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Accounting Policies of TVS Srichakra Ltd. Company

Mar 31, 2015

1. AS 1: DISCLOSURE OF ACCOUNTING POLICIES:

The financial statements are prepared on a going concern concept under the historical cost convention on accrual basis and in accordance with the requirements of the Companies Act 2013 and after considering the mandatory accounting standards issued by the Institute of Chartered Accountants of India.

2. AS 2: VALUATION OF INVENTORIES:

Raw Materials, stores and spares are valued at cost arrived by applying the Weighted Average Method. Cost consists of cost of materials, Cess, Duty & Freight.

Work in progress is valued at cost applying weighted average method. Cost includes cost of Materials, Labour and other appropriate overheads.

Finished goods are valued at lower of cost and realizable value. Cost for this purpose comprises materials, labour and other appropriate overheads and Excise Duty.

3. AS 3: CASH FLOW STATEMENTS:

The Cash flow statement has been prepared under ''Indirect method'' set out in AS-3 and pursuant to the listing agreement with the stock exchanges.

4. AS 6: DEPRECIATION ACCOUNTING:

The Companies Act, 2013 stipulates systematic allocation of the depreciable amount of an asset over its useful life. The Act also prescribes that a maximum of 5% of the cost can be retained as residual value and the balance 95% to be depreciated over the useful life of the asset. This method has been followed by the Company.

All tangible assets are depreciated under the straight line method. The Company has adopted useful life specified in Schedule II of the Companies Act, 2013, except on certain category of assets for which the company has re-assessed the same, based on Chartered Engineer''s technical evaluation in accordance with Part A of Schedule II to the Companies Act, 2013. Assets costing Rs. 5000 or below acquired during the year is continued to be depreciated in full retaining Rs.1 per asset.

Depreciation is provided for on pro-rata basis on additions and deletions made during the year.

The carrying amount of assets as on the first day of the financial year is depreciated over the remaining useful life of the asset as per schedule II of the Companies Act, 2013. Where the remaining useful life of an asset is Nil, the carrying amount is written-off in the statement of profit and loss after retaining the residual value.

5. AS 9: REVENUE RECOGNITION:

Income of the company is derived from sale of manufactured goods and includes excise duty but exclude sales tax and value added tax.

Domestic sales are recognized net of returns on transfer of significant risks and rewards of ownership to the buyer, which generally coincides with the delivery of goods to customers.

Export sales are recognized on the basis of date of bill of lading. Export benefits, if any, are recognized on post shipment basis.

Interest incomes are recognized using the time proportion method based on the rates implicit in the transaction. Dividend income is recognized when the right to receive dividend is established.

6. AS 10: ACCOUNTING FOR FIXED ASSETS:

Gross block of fixed assets are shown at the costs of acquisition, which includes taxes, duties (net of CENVAT and VAT input credits availed) and other identifiable direct expenses incurred.

7. AS 11: ACCOUNTING FOR EFFECTS IN FOREIGN EXCHANGE RATES:

Transactions are recorded at equivalent rupee values at the exchange rate prevailing on the date of transaction or at the rates that closely approximate the rate at the date of the transaction.

The difference on account of fluctuation at the rate of exchange prevailing on the date of transaction and the date of realization is recognized in the statement of profit and loss.

Foreign currency assets and liabilities are restated at the rates ruling at the year end and the difference is recognized in the statement of profit and loss.

Forward premium in respect of forward exchange contracts is amortized and recognized over the life of the contract.

8. AS 13: ACCOUNTING FOR INVESTMENTS:

All the investments are long term investments. Investments are stated at cost. Diminutions in respect of long-term investments are provided for when there is a permanent diminution in the value of such investments.

9. AS 15 (REVISED): ACCOUNTING FOR RETIREMENT BENEFITS:

The Company provides for gratuity, a defined benefit retirement plan, covering eligible employees. In accordance with the provisions of the Payment of Gratuity Act, 1972, the Company provides a lump-sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the employees'' salary and tenure of employment. Liabilities with regard to the retirement plan are determined by an independent actuarial valuation at the balance sheet date, based on which the Company contributes all the ascertained liabilities to the Company''s gratuity fund maintained by ICICI Prudential Life Insurance Co. Ltd

Leave encashment is provided for based on actuarial valuation.

