 2013 the amount per share dividend recognised as distributions to equity share holders was Rs. 0.75 The total dividend appropriation for the year ended March 31, 2013 amounted to Rs.3959273/- including corporate dividend tax of Rs.552641/-.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the company, after distribution of all preferential amounts. However, no such preferential amounts exist currently. The distribution will be in proportion to the number of equity shares held by the shareholders.


Mar 31, 2013

A). System of Accounting:

i). The Company follows the mercantile system of accounting and recognises income and expenditure on accrual basis unless otherwise stated hereinafter.

ii). The accounts are prepared under historical cost convention, as a going concern and generally in accordance with applicable accounting standards.

iii). Use of Estimates:

The preparation of the financial statements in conformity with generally accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent liabilities on the date of financial statements and the reported amount of revenue and expenses during the reporting period. Actual results could differ from those estimates. Any revision to accounting estimates is recognised in the period in which such revisions are made.

b). Fixed Assets and Depreciation:

i). Fixed Assets are stated at their cost of acquisition less Depreciation. Additions to Fixed Assets are net of Modvat Credit.

ii). Depreciation on Fixed Assets is provided on Straight Line Method in accordance with Schedule XIV of the Companies Act, 1956.

iii). Intangible Assets:

Technical Know Fee:

Intangible Assets are stated at cost of acquisition less accumulated amortization.

Technical know how is amortized over a period of Five Years in equal installments.

c). Investments:

Long Term Investments are stated at cost. Current Investments are carried at the lower of cost and quoted/fair value. Provision for diminution in the value of long term investments is made only if such a decline is other than temporary in the opinion of management.

d). Valuation of Inventories:

i). Raw Materials - Components - Lower of the Cost or net realisable value

ii). Stores & Spares - Lower of the Cost or net realisable value

iii). Cutting Tools and Holding

Tools Lower of the Cost or net realisable value

iv). Semi Finished Goods - Lower of the Cost or net realisable value, calculated on percentage of work executed on contracted price.

v). Finished Goods - I nwer of the Cost or net realisable

e) Foreign Exchange Transactions:

Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of transactions. Monetary items are translated at the year end rate. The differences between the rate prevailing on the date of transaction and on the date of settlement and also on translation at the end of the year are recognised as income or expenses, as the case may be for the year except in the case of Long Term Liabilities, where they relate to acquisition of fixed assets, in which case thev are adjusted to the carrying cost of such assets.

f). Treatment of Retirement Benefits:

i). The Company''s contribution to recognised provident fund, and Employees'' state Insurance Scheme are defined contribution plans are charged to the Profit and Loss Account when incurred.

ii). The Company''s employees are covered under the Employees Group Gratuity Cum Life Assurance Scheme of Life Insurance Corporation of India which is a defined benefit scheme. The Company account for gratuity liability equivalent to the premium amount payable to Life Insurance Corporation of India every year, which is based on actuarial valuation.

iii). Leave Encashment is accounted on cash basis.

g). Revenue Recognition:

a) Revenue is recognised on transfer of significant risk and reward in respect of ownership.

b) Gross sales is inclusive of sales tax, excise duty and service income and are net of incentives discounts and rebates.

c) Set-off Claims and other claims, are accounted for as and when admitted by the appropriate authorities.

d) Exchange Fluctuation and accrued interest on L. C. Margin and Bank Guarantee Margin are accounted on cash basis.

e) Dividend income is recognised in the year when the right to receive payment is established.

h). Purchases are accounted for net of mod vat credit.

i). Excise Duty:

Excise Duty inrespect of finished goods lying in factory premises are provided for and included in the valuation of inventory.

j). Taxation:

i). Provision for current income tax is determined on the basis of the amount of tax payable on taxable income for the year.

ii). Deferred tax is recognised, subject to the consideration of prudence in respect of deferred tax assets, on timing differences, being the difference between taxable incomes and accounting income that originate in one year and are capable of reversal in one or more subsequent years.

k). Contingent Liabilities. Provisions & Contingent Assets:

i). Contingent liabilities are not recognised and are disclosed in notes.

ii). Provisions involving substantial degree of estimation in measurement are recognized when the present obligation resulting from past events gives rise to probability of outflow of resources embodying economic benefits on settlement.

iii). Provisions are reviewed at each Balance sheet date and adjusted to reflect the current best estimates.

iv). Contingent assets are neither recognised nor disclosed in financial statements,

l). Impairment of Assets: ''

The carrying amount of assets is reviewed at each balance sheet date to determine whether there is any indication of impairment of the carrying amount of the Company''s assets. If any indication exists, the recoverable amount of such assets is estimated. An impairment loss is recognised wherever the carrying amount of the assets exceeds its '' recoverable amount.

m). Borrowing Costs:

Borrowing costs that are attributable to the acquisition of qualifying assets are capitalised as a part of the cost of such assets till such period the assets are ready for use. All other borrowing costs are charged to revenue.

