Home  »  Company  »  Vidhi Specialty Food  »  Quotes  »  Accounting Policy
Enter the first few characters of Company and click 'Go'

Accounting Policies of Vidhi Specialty Food Ingredients Ltd. Company

Mar 31, 2016

The Company was incorporated on 19th January, 1994 and is engaged in the business of manufacturing and trading in synthetic food colors and trading in chemicals.

1 Significant Accounting Policies:

a. Basis of Preparation of Financial statements:

The financial statements of the Company have been prepared in accordance with Generally Accepted Accounting Principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects the relevant provisions of the Companies Act, 2013 (“the Act”), Accounting Standards notified by the Companies (Accounts) Rules, 2014 and guidelines issued by the Securities and Exchange Board of India (SEBI). The financial statements have been prepared under the historical cost convention on accrual basis. The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

b. Use of Estimates:

Preparation of financial statements in conformity with Indian GAAP requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities on the date of the financial statements. Management believes that the estimates made in the preparation of the financial statements are prudent and reasonable. Actual results could differ from those estimates. Any revision of accounting estimates is recognized prospectively in current and future periods.

c. Revenue Recognition:

Revenue from sale of products is recognized on transfer of all significant risk and rewards of ownership to the customers, which is generally on dispatch of goods. Sales are stated exclusive of sales tax and net of trade and quantity discount.

Dividend Income is recognized when the right to receive the dividend is established. Interest Income is recognized on time proportion basis.

Export incentives / benefits are accounted for on accrual basis on value of exports affected during the year.

d. Inventories:

Inventories comprise all cost of purchase, cost of conversion and other costs including manufacturing overheads incurred in bringing the inventories to their present location and condition.

Inventories are valued at lower of cost and net realizable value on First-In-First-Out basis (FIFO).

Cost of work-in-process and finished goods include material cost, labour cost and manufacturing overheads absorbed on the basis of normal capacity of production.

Excise duty payable on production is accounted for at the time of removal from the factory.

Stores and Spares are charged to the statement of profit and loss in the year of purchase.

e. Fixed Assets and Depreciation:

Fixed Assets are stated at the Historical Cost (Net of CENVAT) of acquisition less accumulated depreciation and amortization. The costs of fixed assets include taxes, duties, freight, borrowing cost and other incidental expenses related to the acquisition and installation of the respective assets.

Depreciation on fixed assets is provided for on the straight-line method (SLM) at the rates and in the manner specified in Schedule II to the Companies Act, 2013.

Leasehold land is amortized over the period of lease.

Capital work-in-progress includes the cost of fixed assets that are not ready to use at the balance sheet date.

f. Foreign Currencies:

Foreign Currency transactions are accounted at the exchange rates prevailing on the date of the transaction. Foreign currency monetary items outstanding at the Balance Sheet date are reported using closing rate. Gains and losses resulting from the settlement of such transactions and translation of monetary assets and liabilities denominated in foreign currencies are recognized in the statement of profit and loss.

g. Investments:

Long Term investments are stated at cost. The diminution in the market value of investments is not considered unless such diminution is considered permanent.

Current investments are carried at the lower of cost and quoted /fair value, computed separately in respect of each category of investments.

h. Employee Benefits:

a. Short-Term Employee Benefits: Recognized as an expense at the undiscounted amount in the statement of profit and loss of the year in which the related service is rendered.

b. Post-Employment Benefits:

i. Defined Contribution Plans: The Company''s approved provident fund scheme is defined contribution plan. The company''s contribution paid / payable under the Employees'' Provident Fund Scheme 1952 is recognized as expenses in the statement of profit and loss during the period in which the employee renders the related service.

ii. Defined Benefit Plans: The Company''s gratuity is defined benefit plan. The present value of obligation under such defined benefit plan is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

The obligation is measured at the present value of the estimated future cash flows. The discount rates used for determining the present value of the obligation under defined benefit plan, is based on the market yields on Government securities as at the balance sheet date. Actuarial gains and losses are recognized immediately in the statement of profit and loss.

i. Earnings Per share:

Basic and diluted earnings per share are computed by dividing the net profit attributable to equity shareholders for the year, by the weighted average number of equity shares outstanding during the year.

j. Taxation:

Direct Taxes:

Provision for current tax is made and retained in accounts on the basis of estimated tax liability as per the applicable provisions of the Income-Tax Act, 1961, after considering MAT Credit available.

