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Accounting Policies of Vijay Textiles Ltd. Company

Mar 31, 2015

1. BASIS OF ACCOUNTING

The financial statements of Vijay Textiles Limited (VTL) or Company have been prepared with Generally Accepted Accounting Principles (GAAP) in India under the historical cost convention on the basis of a going concern with revenues recognized and expenses accounted on their accrual.

2. FIXED ASSETS

Fixed Assets are stated at cost, less accumulated depreciation. All expenditure of capital nature is capitalized. Such expenditure comprises of purchase price, import duties, levies (other than refundable) and any directly attributable cost of bringing the assets to their working condition for intended use. All assets costing individually Rs. 5,000/- and below are depreciated fully in the year of purchase.

3. DEPRECIATION

Depreciation is provided under straight line method on the basis of life of the assets as prescribed under Schedule II to the Companies Act, 2013.

4. GOVERNMENT GRANTS

Grants and subsidies are recognized when there is a reasonable assurance that the grant or subsidy will be received and that all the underlying conditions will be complied with. Grants and subsidies received during the year related to specific fixed assets are shown as deduction from the gross value of the asset concerned.

5. REVENUE RECOGINITION

Revenue recognised only when it can be reliably measured and it is reasonable to expect ultimate collection. Revenue from operation includes sale of goods and the same is recognised on transfer of significant risk and rewards.

6. LEASES

a) Rentals applicable to operating leases where substantially all of the benefits and risks of ownership remain with the lessor are charged against profits as per the terms of the lease agreement over the lease period.

b) Assets created on the leasehold property are depreciated over the period of the lease.

7. INVENTORIES

Raw Materials, Stores & Spares and Work in Process are valued at cost or net realizable value whichever is lower using FIFO cost method. Finished Goods are valued at cost or net realizable Value, whichever is lower. Net realizable value is the estimated selling value in the ordinary course of business less estimated cost of completion and estimated cost necessary to make sale and cost comprises cost of material purchased and expenditure incurred in the normal course of business in bringing such inventories to its location and includes, where applicable, appropriate overheads based on normal level of activity.

8. RETIREMENT BENEFITS

a) Defined Contribution Plan:

Contribution as per the Employee's Provident Fund and Miscellaneous Provisions Act,1952 towards Provident Fund and Family Pension Fund are provided for and payments in respect thereof are made to the relevant authorities on actual basis.

b) Defined Benefit Plan:

Gratuity: In accordance with applicable Indian laws, the Company provides gratuity, a defined benefit retirement plan (Gratuity Plan) covering all employees. The gratuity Plan provides a lump sum payment to vested employees, at retirement or termination of employment, an amount based on the respective employee's last drawn salary and the years of employment with the Company. Liability with regard to Gratuity Plan is accrued based on actuarial valuation at the balance Sheet date. Liability for Leave Encashment is treated as a Short-term liability and is accounted for as per the rules of the Company in force.

9. FOREIGN CURRENCY TRANSACTIONS

Revenue transactions in foreign currency are recorded at the exchange rates prevailing on the dates when the relevant transactions take place. The Company recognizes gains/losses on foreign exchange rate fluctuations relating to current assets and current liabilities at the end of the year.

10. BORROWING COSTS

Borrowing costs, which are directly attributable to the acquisition/construction of fixed assets, till the time such assets are ready for intended use, are capitalized as part of the costs of such assets. Other Borrowing costs are recognized as expenses in the year in which they are incurred.

11. TAXATION

a) Current year Charge:

The provision for taxation is based on assessable profits of the Company as determined under the Income Tax Act, 1961.

b) Deferred Tax:

The Company is providing and recognizing deferred tax on timing differences between taxable income and accounting income subject to consideration of prudence.

12. IMPAIRMENT OF ASSETS

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

13. CONTINGENT LIABILITIES-PROVISIONS AND CONTINGENT ASSETS:

Contingent liabilities arising from claims, litigation, assessment, etc., are provided for when it is probable that a liability may be incurred and the amount can be reliably estimated.


Mar 31, 2014

1. BASIS OF ACCOUNTING

The financial statements of Vijay Textiles Limited (VTL or Company) have been prepared with Generally Accepted Accounting Principles (GAAP) in India under the historical cost convention on the basis of a going concern with revenues recognized and expenses accounted on their accrual.