Employees above a certain category are participants in the Company''s superannuation fund, for which the Company makes annual contributions based on their salaries to a fund maintained by the Life Insurance Corporation of India.

The Company makes its statutory contribution to the employees'' provident fund to the Employees'' Provident Fund Organization of the Government of India.

The Company makes contribution to the employees'' health scheme for those employees governed by the ESI Act.

The Company has adopted the revised accounting standard on employees benefit (AS-15, revised) issued by the Institute of Chartered Accountants of India.

Reconciliation of opening and closing balances of the present value of the defined benefit obligation:

(Rs. In Crores)

LEAVE ENCASHMENT

Particulars 31.3.2015 31.3.2014

Obligations at period 2.55 2.50 beginning Service Cost 0.46 0.42

Interest cost 0.16 0.20

Actuarial (gain)/loss 1.14 (0.01)

Benefits paid (0.86) (0.56)

Obligations at the period end 3.45 2.55

GRATUITY

Particulars 31.3.2015 31.3.2014

Obligations at period beginning 12.57 11.74

Service Cost 1.56 0.54

Interest cost 0.96 1.05

Actuarial (gain)/loss 4.18 (0.20)

Benefits paid (0.60) (0.56)

Obligations at the period end 18.67 12.57

GRATUITY

Change in plan assets 31.3.2015 31.3.2014

Plan assets at the beginning of the year 12.08 10.34

Expected return on the plan assets 0.95 0.86

Actuarial gain/(loss) 0.97 0.04

Contributions 0.49 1.40

Benefits paid (0.60) (0.56)

Plan assets at the year end, 13.89 12.08 fair value

Reconciliation of the defined plan obligations and fair value of plan assets at the year end:

Fair value of the plan assets 13.89 at the year end

Defined plan obligations at the year end 18.67

Assets/(liabilities) recognized in the 4.78 Balance Sheet

Gratuity cost: 31.3.2015 31.3.2014

Service Cost 1.56 0.54

Interest Cost 0.96 1.05

Expected return on plan assets (0.95) (0.86)

Actuarial (gains)/losses 3.21 (0.24)

Net gratuity cost 4.78 0.49

Assumptions: Gratuity Leave Encashment

Discount Factor 7.82% 7.82%

Estimated Return on Plan Assets 8.00% -

Salary Increase 6.00% 6.00%

Attrition Rate 5.00% 5.00%

Retirement Age 58 & 60 Years 58 & 60 Years

10. AS 16: Borrowing Cost:

Interests on borrowings are capitalized wherever there is substantial period of time between the date of borrowing and date on which the assets are put to use.

11. AS 17: Segment reporting:

The company operates only in one segment and hence the disclosure requirements of Accounting Standard on Segment reporting (AS 17) issued by the Institute of Chartered Accountants of India are not applicable.

12. AS 19: Leases:

The operating lease entered in an earlier year is for a period of 10 years.

The details of maturity profile of future operating lease payments are furnished below:

a. The total of future minimum lease payments under non-cancellable operating lease for each of the following periods (Net):

Rs. In Crores

* Not later than one year 10.66

* Later than one year and not later than five years 53.04

* Later than five years 1.01

b. Total of minimum sub-lease payments expected to be received

under non-cancellable sub-leases at the Balance Sheet date Not Applicable

c. Lease payments recognized in the Statement of Profit and Loss for the year under the head rent paid Rs. 7.12 Crores.

13. AS 20: Earnings Per Share:

Basic earnings per share are disclosed in the Statement of Profit and Loss. There is no diluted earning per share as there are no dilutive potential equity shares.

14. AS 22: Accounting for taxes on income:

The company provides for current taxes at current rates under the provisions of the Income Tax Act, 1961. Disputed taxes are not provided for, but disclosed in the notes on accounts. The company provides for deferred tax arising on account of temporary and reversible timing differences on account of depreciation, employees'' benefits and expenditure which are allowed under the Income tax act only on payment basis.