Deferred tax resulting from “timing differences” between taxable and accounting income on account of depreciation is accounted for using the tax rates and laws that have been enacted or substantially enacted as on the Balance Sheet date. Deferred tax asset is recognized and carried forward only to the extent that there is a virtual certainty that the asset will be realized in future.

Indirect Taxes:

The liabilities are provided or considered as contingent depending upon the merits of each case and/or receiving the actual demand from the department.

Additional duty on import (ADI) paid on import of chemicals is refundable on fulfillment of certain conditions within a period of 1 year from the Bill of Entry. Therefore Additional duty on import so paid is shown as receivable in financial statements. The duty which is not refundable is charged to profit and loss account.

k. Provision, Contingent Liabilities and Contingent Assets:

Provisions are recognized when the company has a present obligation as a result of past events, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of obligation.

Disclosure for contingent liability is made when there is a present or possible obligation for which it is not probable that there will be an outflow of resources. When there is a present or possible obligation in respect of which the likelihood of outflow of resources is remote, no disclosure is made.

Loss arising from claims, litigation, assessment, fines, penalties, etc. are recorded when it is probable that a liability has been incurred and it can be reasonably estimated.

Contingent Liabilities are not recognized but are disclosed in the notes. There is no contingent liability at the year-end to be disclosed in the notes.

Contingent Assets are neither recognized nor disclosed in the financial statements. l. Impairment of Assets:

An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to the statement of profit and loss in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

i. Rights of Equity shareholders

The Company has only one class of equity shares having a par value of '' 1 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees.

In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

The Shareholders have all other rights as available to equity shareholders as per the provisions of the Companies Act, 2013, read together with the Memorandum of Association and Articles of Association of the Company, as applicable.


Mar 31, 2015

A. Basis of Preparation of Financial Statements:

The financial statements of the Company have been prepared in accordance with Generally Accepted Accounting Principles in India (Indian GAAP), The Company has prepared these financial statements to comply in all material respects the relevant provisions of the Companies Act, 2013 ("the Act"), Accounting Standards notified by the Companies (Accounts) Rules, 2014 andguidelines issued by the Securities and Exchange Board of India (SEBI). The financial statements have been prepared under the historical cost convention on accrual basis.The accounting policies adopted in the preparation of financial statements are consistent with those of previous year,

b. Use of Estimates:

Preparation of financial statements in conformity with Indian GAAP requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities on the date of the financial statements. Management believes that the estimates made in the preparation of the financial statements are prudent and reasonable. Actual results could differ from those estimates. Any revision of accounting estimates is recognised prospectively in current and future periods.

c„ Revenue Recognition:

Revenue from sale of products is recognized on transfer of all significant risk and rewards of ownership to the customers, which is generally on dispatch of goods. Sales are stated exclusive of sales tax and net of trade and quantity discount.

Dividend Income is recognized when toe right to receive the dividend is established. Interest income is recognized on time proportion basis.

Export incen fives/ benefits are accounted for on accrual basis on value of exports affected during the year.

d. Inventories;

Inventories comprise all cost of purchase, cost of conversion and other costs including manufacturing overheads incurred in bringing the inventories to their present location and condition.

Inventories are valued at lowerof cost and net realizable value on First-ln-First-Out basis (FIFO).

Cost of work-in-process and finished goods include material cost, labour cost and manufacturing overheads absorbed on toe basis of normal capacity of production.

Exciseduty payable on production is accounted forat the time of removal from the factory.

Stores and Spares are charged to the statement of profit and loss in the year of purchase.

e. Fixed Assets and Depreciation:

Fixed Assets are stated at the Historical Cost (Net of MODVAT) of acquisition less accumulated depreciation and amortization. the costs of fixed assets Include taxes, duties, freight, borrowlog cost and other incidental expenses related to the acquisition and installation of toe respective assets.