2. FIXED ASSETS

Fixed Assets are stated at cost,less accumulated depreciation. All expenditure of capital nature is capitalized. Such expenditure comprises of purchase price, import duties, levies and any directly attributable cost of bringing the assets to their working condition for intended use. All assets costing individually Rs. 5,000/- and below are depreciated fully in the year of purchase.

3. DEPRECIATION

Depreciation is provided under the Straight Line Method at rates prescribed under Schedule XIV to the Companies Act, 1956.

4. GOVERNMENT GRANTS

Grants and subsidies are recognized when there is a reasonable assurance that the grant or subsidy will be received and that all the underlying conditions will be complied with. Grants and subsidies received during the year related to specific fixed assets are shown as deduction from the gross value of the asset concerned.

5. REVENUE RECOGINITION

Revenue recognised only when it can be reliably measured and it is reasonable to expect ultimate collection. Revenue from operation includes sale of goods and the same is recognised on transfer of significant risk and rewards.

6. LEASES

a) Rentals applicable to operating leases where substantially all of the benefits and risks of ownership remain with the lessor are charged against profits as per the terms of the lease agreement over the lease period.

b) Assets created on the leasehold property are depreciated over the period of the lease.

7. INVENTORIES

Raw Materials, Stores & Spares and Work in Process are valued at cost or net realizable value whichever is lower using FIFO cost method. Finished Goods are valued at cost or net realizable Value, whichever is lower. Net realizable value is the estimated selling value in the ordinary course of business less estimated cost of completion and estimated cost necessary to make sale and cost comprises cost of material purchased and expenditure incurred in the normal course of business in bringing such inventories to its location and includes, where applicable, appropriate overheads based on normal level of activity.

8. RETIREMENT BENEFITS

a) Defined Contribution Plan:

Contribution as per the Employee''s Provident Fund and Miscellaneous Provisions Act,l962 towards Provident Fund and Family Pension Fund are provided for and payments in respect thereof are made to the relevant authorities on actual basis.

b) Defined Benefit Plan:

Gratuity: In accordance with applicable Indian laws, the Company provides gratuity,a defined benefit retirement plan (Gratuity Plan) covering all employees.The gratuity Plan provides a lump sum payment to vested employees, at retirement or termination of employment, an amount based on the respective employee''s last drawn salary and the years of employment with the Company. Liability with regard to Gratuity Plan is accrued based on actuarial valuation at the balance Sheet date. Liability for Leave Encashment is treated as a Short-term liability and is accounted for as per the rules of the Company in force.

9. FOREIGN CURRENCY TRANSACTIONS

Revenue transactions in foreign currency are recorded at the exchange rates prevailing on the dates when the relevant transactions take place. The Company recognizes gains/losses on foreign exchange rate fluctuations relating to current assets and current liabilities at the end of the year.

10. BORROWING COSTS

Borrowing costs, which are directly attributable to the acquisition/construction of fixed assets, till the time such assets are ready for intended use, are capitalized as part of the costs of such assets. Other Borrowing costs are recognized as expenses in the year in which they are incurred.

1 1. TAXATION

a) Current year Charge:

The provision for taxation is based on assessable profits of the Company as determined under the Income Tax Act, 1961.

b) Deferred Tax:

The Company is providing and recognizing deferred tax on timing differences between taxable income and accounting income subject to consideration of prudence.

12. IMPAIRMENT OF ASSETS

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

13. CONTINGENT LIABILITIES-PROVISIONS AND CONTINGENT ASSETS:

Contingent liabilities arising from claims, litigation, assessment, etc., are provided for when it is probable that a liability may be incurred and the amount can be reliably estimated.


Mar 31, 2013

1. BASIS OF ACCOUNTING

The financial statements of Vijay Textiles Limited (VTL or Company) have been prepared with Generally Accepted Accounting Principles (GAAP) in India under the historical cost convention on the basis of a going concern with revenues recognized and expenses accounted on their accrual.