15. AS 25: Interim financial reporting:

Quarterly results are published in accordance with the guidelines issued by the Securities and Exchange Board of India. The recognition and measurement principles as laid down in the standard are followed with respect to such results. Quarterly financial results are also subjected to a limited financial review by the auditors as required.

16. AS 26: Intangible Assets:

The company amortizes intangible assets taking into consideration the useful life based on the estimates made by the management. Where the management considers that an intangible asset does not have a value as at the end of the accounting year, such intangible asset is fully amortized.

17. AS 28: Impairment of Assets:

The company makes an assessment on the balance sheet date to determine whether there is any indication of impairment in the carrying amount of the company''s fixed assets. If any such indication exists, the recoverable amounts are estimated and an impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount.

18. AS 29: Provisions, Contingent Liabilities and Contingent Assets:

a) Provisions for expenses are made on estimated basis, based upon the judgment of the company.

b) Contingent Liabilities are not provided for but disclosed in the notes on accounts.

c) There are no contingent assets.

Rs. in Crores

Contingent liabilities : 31.3.2015 31.3.2014

Balance at the beginning of the year 74.88 50.04

Additions / (Deletions) during the year 9.09 24.84

Balance at the end of the year 83.97 74.88

Liabilities disputed and not provided for:

- Income tax, Sales Tax & Excise duty:

Balance at the beginning of the year 22.74 2.15

Additions / (Deletions) during the year (14.67) 20.59

Balance at the end of the year 8.07 22.74


Mar 31, 2014

1. AS 1: Disclosure of accounting policies:

The financial statements are prepared on a going concern concept under the historical cost convention on accrual basis and in accordance with the requirements of the Companies Act, 1956 and after considering the mandatory Accounting Standards issued by the Institute of Chartered Accountants of India.

2. AS 2: Valuation of inventories:

Raw Materials, stores and spares are valued at cost arrived by applying the Weighted Average Method. Cost consists of cost of materials, Cess, Duty & Freight.

Work in progress is valued at cost applying weighted average method. Cost includes cost of Materials, Labour and other appropriate overheads.

Finished goods are valued at lower of cost and realizable value. Cost for this purpose comprises materials, labour and other appropriate overheads and Excise Duty.

3. AS 3: Cash flow statements:

Pursuant to the listing agreement with the Stock Exchanges, the Company has attached cash flow statement to the Balance Sheet and Statement of Profit and Loss. The cash flow statement is prepared under ''Indirect method''.

4. AS 6: Depreciation accounting:

i. All assets are depreciated on Straight Line Method at the rates prescribed in Schedule XIV of the Companies'' Act, 1956.

ii. Depreciation is provided for on pro-rata basis on additions and deletions made during the year. Assets costing Rs.5000/- and below are depreciated in full.

5. AS 9: Revenue Recognition:

Income of the Company is derived from sale of manufactured goods and includes Excise Duty and is net of sales returns and trade discounts. Domestic sales are recognized on the basis of sales invoices raised. Export sales are recognized on the basis of date of bills of lading. Export benefits, if any, are recognized on post shipment basis.

Interest incomes/expenses are recognized using the time proportion method based on the rates implicit in the transaction. Dividend income is recognized when the right to receive dividend is established.

6. AS 10: Accounting for fixed assets:

Gross block of fixed assets are shown at the costs of acquisition, which includes taxes, duties (net of CENVAT and VAT input credits availed) and other identifiable direct expenses incurred.

7. AS 11: Accounting for effects in foreign exchange rates:

Transactions are accounted at equivalent rupee values at the agreed forward contract rates. The difference on account of fluctuation at the rate of exchange prevailing on the date of transaction and the date of realization is treated as revenue.

Foreign currency assets and liabilities are restated at the rates ruling at the year end and the difference recognized in the statement of Profit and Loss.

8. AS 13: Accounting for Investments:

All the investments are long term investments. Diminutions in respect of long term investments are provided for when there is a permanent diminution in the value of such investments.

Investments are stated at cost. In respect of investments where the realizable value is less than cost, lower value has been adopted.