Depreciation on fixed assets is provided for on the straight-line method (SLM)at the rates and in toe manner specified in Schedule II to toe Act,

Leasehold land is amortized over the period of lease.

Capital work-in-progress includes toe cost of fixed assets that are not ready to use at the balance sheet date.

Depreciation on assets acquired! d isposed off during the year has been provided on a pro-rata basis from the date of addition or up to the date of disposal as applicable.

f. Foreign Currencies:

Foreign Currency transactions are accounted at the exchange rates prevailing on the date of the transaction. Foreign currency monetary items outstanding at toe Balance Sheet date are reported using closing rate. Gains and losses resulting from toe settlement of such transactions and translation of monetary assets and liabilities denominated in foreign currencies are recognized in the statement of profit and loss.

g. Investments:

Long Term investments are stated at cost. The diminution in the market value of investments is not considered unless such diminution is considered permanent.

Current investments are earned at the lower of cost and quoted /fair value, computed separately in respect of each category of investments.

h. EmflfoyeeBenefits:

a.Short-Term Employee Benefits:Recoanized as an expense at the undiscounted amount in the statement of profit and loss of the year in which the related service is rendered.

b, Post-Employment Benefits:

I. Defined Contribution Plans:The Company's approved provident fund scheme is defined contribution plan. The company's contribution paid /payable under the Employees' Provident Fund Scheme 1952 is recognized as expenses in the statement of profitand loss during the period in which the employee renders the related service.

II. Defined Benefit Plans:The Company's gratuity is defined benefit plan. The present value of obligation under such defined benefit plan is determined based on actuarial valuation using the Prelected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

The obligation is measured at die present value of the estimated future cash flows. The discount rates used for determining the present value of the obligation under defined benefit plan, is based on the market yields on Government securities as at Uie balance sheet date. Actuarial gains and losses are recognized immediately in the statement of profit and loss.

L Earnings Per Share:

Basic and diluted earnings per share are computed by dividing the net profit attributable to equity shareholders for the year, by the weighted average number of equity shares outstanding during die year.

j. Taxation:

Direct Taxes:

Provision for current tax is made and retained in accounts on the basis of estimated tax liability as per the applicable provisions of the Income-Tax Act, 1961, after considering MAT Credit available.

Provision for wealth tax is made as per the provisions of the Wealth-Tax Act, 1957.

Deferred tax resulting from "timing differences" between taxable and accounting income on account of depreciation is accounted for using the fax rates and laws that have been enacted or substantially enacted as on the Balance Sheet date. Deferred tax asset is recognized and carried forward only to the extent that there is a virtual certainty that the asset will be realized in future.

The liabilities are provided or considered as contingent depending upen the malts of each case and/or receiving the actual demand from the department

Additional dutyon import (ADI) paid on importof chemicals is refondableon fulfillment of certain conditions within a period of 1 year from the Bill of Entry. Therefore Additional duty on import so paid is shown as receivable in financial. the duty which is not refundable is charged to profitand loss account.

k. Provision. Contingent Liabilities and Contingent Assets:

Provisions are recognized when the company has a present obligation as a result of past events, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of tire amount of obligation.

Disclosure for contingent liability is made when there is a present or possible obligation for which it is not probable that there will be an outflow of resources. When there is a present or possible obligation in respect of which the likelihood of outflow of resources is remote, no disclosure is made.

Loss arising from claims, litigation, assessment, fines, penalties, etc. are recorded when it is probable that a liability has been incurred and it can be reasonably estimated.

Contingent Liabilities are not recognized but are disclosed in the notes.

Contingent Assets are neither recognized nor disclosed in the financial statements.

l. Impairment of Assets:

An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to the statement of profit and loss in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.