The Company has only one class of shares referred to as equity shares having a par value of Rs.10/-. Each holder of equity shares is entitled to one vote per share.


Mar 31, 2012

A). System of Accounting:

i). The Company follows the mercantile system of accounting and recognises income and expenditure on accrual basis unless otherwise stated hereinafter.

ii). The accounts are prepared under historical cost convention, as a going concern and generally in accordance with applicable accounting standards.

iii). Use of Estimates:

The preparation of the financial statements in conformity with generally accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent liabilities on the date of financial statements and the reported amount of revenue and expenses during the reporting period. Actual results could differ from those estimates. Any revision to accounting estimates is recognised in the period in which such revisions are made.

b). Fixed Assets and Depreciation:

i). Fixed Assets are stated at their cost of acquisition less Depreciation. Additions to Fixed Assets are net of Modvat Credit.

ii). Depreciation on Fixed Assets is provided on Straight Line Method in accordance with Schedule XIV of the Companies Act, 1956.

iii). Intangible Assets: Technical Know Fee:

Intangible Assets are stated at cost of acquisition less accumulated amortization. Technical know how is amortized over a period of Five Years in equal installments.

c). Investments:

Long Term Investments are stated at cost. Current Investments are carried at the lower of cost and quoted/fair value. Provision for diminution in the value of long term investments is made only if such a decline is other than temporary in the opinion of management.

d). Valuation of Inventories:

i). Raw Materials - Components - Lower of the Cost or net realisable value

ii). Stores & Spares - Lower of the Cost or net realisable value

iii). Cutting Tools and Holding

Tools - Lower of the Cost or net realisable value

iv). Semi Finished Goods - Lower of the Cost or net realisable

value, calculated on percentage of work executed on contracted price.

v). Finished Goods - Lower of the Cost or net realisable

e). Foreign Exchange Transactions:

Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of transactions. Monetary items are translated at the year end rate. The differences between the rate prevailing on the date of transaction and on the date of settlement and also on translation at the end of the year are recognised as income or expenses, as the case may be for the year except in the case of Long Term Liabilities, where they relate to acquisition of fixed assets, in which case they are adjusted to the carrying cost of such assets.

f). Treatment of Retirement Benefits:

i). The Company's contribution to recognised provident fund, and Employees' state Insurance Scheme are defined contribution plans are charged to the Profit and Loss Account when incurred.

ii). The Company's employees are covered under the Employees Group Gratuity Cum Life Assurance Scheme of Life Insurance Corporation of India which is a defined benefit scheme. The Company account for gratuity liability equivalent to the premium amount payable to Life Insurance Corporation of India every year, which

iii). Leave Encashment is accounted on cash basis.

iv) Bonus is accounted for on cash basis.

g). Revenue Recognition:

a) Revenue is recognised on transfer of significant risk and reward in respect of ownership.

b) Gross sales is inclusive of sales tax, excise duty and service income and are net of incentives discounts and rebates.

c) Set-off Claims and other claims, are accounted for as and when admitted by the appropriate authorities.

d) Exchange Fluctuation and accrued interest on L. C. Margin and Bank Guarantee Margin are accounted on cash basis.

e) Dividend income is recognised in the year when the right to receive payment is established.

h). Purchases are accounted for net of modvat credit.

i). Excise Duty:

Excise Duty in respect of finished goods lying in factory premises are provided for and included in the valuation of inventory.

j). Taxation:

i). Provision for current income tax is determined on the basis of the amount of tax payable on taxable income for the year.

ii). Deferred tax is recognised, subject to the consideration of prudence in respect of deferred tax assets, on timing differences, being the difference between taxable incomes and accounting income that originate in one year and are capable of reversal in one or more subsequent years.

k). Contingent Liabilities, Provisions & Contingent Assets:

i). Contingent liabilities are not recognised and are disclosed in notes.

ii). Provisions involving substantial degree of estimation in measurement are recognized when the present obligation resulting from past events gives rise to probability of outflow of resources embodying economic benefits on settlement.

iii). Provisions are reviewed at each Balance sheet date and adjusted to reflect the current best estimates.

iv). Contingent assets are neither recognised nor disclosed in financial statements.

l). Impairment of Assets:

The carrying amount of assets is reviewed at each balance sheet date to determine whether there is any indication of impairment of the carrying amount of the Company's assets. If any indication exists, the recoverable amount of such assets is estimated. An impairment loss is recognised wherever the carrying amount of the assets exceeds its recoverable amount.

m). Borrowing Costs:

Borrowing costs that are attributable to the acquisition of qualifying assets are capitalised as a part of the cost of such assets till such period the assets are ready for use. All other borrowing costs are charged to revenue.