9. AS 15 (revised): Accounting for retirement benefits:

The Company provides for gratuity, a defined benefit retirement plan, covering eligible employees. In accordance with the provisions of the Payment of Gratuity Act, 1972, the Company provides a lump-sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the employees'' salary and tenure of employment. Liabilities with regard to the retirement plan are determined by an independent actuarial valuation at the Balance Sheet date, based on which the Company contributes all the ascertained liabilities to the Company''s gratuity fund.

Leave encashment is provided for based on actuarial valuation.

Employees above a certain category are participants in the Company''s Superannuation Fund, for which the Company makes annual contributions based on their salaries and tenure of employment to a fund maintained by the Life Insurance Corporation of India.

The Company makes its statutory contribution to the Employees'' Provident Fund to the Employees'' Provident Fund Organization of the Government of India.

The Company makes contribution to the employees'' health scheme for those employees governed by the ESI Act.

The Company has adopted the revised accounting standard on employees benefit (AS-15, revised) issued by the Institute of Chartered Accountants of India.

10. AS 16: Borrowing Cost:

Interests on borrowings are capitalized wherever there is substantial period of time between the date of borrowing and date on which the assets are put to use.

11. AS 17: Segment reporting:

The company operates only in one segment and hence the disclosure requirements of Accounting Standard on Segment reporting (AS 17) issued by the Institute of Chartered Accountants of India are not applicable.

12. AS 19: Leases:

The operating lease entered in the immediately preceding year is for a period of 10 years. The details of maturity profile of future operating lease payments are furnished below:

13. AS 20: Earnings Per Share:

Basic earnings per share are disclosed in the Profit and Loss. There is no diluted earning per share as there are no dilutive potential equity shares.

14. AS 22: Accounting for taxes on income:

The company provides for current taxes at current rates under the provisions of the Income Tax Act, 196 Disputed taxes are not provided for, but disclosed in the notes on accounts. The company provides for deferre tax arising on account of temporary and reversible timing differences on account of depreciation, employee benefits and expenditure which are allowed under the Income Tax Act only on payment basis.

15. AS 25: Interim financial reporting:

Quarterly results are published in accordance with the guidelines issued by the Securities and Exchang Board of India. The recognition and measurement principles as laid down in the standard are followed wit respect to such results. Quarterly financial results are also subjected to a limited financial review by th Auditors as required.

16. AS 26: Intangible Assets:

The company capitalizes non integral software as intangible assets. The intangible assets are depreciated the rates applicable to computers in Schedule XIV of the Companies Act, 1956 under the Straight Line metho

17. AS 28: Impairment of Assets:

The company makes an assessment on the balance sheet date to determine whether there is any indicatio of impairment in the carrying amount of the company''s fixed assets. If any such indication exists, the recoverab amounts are estimated and an impairment loss is recognized whenever the carrying amount of an ass exceeds its recoverable amount.

18. AS 29: Provisions, Contingent Liabilities and Contingent Assets:

a) Provisions for expenses are made on estimated basis, based upon the judgment of the company.

b) Contingent Liabilities are not provided for but disclosed in the notes on accounts.

c) There are no contingent assets.


Mar 31, 2012

A. Details of Security for Secured Loans

Working Capital facilities availed from State Bank of India are secured by a first charge by way of hypothecation of Stock of Raw Materials, Stores, Work in Progress, Finished goods and Book Debts.

1. AS 1: Disclosure of accounting policies:

The financial statements are prepared on a going concern concept under the historical cost convention on accrual basis and in accordance with the mandatory Accounting Standards issued by the Institute of Chartered Accountants of India.

2. AS 2: Valuation of inventories:

Raw Materials, stores and spares are valued at cost arrived by applying the Weighted Average Method. Cost consists of cost of materials, Cess, Duty & Freight.

Work in progress is valued at cost applying weighted average method. Cost includes cost of Materials, Labour and other appropriate overheads.

Finished goods are valued at lower of cost and realizable value. Cost for this purpose comprises materials, labour and other appropriate overheads and Excise Duty.

3. AS 3: Cash flow statements:

Pursuant to the listing agreement with the Stock Exchanges, the Company has attached cash flow statement to the Balance Sheet and Statement of Profit and Loss. The cash flow statement is prepared under 'Indirect method'.