Mar 31, 2014

A. Basis of preparation of Financial Statements

The financial statements are prepared and presented underthe historical cost convention, on accrual basis of accounting in accordance with the accounting principles generally accepted in India and comply with the accounting standards specified in the Companies (Accounting Standards) Rules 2006, and relevant provisions of Companies Act, 1956 to the extent applicable.

b. Use of Estimates

The preparation of financial statements is in conformity with generally accepted accounting principles (''GAAP'') requires management to make estimates and assumptions that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and the estimates are recognized in the period in which the results are known /materialized.

c. Revenue recognition

Revenue from sale of products is recognized on transfer of all significant risk and rewards of ownership to the customers, which is generally on dispatch of goods. Sales are stated exclusive of sales tax and net of trade and quantity discount. Dividend Income is recognized when the right to receive the dividend is established. Interest Income is recognized on time proportion basis. Export incentives / benefits are accounted for on accrual basis on value of exports affected during the year.

d. Inventories

Inventories comprise all cost of purchase, cost of conversion and other costs including manufacturing overheads incurred in bringing the inventories to their present location and condition.

Inventories are valued at lower of cost and net realizable value on First-ln-First-Out basis (FIFO). Cost of work-in-process and finished goods include material cost, labour cost and manufacturing overheads absorbed on the basis of normal capacity of production.

Excise duty payable on production is accounted for at the time of removal from the factory. Stores and Spares are charged to the statement of profit and loss in the year of purchase.

e. Fixed Assets and Depreciation

Fixed Assets are stated at the Historical Cost (Net of MODVAT) of acquisition less accumulated depreciation and amortization. The costs of fixed assets include taxes, duties, freight, borrowing cost and other incidental expenses related to the acquisition and installation of the respective assets.

Depreciation on fixed assets is provided for on the straight-line method (SLM) at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956.

Leasehold land is amortized overthe period of lease.

Capital work-in-progress includes the cost of fixed assets that are not ready to use at the balance sheet date.

f. Inventories

Inventories comprise all cost of purchase, cost of conversion and other costs including manufacturing overheads incurred in bringing the inventories to their present location and condition.

Inventories are valued at lower of cost and net realizable value on First-ln-First-Out basis (FIFO).

Cost of work-in-process and finished goods include material cost, labour cost and manufacturing overheads absorbed on the basis of normal capacity of production.

Excise duty payable on production is accounted for at the time of removal from the factory.

Stores and Spares are charged to the statement of profit and loss in the year of purchase.

g. Fixed Assets and Depreciation

Fixed Assets are stated at the Historical Cost (Net of MODVAT) of acquisition less accumulated depreciation and amortization. The costs of fixed assets include taxes, duties, freight, borrowing cost and other incidental expenses related to the acquisition and installation of the respective assets. Depreciation on fixed assets is provided for on the straight-line method (SLM) at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956. Leasehold land is amortized over the period of lease.Capital workin- progress includes the cost of fixed assets that are not ready to use at the balance sheet date.

h. Foreign currencies

Foreign Currency transactions are accounted at the exchange rates prevailing on the date of the transaction. Foreign currency monetary items outstanding at the Balance Sheet date are reported using closing rate. Gains and losses resulting from the settlement of such transactions and translation of monetary assets and liabilities denominated in foreign currencies are recognized in the statement of profit and loss.

i. Investments

Long Term investments are stated at cost. The diminution in the market value of investments is not considered unless such diminution is considered permanent. Current investments are carried at the lower of cost and quoted /fair value, computed separately in respect of each category of investments.

j. Employee benefits

a. Short-term employee benefits: Recognized as an expense at the undiscounted amount in the statement of profit and loss of the year in which the related service is rendered.

b. Post-employment benefits:

i. Defined Contribution Plans: The Company''s approved provident fund scheme is defined contribution plan. The company''s contribution paid / payable underthe Employees'' Provident FundScheme 1952 is recognized as expenses in the statement of profit and loss during the period in which the employee renders the related service.

ii. Defined Benefit Plans: The Company''s gratuity is defined benefit plan. The present value of obligation under such defined benefit plan is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

The obligation is measured at the present value of the estimated future cash flows. The discount rates used for determining the present value of the obligation under defined benefit plan, is based on the market yields on Government securities as at the balance sheet date. Actuarial gains and losses are recognized immediately in the statement of profit and loss.