2. FIXED ASSETS

Fixed Assets are stated at cost, less accumulated depreciation. All expenditure of capital nature is capitalized. Such expenditure comprises of purchase price, import duties, levies and any directly attributable cost of bringing the assets to their working condition for intended use. Depreciation is provided under the Straight Line Method at rates prescribed under Schedule XIV to the Companies Act, 1956.

3. GOVERNMENT GRANTS

Grants and subsidies are recognized when there is a reasonable assurance that the grant or subsidy will be received and that all the underlying conditions will be complied with. Grants and subsidies received during the year related to specific fixed assets are shown as deduction from the gross value of the asset concerned.

4. REVENUE RECOGINITION

Revenue recognised only when it can be reliably measured and it is reasonable to expect ultimate collection. Revenue from operation includes sale of goods and the same is recognised on transfer of significant risk and rewards

5. LEASES

a) Rentals applicable to operating leases where substantially all of the benefits and risks of ownership remain with the lessor are charged against profits as per the terms of the lease agreement over the lease period.

b) Assets created on the leasehold property are depreciated over the period of the lease.

6. INVENTORIES

Raw Materials, Stores & Spares and Work in Process are valued at cost or net realizable value whichever is lower using FIFO cost method. Finished Goods are valued at cost or net realizable Value, whichever is lower. Net realizable value is the estimated selling value in the ordinary course of business less estimated cost of completion and estimated cost necessary to make sale.

7. RETIREMENT BENEFITS

a) Defined Contribution Plan:

Contribution as per the Employee''s Provident Fund and Miscellaneous Provisions Act, 1962 towards Provident Fund and Family Pension Fund are provided for and payments in respect thereof are made to the relevant authorities on actual basis.

b) Defined Benefit Plan:

Gratuity: In accordance with applicable Indian laws, the Company provides gratuity, a defined benefit retirement plan (Gratuity Plan) covering all employees. The gratuity Plan provides a lump sum payment to vested employees, at retirement or termination of employment, an amount based on the respective employee''s last drawn salary and the years of employment with the Company. Liability with regard to Gratuity Plan is accrued based on actuarial valuation at the balance Sheet date. Liability for Leave Encashment is treated as a Short-term liability and is accounted for as per the rules of the company in force.

8. FOREIGN CURRENCY TRANSACTIONS

Revenue transactions in foreign currency are recorded at the exchange rates prevailing on the dates when the relevant transactions take place. The Company recognizes gains/losses on foreign exchange rate fluctuations relating to current assets and current liabilities at the end of the year.

9. BORROWING COSTS

Borrowing costs, which are directly attributable to the acquisition/construction of fixed assets, till the time such assets are ready for intended use, are capitalized as part of the costs of such assets. Other Borrowing costs are recognized as expenses in the year in which they are incurred.

10. TAXATION

a) Current year Charge:

The provision for taxation is based on assessable profits of the Company as determined under the Income Tax Act, 1961.

b) Deferred Tax:

The Company is providing and recognizing deferred tax on timing differences between taxable income and accounting income subject to consideration of prudence.

11. IMPAIRMENT OF ASSETS

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

12. CONTINGENT LIABILITIES-PROVISIONS AND CONTINGENT ASSETS:

Contingent liabilities arising from claims, litigation, assessment, etc., are provided for when it is probable that a liability may be incurred and the amount can be reliably estimated.


Mar 31, 2012

1. BASIS OF ACCOUNTING

The financial statements of Vijay Textiles Limited (VTL or Company) have been prepared with Generally Accounting Principles in India (GAAP) under the historical cost convention on the basis of a going concern with revenues recognized and expenses accounted on their accrual.

2. FIXED ASSETS

Fixed Assets are stated at cost, less accumulated depreciation. All expenditure of capital nature is capitalized. Such expenditure comprises of purchase price, import duties, levies and any directly attributable cost of bringing the assets to their working condition for intended use. Depreciation is provided under the Straight Line Method at rates prescribed under Schedule XIV to the Companies Act, 1956.

3. GOVERNMENT GRANTS

Grants and subsidies are recognized when there is a reasonable assurance that the grant or subsidy will be received and that all the underlying conditions will be complied with. Grants and subsidies received during the year related to specific fixed assets is shown as deduction from the gross value of the asset concerned.