4. AS 6: Depreciation accounting:

i. All assets are depreciated on Straight Line Method at the rates prescribed in Schedule XIV of the Companies' Act, 1956.

ii. Depreciation is provided for on pro-rata basis on additions and deletions made during the year. Assets costing Rs.5000/- and below are depreciated in full.

5. AS 9: Revenue Recognition:

Income of the Company is derived from sale of manufactured goods and includes Excise Duty and is net of sales returns and trade discounts. Domestic sales are recognized on the basis of sales invoices raised. Export sales are recognized on the basis of date of bills of lading. Export benefits, if any, are recognized on post shipment basis.

Interest incomes/expenses are recognized using the time proportion method based on the rates implicit in the transaction. Dividend income is recognized when the right to receive dividend is established.

6. AS 10: Accounting for fixed assets:

Gross block of fixed assets are shown at the costs of acquisition, which includes taxes, duties (net of CENVAT and VAT input credits availed) and other identifiable direct expenses incurred.

7. AS 11: Accounting for effects in foreign exchange rates:

Transactions are accounted at equivalent rupee values at the agreed forward contract rates. The difference on account of fluctuation at the rate of exchange prevailing on the date of transaction and the date of realization is treated as revenue.

Foreign currency assets and liabilities are restated at the rates ruling at the year end and the difference recognized in the Profit and Loss Account.

8. AS 13: Accounting for Investments:

All the investments are long term investments. Diminution in respect of long term investments are provided for when there is a permanent diminution in the value of such investments.

Investments are stated at cost. In respect of investments where the realizable value is less than cost, lower value has been adopted.

9. AS 15 (revised): Accounting for retirement benefits:

The Company provides for gratuity, a defined benefit retirement plan, covering eligible employees. In accordance with the provisions of the Payment of Gratuity Act, 1972, the Company provides a lump-sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the employees' salary and tenure of employment. Liabilities with regard to the retirement plan are determined by an independent actuarial valuation at the Balance Sheet date, based on which the Company contributes all the ascertained liabilities to the Company's gratuity fund.

Leave encashment is provided for based on actuarial valuation.

Employees above a certain category are participants in the Company's Superannuation Fund, for which the Company makes annual contributions based on their salaries and tenure of employment to a fund maintained by the Life Insurance Corporation of India.

The Company makes its statutory contribution to the Employees' Provident Fund to the Employees' Provident Fund Organization of the Government of India.

The Company makes contribution to the employees' health scheme for those employees governed by the ESI Act.

The Company has adopted the revised accounting standard on employees benefit (AS-15, revised) issued by the Institute of Chartered Accountants of India.

Reconciliation of opening and closing balances of the present value of the defined benefit obligation:

Investment details of plan assets:

The Company contributes the liability as per actuarial valuation to the Company's gratuity fund manager, ICICI Prudential Life Insurance Co. Ltd.

10. AS 16: Borrowing Cost:

Interests on borrowings are capitalized wherever there is substantial period of time between the date of borrowing and date on which the assets are put to use.

11. AS 17: Segment reporting:

The company operates only in one segment and hence the disclosure requirements of Accounting Standard on Segment reporting (AS 17) issued by the Institute of Chartered Accountants of India are not applicable.

13. AS 20: Earnings Per Share:

Basic earnings per share are disclosed in the Profit and Loss Account. There is no diluted earnings per share as there are no dilutive potential equity shares.

14. AS 22: Accounting for taxes on income:

The company provides for current taxes at current rates under the provisions of the Income Tax Act, 1962. Disputed taxes are not provided for, but disclosed in the notes on accounts. The company provides for deferred tax arising on account of temporary and reversible timing differences on account of depreciation, employees' benefits and expenditure which are allowed under the Income Tax Act only on payment basis.

15. AS 25: Interim financial reporting:

Quarterly results are published in accordance with the guidelines issued by the Securities and Exchange Board of India. The recognition and measurement principles as laid down in the standard are followed with respect to such results. Quarterly financial results are also subjected to a limited financial review by the Auditors as required.