k. Earnings per share

Basic and diluted earnings per share are computed by dividing the net profit attributable to equity shareholders for the year, by the weighted average number of equity shares outstanding during the year.

l. Taxation

Direct Taxes

Provision for current tax is made and retained in accounts on the basis of estimated tax liability as per the applicable provisions of the Income-Tax Act, 1961, after considering MAT Credit available. Provision for wealth tax is made as per the provisions of the Wealth-Tax Act, 1957. Deferred tax resulting from "timing differences" between taxable and accounting income on account of depreciation is accounted for using the tax rates and laws that have been enacted or substantially enacted as on the Balance Sheet date. Deferred tax asset is recognized and carried forward only to the extent that there is a virtual certainty that the asset will be realized in future.

IndirectTaxes

The liabilities are provided or considered as contingent depending upon the merits of each case and/or receiving the actual demand from the department.

Additional dutyon import (ADI) paid on import of chemicals is refundable on fulfillment of certain conditions within a period of 1 year from the Bill of Entry. Therefore Additional duty on import so paid is shown as receivable in financial. The duty which is not refundable is charged to profit and loss account.

m. Provision, Contingent Liabilities and Contingent Assets

Provisions are recognized when the company has a present obligation as a result of past events, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of obligation.

Disclosure for contingent liability is made when there is a present or possible obligation for which it is not probable that there will be an outflow of resources. When there is a present or possible obligation in respect of which the likelihood of outflow of resources is remote, no disclosure is made.

Loss arising from claims, litigation, assessment, fines, penalties, etc. are recorded when it is probable that a liability has been incurred and it can be reasonably estimated.

Contingent Liabilities are not recognized but are disclosed in the notes.

Contingent Assets are neither recognized nor disclosed in the financial statements.

N. Impairment of Assets

An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to the statement of profit and loss in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.


Mar 31, 2013

A. Basis of preparation of Financial Statements

The financial statements are prepared and presented under the historical cost convention, on accrual basis of accounting in accordance with the accounting principles generally accepted in India and comply with the accounting standards specified in the Companies (Accounting Standards) Rules 2006, and relevant provisions of Companies Act, 1956 to the extent applicable.

b. Use of Estimates

The preparation of financial statements is in conformity with generally accepted accounting principles (''GAAP'') requires management to make estimates and assumptions that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and the estimates are recognized in the period in which the results are known /materialized.

c. Revenue recognition

Revenue from sale of products is recognized on transfer of all significant risk and rewards of ownership to the customers, which is generally on dispatch of goods. Sales are stated exclusive of sales tax and net of trade and quantity discount.

Dividend Income is recognized when the right to receive the dividend is established.

Interest Income is recognized on time proportion basis.

Export incentives / benefits are accounted for on accrual basis on value of exports affected during the year.

d. Inventories

Inventories comprise all cost of purchase, cost of conversion and other costs including manufacturing overheads incurred in bringing the inventories to their present location and condition.

Inventories are valued at lower of cost and net realizable value on First-In-First-Out basis (FIFO).

Cost of work-in-process and finished goods include material cost, labour cost and manufacturing overheads absorbed on the basis of normal capacity of production.

Excise duty payable on production is accounted for at the time of removal from the factory.

Stores and Spares are charged to the statement of profit and loss in the year of purchase.

e. Fixed Assets and Depreciation

Fixed Assets are stated at the Historical Cost (Net of MODVAT) of acquisition less accumulated depreciation and amortization. The costs of fixed assets include taxes, duties, freight, borrowing cost and other incidental expenses related to the acquisition and installation of the respective assets.

Depreciation on fixed assets is provided for on the straight-line method (SLM) at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956.

Leasehold land is amortized over the period of lease.

Capital work-in-progress includes the cost of fixed assets that are not ready to use at the balance sheet date.

f. Foreign currencies

Foreign Currency transactions are accounted at the exchange rates prevailing on the date of the transaction. Foreign currency monetary items outstanding at the Balance Sheet date are reported using closing rate. Gains and losses resulting from the settlement of such transactions and translation of monetary assets and liabilities denominated in foreign currencies are recognized in the statement of profit and loss.

g. Investments

Long Term investments are stated at cost. The diminution in the market value of investments is not considered unless such diminution is considered permanent.