Mar 31, 2011

A). System of Accounting:

i). The Company follows the mercantile system of accounting and recognises income and expenditure on accrual basis unless otherwise stated hereinafter.

ii). The accounts are prepared under historical cost convention, as a going concern and generally in accordance with applicable accounting standards.

iii). Use of Estimates:

The preparation of the financial statements in conformity with generally accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent liabilities on the date of financial statements and the reported amount of revenue and expenses during the reporting period. Actual results could differ from those estimates. Any revision to accounting estimates is recognised in the period in which such revisions are made.

b). Fixed Assets and Depreciation:

i). Fixed Assets are stated at their cost of acquisition less Depreciation. Additions to Fixed Assets are net of Modvat Credit.

ii). Depreciation on Fixed Assets is provided on Straight Line Method in accordance with Schedule XlVofthe Companies Act, 1956.

iii). Intangible Assets: Technical Know Fee:

Intangible Assets are stated at cost of acquisition less accumulated amortization. Technical know how is amortized over a period of Five Years in equal installments.

c). Investments:

Long Term Investments are stated at cost. Current Investments are carried at the lower of cost and quoted/fair value. Provision for diminution in the value of long term investments is made only if such a decline is other than temporary in the opinion of management.

d). Valuation of Inventories:

i). Raw Materials-Components - Lower of the Cost or net realisable value

ii). Stores & Spares - Lower of the Cost or net realisable value

iii). Cutting Tools and Holding

Tools - Lower of the Cost or net realisable value

iv). Semi Finished Goods - Lower of the Cost or net realisable value, calculated on percentage of work executed on contracted price.

v). Finished Goods - Lower ofthe Cost or net realisable

e). Foreign Exchange Transactions:

Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of transactions. Monetary items are translated at the year end rate. The differences between the rate prevailing on the date of transaction and on the date of settlement and also on translation at the end ofthe year are recognised as income or expenses, as the case may be for the year except in the case of Long Term Liabilities, where they relate to acquisition of fixed assets, in which case they are adjusted to the carrying cost of such assets.

f). Treatment of Retirement Benefits:

i). The Companys contribution to recognised providentfund, and Employees state Insurance Scheme are defined contribution plans are charged to the Profit and Loss Account when incurred.

ii). The Companys employees are covered under the Employees Group Gratuity Cum Life Assurance Scheme of Life Insurance Corporation of India which is a defined benefit scheme. The Company account for gratuity liability equivalent to the premium amount payable to Life Insurance Corporation of India every year, which is based on actuarial valuation.

iii). Leave Encashment is accounted on cash basis.

iv) Bonus is accounted for on cash basis.

g). Revenue Recognition:

a) Revenue is recognised on transfer of significant risk and reward in respect of ownership.

b) Gross sales is inclusive of sales tax, excise duty and service income and are net of incentives discounts and rebates.

c) Set-off Claims and other claims, are accounted for as and when admitted by the appropriate authorities.

d) Exchange Fluctuation and accrued interest on L. C. Margin and Bank Guarantee Margin are accounted on cash basis.

e) Dividend income is recognised in the year when the right to receive payment is established.

h). Purchases are accounted for net of modvat credit.

i). Excise Duty:

Excise Duty inrespect of finished goods lying in factory premises are provided for and included in the valuation of inventory.

j). Taxation:

i). Provision for current income tax is determined on the basis of the amount of tax payable on taxable income for the year.

ii). Deferred tax is recognised, subject to the consideration of prudence in respect of deferred tax assets, on timing differences, being the difference between taxable incomes and accounting income that originate in one year and are capable of reversal in one or more subsequent years.

k). Contingent Liabilities, Provisions & Contingent Assets:

i). Contingent liabilities are not recognised and are disclosed in notes.

ii). Provisions involving substantial degree of estimation in measurement are recognized when the present obligation resulting from past events gives rise to probability of outflow of resources embodying economic benefits on settlement.

iii). Provisions are reviewed at each Balance sheet date and adjusted to reflect the current best estimates.

iv). Contingent assets are neither recognised nor disclosed in financial statements.

l). Impairment of Assets:

The carrying amount of assets is reviewed at each balance sheet date to determine whether there is any indication of impairment of the carrying amount of the Companys assets. If any indication exists, the recoverable amount of such assets is estimated. An impairment loss is recognised wherever the carrying amount of the assets exceeds its recoverable amount.

m). Borrowing Costs:

Borrowing costs that are attributable to the acquisition of qualifying assets are capitalised as a part of the cost of such assets till such period the assets are ready for use. All other borrowing costs are charged to revenue.