16. AS 26: Intangible Assets:

The company capitalizes on integral software as intangible assets. The intangible assets are depreciated at the rates applicable to computers in Schedule XIV of the Companies' Act, 1956 under the Straight Line Method.

17. AS 28: Impairment of Assets:

The company makes an assessment on the balance sheet date to determine whether there is any indication of impairment in the carrying amount of the company's fixed assets. If any such indication exists, the recoverable amounts are estimated and an impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount.

18. AS 29: Provisions, Contingent Liabilities and Contingent Assets:

a) Provisions for expenses are made on estimated basis, based upon the judgment of the company.

b) Contingent Liabilities are not provided for but disclosed in the notes on accounts.

c) There are no contingent assets.

(Rs. In Lakhs)

Contingent liabilities: 31.3.2012 31.3.2011

Balance at the beginning of the year 4244.52 5347.35

Additions /(Deletions) during the year 8403.95 (1102.83)

Balance at the end of the year 12648.47 4244.52

Liabilities disputed and not provided for: - Sales Tax & Excise: 31.3.2012 31.3.2011

Balance at the beginning of the year 193.16 201.97

Additions /(Deletions) during the year 11.63 (881)

Balance at the end of the year 204.79 193.16


Mar 31, 2011

1. AS 1: Disclosure of accounting policies:

The financial statements are prepared on a going concern concept under the historical cost convention on accrual basis and in accordance with the mandatory accounting standards issued by the Institute of Chartered Accountants of India.

2. AS 2: Valuation of inventories:

Raw Materials, and stores and spares are valued at cost arrived by applying the first in first out method. Cost consists of cost of materials, Cess, Duty & Freight.

Work in progress is valued at cost. Cost Includes cost of materials, labour and other appropriate overheads.

Finished goods are valued at lower of cost and realizable value. Cost for this purpose comprises materials, labour and other appropriate overheads and Excise Duty.

3. AS 3: Cash flow statements:

Pursuant to the listing agreement with the Stock Exchanges, the Company has attached Cash Flow Statement to the Balance Sheet and the Profit and Loss Account.

4. AS 6: Depreciation accounting:

i. All assets are depreciated on Straight Line Method at the rates prescribed in Schedule XIV of the Companies Act, 1956.

ii. Depreciation is provided for on pro-rata basis on additions and deletions made during the year. Assets costing Rs.5000/ and below are depreciated in full.

5. AS 9: Revenue Recognition:

Income of the Company is derived from sale of manufactured goods and includes Excise Duty and is net of sales returns and trade discounts. Domestic sales are recognized on the basis of sales invoices raised. Export sales are recognized on the basis of date of bills of lading. Export benefits, if any, are recognized on post shipment basis.

Interest income/expenses are recognized using the time proportion method based on the rates implicit in the transaction. Dividend income is recognized when the right to receive dividend is established.

6. AS 10: Accounting for fixed assets:

Gross block of fixed assets are shown at the costs of acquisition, which includes taxes, duties (net of CENVAT and VAT input credits availed) and other identifiable direct expenses incurred.

7. AS 11: Accounting for effects in foreign exchange rates:

Transactions are accounted at equivalent rupee values based on exchange rate prevailing on the date of transaction. The difference on account of fluctuation at the rate of exchange prevailing on the date of transaction and the date of realization is treated as revenue.

Foreign currency assets and liabilities are restated at the rates ruling at the year end and the difference recognized in the Profit and Loss Account.

8. AS 13: Accounting for Investments:

All the investments are long term investments. Diminution in respect of long term investments are provided for when there is a permanent diminution in the value of such investments.

Investments are stated at cost. In respect of investments where the realizable value is less than cost, lower value has been adopted.

9. AS 15 (revised): Accounting for retirement benefits:

The Company provides for gratuity, a defined benefit retirement plan, covering eligible employees. In accordance with the provisions of the Payment of Gratuity Act, 1972, the Company provides a lump-sum payment to vested employees at retirement, death, incapacitation, or termination of employment, of an amount based on the employees salary and tenure of employment. Liabilities with regard to the retirement plan are determined by an independent actuarial valuation at the Balance Sheet date, based upon which the Company contributes all the ascertained liabilities to the Companys gratuity fund.