Current investments are carried at the lower of cost and quoted /fair value, computed separately in respect of each category of investments.

h. Employee benefits

a. Short-term employee benefits: Recognized as an expense at the undiscounted amount in the statement of profit and loss of the year in which the related service is rendered.

b. Post-employment benefits:

i. Defined Contribution Plans: The Company''s approved provident fund scheme is defined contribution plan. The company''s contribution paid / payable under the Employees'' Provident FundScheme 1952 is recognized as expenses in the statement of profit and loss during the period in which the employee renders the related service.

ii. Defined Benefit Plans: The Company''s gratuity is defined benefit plan. The present value of obligation under such defined benefit plan is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

The obligation is measured at the present value of the estimated future cash flows. The discount rates used for determining the present value of the obligation under defined benefit plan, is based on the market yields on Government securities as at the balance sheet date. Actuarial gains and losses are recognized immediately in the statement of profit and loss.

i. Earnings per share

Basic and diluted earnings per share are computed by dividing the net profit attributable to equity shareholders for the year, by the weighted average number of equity shares outstanding during the year.

j. Taxation

Direct Taxes

Provision for current tax is made and retained in accounts on the basis of estimated tax liability as per the applicable provisions of the Income-Tax Act, 1961, after considering MAT Credit available.

Provision for wealth tax is made as per the provisions of the Wealth-Tax Act, 1957.

Deferred tax resulting from "timing differences" between taxable and accounting income on account of depreciation is accounted for using the tax rates and laws that have been enacted or substantially enacted as on the Balance Sheet date. Deferred tax asset is recognized and carried forward only to the extent that there is a virtual certainty that the asset will be realized in future.

Indirect Taxes

The liabilities are provided or considered as contingent depending upon the merits of each case and/or receiving the actual demand from the department.

k. Provision, Contingent Liabilities and Contingent Assets

Provisions are recognized when the company has a present obligation as a result of past events, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of obligation.

Disclosure for contingent liability is made when there is a present or possible obligation for which it is not probable that there will be an outflow of resources. When there is a present or possible obligation in respect of which the likelihood of outflow of resources is remote, no disclosure is made.

Loss arising from claims, litigation, assessment, fines, penalties, etc. are recorded when it is probable that a liability has been incurred and it can be reasonably estimated.

Contingent Liabilities are not recognized but are disclosed in the notes.

Contingent Assets are neither recognized nor disclosed in the financial statements.

l. Impairment of Assets

An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to the statement of profit and loss in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.


Mar 31, 2012

A) Basis of preparation of Financial Statements

The financial statements are prepared and presented under the historical cost convention, on accrual basis of accounting in accordance with the accounting principles generally accepted in India and comply with the accounting standards specified in the Companies (Accounting Standards) Rules 2006, and relevant provisions of Companies Act, 1956 to the extent applicable.

b) Use of Estimates

The preparation of financial statements is in conformity with generally accepted accounting principles ('GAAP') requires management to make estimates and assumptions that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and the estimates are recognized in the period in which the results are known /materialized.

c) REVENUE RECOGNITION

Revenue from sale of products is recognized on transfer of all significant risk and rewards of ownership to the customers, which is generally on dispatch of goods. Sales are stated exclusive of sales tax and net of trade and quantity discount.Dividend Income is recognized when the right to receive the dividend is established. Interest Income is recognized on time proportion basis.Export incentives / benefits are accounted for on accrual basis on value of exports affected during the year.

d) INVENTORIES

Inventories comprise all cost of purchase, cost of conversion and other costs including manufacturing overheads incurred in bringing the inventories to their present location and condition.Inventories are valued at lower of costand net realizable value on First-In-First- Out basis (FIFO). Cost of work-in-process and finished goods include material cost, labour cost and manufacturing overheads absorbed on the basis of normal capacity of production. Excise duty payable on production is accounted for at the time of removal from the factory. Stores and Spares are charged to the statement of profit and loss in the year of purchase.