4. LEASES

a) Rentals applicable to operating leases where substantially all of the benefits and risks of ownership remain with the lessor are charged against profits as per the terms of the lease agreement over the lease period.

b) Assets created on the leasehold property are depreciated over the period of the lease.



5. INVESTMENTS

Long-term investments are stated at cost, and provision is made when there is a decline, other than temporary in the carrying value of such investments.

6. INVENTORIES

Raw Materials, Stores & Spares and Work in Process are valued at cost or net realizable value whichever is lower using FIFO cost method. Finished Goods are valued at cost or net realizable Value, whichever is lower.Net realizable value is the estimated selling value in the ordinary course of business, less estimated cost of completion and estimated cost necessary to make sale.

7. RETIREMENT BENEFITS

a) Defined Contribution Plan:

Contribution as per the Employee's Provident Funds and Miscellaneous Provisions Act, 1962 towards Provident Fund and Family Pension Fund are provided for and payments in respect thereof are made to the relevant authorities on actual basis.

b) Defined Benefit Plan:

Gratuity: In accordance with applicable Indian laws, the Company provides gratuity, a defined benefit retirement plan (Gratuity Plan) covering all employees. The gratuity Plan provides a lump sum payment to vested employees, at retirement or termination of employment, an amount based on the respective employee's last drawn salary and the years of employment with the Company. Liability with regard to Gratuity Plan is accrued based on actuarial valuation at the balance Sheet date. Liability for Leave Encashment is treated as a Short term liability and is accounted for as per the rules of the company in force.

8. FOREIGN CURRENCY TRANSACTIONS

Revenue transactions in foreign currency are recorded at the exchange rates prevailing on the dates when the relevant transactions took place .The Company recognizes gains/losses on foreign exchange rate fluctuation relating to current assets and current liabilities at the year end.

9. BORROWING COSTS

Borrowing Costs which are directly attributable to the acquisition/ construction of fixed assets, till the time such assets are ready for intended use, are capitalized as part of the costs of such assets. Other Borrowing costs are recognized as expenses in the year in which they are incurred.



10. TAXATION

a) Current year Charge:

The provision for taxation is based on assessable profits of the Company as determined under the Income Tax Act; 1961.

b) Deferred Tax:

The Company is providing and recognizing deferred tax on timing differences between taxable income and accounting income subject to consideration of prudence.

11. IMPAIRMENT OF ASSETS

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

12. CONTINGENT LIABILITIES- PROVISIONS AND CONTINGENT ASSETS:

Contingent liabilities arising from claims, litigation, assessment, etc are provided for when it is probable that a liability may be incurred and the amount can be reliably estimated.


Mar 31, 2011

1. We have audited the attached Balance Sheet of VIJAY TEXTILES LIMITED as at 31.03.2011, the Profit & Loss Account and the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's Management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards required that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes, examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors' Report) Order, 2003, issued by the Central Government of India in terms of Sub-section (4A) of Section 227 of the Companies Act, 1956 of India, we enclose in the Annexure, a statement on the matters specified in paragraphs 4 & 5 of the said Order.

4. Further to our comments in the Annexure referred to above, we report that:

a. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit;

b. In our opinion, proper books of accounts as required by law have been kept by the Company so far as appears from our examination of those books;

c. The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of accounts;

d. In our opinion, the Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in Sub-Section (3C) of Section 211 of the Companies Act, 1956;

e. On the basis of written representations received from the Directors, as on 31.03.2011 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31.03.2011 from being appointed as a Director in terms of Clause (g) of Sub-Section (1) of Section 274 of the Companies Act, 1956;

f. In our opinion and to the best of our information and according to the explanations given to us; the said accounts read together with the accounting policies and notes forming part of accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

i. in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2011; ii. in the case of the Profit & Loss Account, the Profit for the year ended on that date; and iii. in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

ANNEXURE TO THE AUDITORS' REPORT : Re : VIJAY TEXTILES LIMITED [referred to in paragraph 3 of our report of even date]

(i) a. The Company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets.

b. All the assets have not been physically verified by the Management during the year but there is a regular programme of verification, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

c. During the year few fixed assets have been disposed off by the Company. On the basis of information and explanations given to us, we are of the opinion, that disposal of the part of fixed assets has not affected the going concern status of the Company.