Leave encashment is provided for based on actuarial valuation.

Employees above a certain category are participants in the Companys Superannuation Fund, for which the Company makes annual contributions based upon their salaries and tenure of employment to a fund maintained by the Life Insurance Corporation of India.

The Company makes its statutory contribution to the Employees Provident Fund to the Employees Provident Fund Organization of the Government of India.

The Company makes contribution to the employees health scheme for those employees governed by the ESI Act.

The Company has adopted the revised Accounting Standard on employees benefit (AS-15, revised) issued by the Institute of Chartered Accountants of India.

Investment details of plan assets:

The Company contributes the liability as per actuarial valuation to the Companys gratuity fund manager, ICICI Prudential Life Insurance Co. Ltd.

10. AS 16: Borrowing Cost:

Interests on borrowings are capitalized wherever there is substantial period of time between the date of borrowing and date on which the assets are put to use.

11. AS 17: Segment reporting:

The Company operates only in one segment and hence the disclosure requirements of Accounting Standard on Segment reporting ( AS 17) issued by the Institute of Chartered Accountants of India are not applicable.

12. AS 19: Leases:

The Company has entered into hire purchase transactions for a period of five years which are in the nature of financial leases as per the provisions of the above standard.

13. AS 20: Earnings Per Share:

Basic earnings per share are disclosed in the Profit and Loss Account. There is no diluted earning per share as there are no dilutive potential equity shares.

14. AS 22: Accounting for taxes on income:

The Company provides for current taxes at current rates under the provisions of the Income Tax Act, 1961. Disputed taxes are not provided for, but disclosed in the notes on accounts. The Company provides for deferred

tax arising on account of temporary and reversible timing differences on account of depreciation, employees benefits and expenditure which are allowed under the Income Tax Act only on payment basis.

15. AS 25: Interim financial reporting:

Quarterly results are published in accordance with the guidelines issued by the Securities and Exchange Board of India. The recognition and measurement principles as laid down in the standard are followed with respect to such results. Quarterly financial results are also subjected to a limited financial review by the Auditors as required.

16. AS 26: Intangible Assets:

The Company capitalizes non integral software as intangible assets. The intangible assets are depreciated at the rates applicable to computers in Schedule XIV of the Companies Act, 1956 under the Straight Line Method.

17. AS 28: Impairment of Assets:

The Company makes an assessment on the Balance Sheet date to determine whether there is any indication of impairment in the carrying amount of the Companys fixed assets. If any such indication exists, the recoverable amounts are estimated and an impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount.

18. AS 29: Provisions, Contingent Liabilities and Contingent Assets:

a) Provisions for expenses are made on estimated basis, based upon the judgment of the Company.

b) Contingent Liabilities are not provided for but disclosed in the notes on accounts.

c) There are no contingent assets.


Mar 31, 2010

1. AS 1: Disclosure of accounting policies:

The financial statements are prepared on a going concern concept under the historical cost convention on accrual basis and in accordance with the mandatory accounting standards issued by the Institute of Chartered Accountants of India.

2. AS 2: Valuation of inventories:

Raw Materials, work in progress and stores and spares are valued at cost arrived by applying the first in first out method.

Finished goods are valued at lower of cost and realizable value. Cost for this purpose comprises materials, labour and other appropriate overheads and excise duty.

3. AS 3: Cash flow statements:

Pursuant to the listing agreement with the Stock Exchanges, the Company has attached cash flow statement to the Balance Sheet and the Profit and Loss Account.

4. AS 6: Depreciation accounting:

i. All assets are depreciated on Straight Line Method at the rates prescribed in Schedule XIV of the Companies Act, 1956.

ii. Depreciation is provided for on pro-rata basis on additions and deletions made during the year. Assets costing Rs.5,000/-and below are depreciated in full.

5. AS 9: Revenue Recognition:

Income of the Company is derived from sale of manufactured goods and includes excise duty and is net of sales returns and trade discounts. Domestic sales are recognized on the basis of sales invoices raised. Export sales are recognized on the basis of date of bills of lading. Export benefits, if any, are recognized on post shipment basis.