e) FIXED ASSETS AND DEPRECIATION

Fixed Assets are stated at the Historical Cost (Net of MODVAT) of acquisition less accumulated depreciation and amortisation. The costs of fixed assets include taxes, duties, freight, borrowing cost and other incidental expenses related to the acquisition and installation of the respective assets. Depreciation on fixed assets is provided for on the straight-line method (SLM) at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956. Leasehold land is amortized over the period of lease. Capital work- in-progress includes the cost of fixed assets that are not ready to use at the balance sheet date.

f) FOREIGN CURRENCIES

Foreign Currency transactions are accounted at the exchange rates prevailing on the date of the transaction. Foreign currency monetary items outstanding at the Balance Sheet date are reported using closing rate. Gains and losses resulting from the settlement of such transactions and translation of monetary assets and liabilities denominated in foreign currencies are recognized in the statement of profit and loss.

g) INVESTMENTS

Long Term investments are stated at cost. The diminution in the market value of investments is not considered unless such diminution is considered permanent. Current investments are carried at the lower of cost and quoted /fair value, computed separately in respect of each category of investments.

h) EMPLOYEE BENEFITS

a. Short-term employee benefits: Recognized as an expense at the undiscounted amount in the statement of profit and loss of the year in which the related service is rendered.

b. Post-Employment Benefits:

i. Defined Contribution Plans: The Company's approved provident fund scheme is defined contribution plan. The company's contribution paid / payable under the Employees' Provident Fund Scheme 1952 is recognized as expenses in the statement of profit and loss during the period in which the employee renders the related service.

ii. Defined Benefit Plans: The Company's gratuity is defined benefit plan. The present value of obligation under such defined benefit plan is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation is measured at the present value of the estimated future cash flows. The discount rates used for determining the present value of the obligation under defined benefit plan, is based on the market yields on Government securities as at the balance sheet date. Actuarial gains and losses are recognized immediately in the statement of profit and loss.

i) EARNINGS PER SHARE

Basic and diluted earnings per share are computed by dividing the net profit attributable to equity shareholders for the year, by the weighted average number of equity shares outstanding during the year.

j) TAXATION

Direct Taxes

Provision for current tax is made and retained in accounts on the basis of estimated tax liability as per the applicable provisions of the Income-TaxAct, 1961.

Deferred tax resulting from "timing differences" between taxable and accounting income is accounted for using the tax rates and laws that have been enacted or substantially enacted as on the Balance Sheet date. Deferred tax asset is recognized and carried forward only to the extent that there is a virtual certainty that the asset will be realized in future.

Indirect Taxes

The liabilities are provided or considered as contingent depending upon the merits of each case and/or receiving the actual demand from the department.

k) PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Provisions are recognized when the company has a present obligation as a result of past events, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of obligation.

Disclosure for contingent liability is made when there is a present or possible obligation for which it is not probable that there will be an outflow of resources. When there is a present or possible obligation in respect of which the likelihood of outflow of resources is remote, no disclosure is made.

Loss arising from claims, litigation, assessment, fines, penalties, etc, are recorded when it is probable that a liability has been incurred and it can be reasonably estimated.

Contingent Liabilities are not recognized but are disclosed in the notes.

Contingent Assets are neither recognized nor disclosed in the financial statements.

I) IMPAIRMENT OF ASSETS

An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to the statement of profit and loss in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.


Mar 31, 2010

A. Basis of preparation of Financial Statements

The financial statements are prepared and presented under the historical cost convention, on accrual basis of accounting in accordance with the accounting principles generally accepted in India and comply with the accounting standards specified in the Companies (Accounting Standards) Rules 2006, issued by the Central Government, in consultation with National Advisory Committee on Accounting Standards and relevant provisions of Companies Act, 1956 (‘the Act’), to the extent applicable. The major accounting policies are detailed hereunder.

b. Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles (‘GAAP’) requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and the disclosure of contingent liabilities on the date of the financial statements Difference between the actual results and the estimates are recognized in the period in which the results are known /materialized.

c. Revenue recognition

Revenue from sale of products is recognized on transfer of all significant risk and rewards of ownership of the products on to the customers, which is generally on dispatch of goods. Sales are stated exclusive of sales tax and net of trade and quantity discount.