(ii) a. The inventory has been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable.

b. The procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

c. The Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material.

(iii) a. The Company has not granted loans, secured or unsecured, to Companies, Firms, or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

b. During the year the Company has taken unsecured loans from two parties, a sum of Rs 6727.44 Lakhs and repaid Rs 2881.05 Lakhs to two parties and the total amount outstanding as on 31.03.2011 was Rs 6942.15 Lakhs payable to two parties covered under register maintained under Section 301 of the Companies Act, 1956.

c. In our opinion, the rate of interest and other terms and conditions on which loans were taken from Companies, Firms, or other parties covered under the register maintained under Section 301 of the Companies Act, 1956, are not prima facie, prejudicial to the interest of the Company.

d. According to the information and explanation given to us, the Company is regular in repayment of the principle and interest.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to the purchases of inventory, fixed assets and with regard to the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls.

(v) a. According to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered. b. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

(vi) The Company has not accepted any deposits from the public within the meaning of Sections 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under. (vii) In our opinion, the Company has an internal audit system commensurate with its size and nature of its business.

(viii) We have broadly reviewed the books of account relating to materials, labour and other items of cost maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records under Section 209 (1)(d) of the Companies Act, 1956 and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

(ix) a. According to the information and explanations given to us and the records of the Company examined by us, the Company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, employees' state insurance, income tax, sales tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues applicable to it.

b. According to the information and explanations given to us, no undisputed amounts payable in respect of income tax, wealth tax, service tax, sales tax, customs duty, excise duty and cess were in arrears, as at 31.03.2011 for a period of more than six months from the date of became payable.

c. According to the information and explanations given to us, there are no dues of sales tax, income tax, customs duty, wealth tax, service tax, excise duty and cess which are not deposited on account of dispute.

(x) In our opinion, the Company has no accumulated losses as at 31.03.2011 and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

(xi) According to the information and explanation given to us, the Company has not defaulted in repayment of dues to financial institutions, bank and debenture holders as at balance sheet date.

(xii) In our opinion and according to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Accordingly the provisions of clause 4

(xii) of the Companies (Auditors' Report) Order, 2003 are not applicable to the Company. (xiii) In our opinion, the Company is not a chit fund or a nidhi/mutual benefit fund/ society. Therefore, the provisions of clause 4

(xiii) of the Companies (Auditors' Report) Order, 2003 are not applicable to the Company. (xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditors' Report) Order, 2003 are not applicable to the Company.

(xv) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions during the year.

(xvi) In our opinion, the term loans have been applied for the purposes for which they were raised.

(xvii) According to the information and explanations given to us and on the overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long term investments.

(xviii) According to the information and explanation given to us, the Company has made preferential allotment of warrants to parties covered in the register maintained under Section 301 of the Companies Act, 1956. In Our opinion, the price at which warrants have been issued is not prejudicial to the interest of the Company.

(xix) According to the information and explanation given to us, the Company has not issued any debentures. Therefore, the provisions of clause 4

(xix) of the Companies (Auditors' Report) Order, 2003 are not applicable to the Company.

(xx) According to the information and explanation given to us, the Company has not raised any money by public issues during the year. Accordingly, the provisions of clause 4(xx) of the Companies (Auditors' Report) Order, 2003 are not applicable to the Company. (xxi) According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.

For LAXMINIWAS & JAIN

Firm Registration Number : 001859S

Chartered Accountants

Place: Secunderabad (LAXMINIWAS SHARMA)

Date:26th May, 2011 Partner

Membership No. 014244





1. BASIS OF ACCOUNTING

The financial statements are prepared under the historical cost convention on the basis of a going concern with revenues recognized and expenses accounted on their accrual.

2. FIXED ASSETS

Fixed Assets are stated at cost, less accumulated depreciation. Expenditure which is of capital nature is capitalized. Such expenditure comprises purchase price, import duties, levies and any directly attributable cost of bringing the assets to their working condition. Depreciation is provided under the Straight Line Method at rates prescribed under Schedule XIV to the Companies Act, 1956.