Interest income/expenses are recognized using the time proportion method based on the rates implicit in the transaction. Dividend income is recognized when the right to receive dividend is established.

6. AS 10: Accounting for fixed assets:

Gross block of fixed assets are shown at the costs of acquisition, which includes taxes, duties (net of CENVAT and VAT input credits availed) and other identifiable direct expenses incurred.

7. AS 11: Accounting for effects in foreign exchange rates:

Transactions are accounted at equivalent rupee values based on exchange rate prevailing on the date of transaction. The difference on account of fluctuation at the rate of exchange prevailing on the date of transaction and the date of realization is treated as revenue.

Foreign currency assets and liabilities are restated at the rates ruling at the year end and the difference recognized in the Profit and Loss Account.

8. AS 13: Accounting for Investments:

All the investments are long term investments. Diminution in respect of long term investments are provided for when there is a permanent diminution in the value of such investments.

Investments are stated at cost. In respect of investments where the realizable value is less than cost, lower value has been adopted.

9. AS 15(revised): Accounting for retirement benefits:

The Company provides for gratuity, a defined benefit retirement plan, covering eligible employees. In accordance with the provisions of the Payment of Gratuity Act, 1972, the Company provides a lump-sum payment to vested employees at retirement, death, incapacitation, or termination of employment, of an amount based on the employees salary and tenure of employment. Liabilities with regard to the retirement plan are determined by an independent actuarial valuation at the balance sheet date, based upon which the Company contributes all the ascertained liabilities to the Companys gratuity fund.

Leave encashment is provided for based on actuarial valuation.

Employees above a certain category are participants in the Companys superannuation fund, for which the Company makes annual contributions based upon their salaries and tenure of employment to a fund maintained by the Life Insurance Corporation of India.

The Company makes its statutory contribution to the Employees Provident Fund to the Employees Provident Fund Organization of the Government of India.

The Company makes contribution to the employees health scheme for those employees governed by the ESI Act.

The Company has adopted the revised accounting standard on employees benefit (AS-15, revised) issued by the Institute of Chartered Accountants of India.

Investment details of plan assets:

The Company contributes the liability as per actuarial valuation to the Companys gratuity fund manager, ICICI Prudential Life Insurance Co. Ltd.

10. AS 16: Borrowing Cost:

Interests on borrowings are capitalized wherever there is substantial period of time between the date of borrowing and date on which the assets are put to use.

11. AS 17: Segment reporting:

The Company operates only in one segment and hence the disclosure requirements of Accounting Standard on Segment reporting ( AS 17) issued by the Institute of Chartered Accountants of India are not applicable.

13. AS 20: Earnings Per Share:

Basic earnings per share are disclosed in the Profit and Loss Account. There is no diluted earning per share as there are no dilutive potential equity shares.

14. AS 22: Accounting for taxes on income:

The Company provides for current taxes at current rates under the provisions of the Income Tax Act, 1961. Disputed taxes are not provided for, but disclosed in the notes on accounts. The Company provides for deferred tax arising on account of temporary and reversible timing differences on account of depreciation, employees benefits and expenditure which are allowed under the Income Tax Act only on payment basis.

15. AS 25: Interim financial reporting:

Quarterly results are published in accordance with the guidelines issued by the Securities and Exchange Board of India. The recognition and measurement principles as laid down in the standard are followed with respect to such results. Quarterly financial results are also subjected to a limited financial review by the Auditors as required.

16. AS 26: Intangible Assets:

The Company capitalizes non integral software as intangible assets. The intangible assets are depreciated at the rates applicable to computers in Schedule XIV of the Companies Act, 1956 under the Straight Line Method.

17. AS 28: Impairment of Assets:

The Company makes an assessment on the Balance Sheet date to determine whether there is any indication of impairment in the carrying amount of the Companys fixed assets. If any such indication exists, the recoverable amounts are estimated and an impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount.

18. AS 29: Provisions, Contingent Liabilities and Contingent Assets:

a) Provisions for expenses are made on estimated basis, based upon the judgment of the Company.

b) Contingent Liabilities are not provided for but disclosed in the notes on accounts.

c) There are no contingent assets.

 
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