Mar 31, 2010

A). System of Accounting:

i). The Company follows the mercantile system of accounting and recognises income and expenditure on accrual basis unless otherwise stated hereinafter.

ii). The accounts are prepared under historical cost convention, as a going concern and generally in accordance with applicable accounting standards.

iii). Use of Estimates:

The preparation of the financial statements in conformity with generally accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent liabilities on the date of financial statements and the reported amount of revenue and expenses during the reporting period. Actual results could differ from those estimates. Any revision to accounting estimates is recognised in the period in which such revisions are made.

b). Fixed Assets and Depreciation:

i). Fixed Assets are stated at their cost of acquisition less Depreciation. Additions to Fixed Assets are net of Modvat Credit.

ii). Depreciation on Fixed Assets is provided on Straight Line Method in accordance with Schedule XIV ofthe Companies Act, 1956.

iii). IntangibleAssets: Technical Know Fee:

IntangibleAssets are stated at cost of acquisition less accumulated amortization. Technical know how is amortized over a period of Five Years in equal installments.

c). Investments:

Long Term Investments are stated at cost. Current Investments are carried at the lower of cost and quoted/fair value. Provision for diminution in the value of long term investments is made only if such a decline is other than temporary in the opinion ofthe management.

d). Valuation of Inventories:

i). Raw Materials-Components - Lower ofthe Cost or net realisable value ii). Stores & Spares - Lower ofthe Cost or net realisable value iii). Cutting Tools and Holding Tools - Lower of the Cost or net realisable value iv). Semi Finished Goods - Lower of the Costornet realisable value, calculated on percentage of work executed on contracted price. v). Finished Goods - LoweroftheCostornetrealisable

f). Treatment of Retirement Benefits:

i). The Companys contribution to recognised provident fund, and Employees state Insurance Scheme are defined contribution plans are charged to the Profit and Loss Account when incurred.

ii). The Companys employees are covered under the Employees Group Gratuity Cum Life Assurance Scheme of Life Insurance Corporation of India which is a defined benefit scheme. The Company account for gratuity liability equivalent to the premium amount payable to Life Insurance Corporation of India every year, which is based on actuarial valuation.

iii). Leave Encashment is accounted on cash basis.

iv) Bonus is accounted for on cash basis.

g). Revenue Recognition:

a) Revenue is recognised on transfer of significant risk and reward in respect of ownership.

b) Gross sales is inclusive of sales tax, excise duty and service income and are net of incentives discounts and rebates.

c) Set-off Claims and other claims, are accounted for as and when admitted by the appropriate authorities.

d) Exchange Fluctuation and accrued interest on L. C. Margin and Bank Guarantee Margin are accounted on cash basis

e) Dividend income is recognised in the year when the right to receive payment is established. h). Purchases are accounted for net of modvat credit.

i). Excise Duty:

Excise Duty inrespect of finished gooHc • ,,g jn factory premises are provided for and included in the valuation of inventory.

j). Taxation:

i). Provision for current income tax is determined on the basis of the amount of tax payable on taxable income forthe year.

ii). Deferred tax is recognised, subject to the consideration of prudence in respect of deferred tax assets, on timing differences, being the difference between taxable incomes and accounting income that originate in one year and are capable of reversal in one or more subsequent years.

k). Contingent Liabilities, Provisions & Contingent Assets:

i). Contingent liabilities are not recognised and are disclosed in notes.

ii). Provisions involving substantial degree of estimation in measurement are recognized when the present obligation resulting from past events gives rise to probability of outflow of resources embodying economic benefits on settlement.

iii). Provisions are reviewed at each Balance sheet date and adjusted to reflect the current best estimates.

iv). Contingent assets are neither recognised nor disclosed in financial statements.

i). Impairment of Assets:

The carrying amount of assets is reviewed at each balance sheet date to determine whether there is any indication of impairment of the carrying amount of the Companys assets. If any indication exists, the recoverable amount of such assets is estimated. An impairment loss is recognised whereverthe carrying amount of the assets exceeds its recoverable amount.

m). Borrowing Costs:

Borrowing costs that are attributable to the acquisition of qualifying assets are capitalised as a part of the cost of such assets till such period the assets are ready for use. All other borrowing costs are charged to revenue.