Dividend Income is recognized when the right to receive the dividend is established.

Interest Income is recognized on the time proportion basis.

Export turnover include exchange rate difference arising on realisation.

Export incentives / benefits are accounted for on accrual basis on value of exports affected during the year.

d. Inventories

Inventories comprise all costs of purchase, conversion and other costs incurred in bringing the inventories to their present location and condition.

Inventories are valued at lower of cost or net realizable value on First-in-First-basis (FIFO).

Cost of work-in-process and finished goods include material cost, labour cost and manufacturing overheads absorbed on the basis of normal capacity of production. Excise duty payable on production is accounted for at the time of removal from the factory.

Stores and Spares are charged to the profit and loss account in the year of purchase.

e. Fixed Assets and Depreciation

Fixed assets are stated at the historical cost (Net of MODVAT) of acquisition less accumulated depreciation. The costs of fixed assets include taxes, duties, freight and other incidental expenses related to the acquisition and installation of the respective assets.

Depreciation on fixed assets is provided for on the straight-line method at the rates and in the manner specified in schedule xiv to the companies act, 1956.

Leasehold land is amortized over the period of lease.

Capital work-in-progress includes the cost of fixed assets that are not ready to use at the balance sheet date and advances paid to acquire capital assets before the balance sheet date.

f. Foreign currencies

Foreign Currency transactions are accounted at the exchange rates prevailing on the date of the transaction. Foreign currency monetary items outstanding as at the Balance sheet are reported using the closing rate. Gains and losses resulting from the settlement of such transactions and translation of monetary assets and liabilities denominated in foreign currencies are recognized in the profit and loss account.

g. Investments

Long Term investments are stated at cost. The diminution in the market value of investments is not considered unless such diminution is considered permanent.

Current investments are carried at the lower of cost or quoted /fair value, computed separately in respect of each category of investments.

h. Retirement benefits

a. Post-employment benefits

i. Defined Contribution Plans: The Company’s approved provident fund scheme is defined benefit plan. The Company’s contribution paid / payable under the scheme is recognized as expenses in the profit and loss account during the period in which the employee renders the related service.

ii. Defined Benefit Plans: The Company’s gratuity is defined benefit plan. The present value of obligation under such defined benefit plan is determined based in actuarial valuation using the projected unit credit method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

The obligation is measured at the present value of the estimated future cash flows. The discount rates used for determining the present value of the obligation under defined benefit plan, is based on the market yields on Government securities as at the balance sheet date.

Actuarial gains and losses are recognized immediately in the profit and loss account.

i. Earnings per share

Basic and diluted earnings per share are computed by dividing the net profit attributable to equity shareholders for the year, by the weighted average number of equity shares outstanding during the year.

j. Taxation

Direct Taxes

Provision for current tax is made and retained in accounts on the basis of estimated tax liability as per the applicable provisions of the Income-Tax Act, 1961.

Deferred tax for timing differences of depreciation between tax profits and book profits is accounted for using the tax rates and laws that have been enacted or substantially enacted as of the balance sheet date. Deferred tax assets are not recognized as the differences are pertaining to depreciation.

Indirect taxes

The liabilities are provided or considered as contingent depending upon the merits of each case and/or receiving the actual demand from the department

k. Provision, contingent liabilities and contingent assets

Provisions comprise liabilities of uncertain timing or amount. Provisions are recognized when the Company recognizes it has a present obligation as a result of past events, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

Disclosures for contingent liability are made when there is a possible or present obligation for which it is not probable that there will be an outflow of resources. When there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no disclosure is made.

Loss contingencies arising from claims, litigation, assessment, fines, penalties, etc. are recorded when it is probable that a liability has been incurred and the can be reasonably estimated.

Contingent liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognized nor disclosed in the financial statements.

Find IFSC