3. GOVERNMENT GRANTS

Grants and subsidies are recognized when there is a reasonable assurance that the grant or subsidy will be received and that all the underlying conditions will be complied with. Grants and subsidies received during the year related to specific fixed assets is shown as deduction from the gross value of the asset concerned.

4. LEASES

a) Rentals applicable to operating leases where substantially all of the benefits and risks of ownership remain with the lessor are charged against profits as per the terms of the lease agreement over the lease period.

b) Assets created on the leasehold property are depreciated over the period of the lease.

5. INVESTMENTS

Long-term investments are stated at cost, and provision is made when there is a decline, other than temporary in the carrying value of such investments.

6. INVENTORIES

Raw Materials, Stores & Spares and Work in Process are valued at cost or net realizable value whichever is lower using FIFO cost method. Finished Goods are valued at cost or net realizable Value, whichever is lower.

7. EMPLOYEE BENEFITS

a) Defined Contribution Plan :

Contribution as per the Employee's Provident Funds and Miscellaneous Provisions Act, 1962 towards Provident Fund and Family Pension Fund are provided for and payments in respect thereof are made to the relevant authorities on actual basis.

b) Defined Benefit Plan :

Gratuity : In accordance with applicable Indian laws, the Company provides gratuity, a defined benefit retirement plan (Gratuity Plan) covering all employees. The gratuity Plan provides a lump sum payment to vested employees, at retirement or termination of employment, an amount based on the respective employee's last drawn salary and the years of employment with the Company. Liability with regard to Gratuity Plan is accrued based on actuarial valuation at the Balance Sheet date. Liability for Leave Encashment is treated as a Short term liability and is accounted for as per the rules of the company in force.

8. FOREIGN CURRENCY TRANSACTIONS

Revenue transactions in foreign currency are recorded at the exchange rates prevailing on the dates when the relevant transactions took place. The Company recognizes gains/losses on foreign exchange rate fluctuation relating to current assets and current liabilities at the year end.

9. FINANCIAL DERIVATIVES HEDGING TRANSATIONS

In respect of derivatives contracts, premium paid, provision for losses on restatement/losses on settlement are recognized in the Profit and Loss account.

10. BORROWING COSTS

Borrowing Costs which are directly attributable to the acquisition/ construction of fixed assets, till the time such assets are ready for intended use, are capitalized as part of the costs of such assets. Other Borrowing costs are recognized as expenses in the year in which they are incurred.

11. TAXATION

a) Current year Charge :

The provision for taxation is based on assessable profits of the Company as determined under the Income Tax Act; 1961.

b) Deferred Ta x :

The Company is providing and recognizing deferred tax on timing differences between taxable income and accounting income subject to consideration of prudence.

12. IMPAIRMENT OF ASSETS

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

13. CONTINGENT LIABILITIES - PROVISIONS AND CONTINGENT ASSETS :

Contingent liabilities arising from claims, litigation, assessment, etc are provided for when it is probable that a liability may be incurred and the amount can be reliably estimated.


Mar 31, 2010

1. BASIS OF ACCOUNTING

The financial statements are prepared under the historical cost convention on the basis of a going concern with revenues recognized and expenses accounted on their accrual.

2. FIXED ASSETS

Fixed Assets are stated at cost, less accumulated depreciation. Expenditure which is of capital nature is capitalized. Such expenditure comprises purchase price, import duties, levies and any directly attributable cost of bringing the assets to their working condition. Depreciation is provided under the Straight Line Method at rates prescribed under Schedule XIV to the Companies Act, 1956.

3. GOVERNMENT GRANTS

Grants and subsidies are recognized when there is a reasonable assurance that the grant or subsidy will be received and that all the underlying conditions will be complied.

4. LEASES

a) Rentals applicable to operating leases where substantially all of the benefits and risks of ownership remain with the lessor are charged against profits as per the terms of the lease agreement over the lease period.

b) Assets created on the leasehold property are depreciated over the period of the lease.

5. INVESTMENTS

Long-term investments are stated at cost, and provision is made when there is a decline, other than temporary in the carrying value of such investments.

6. INVENTORIES

Raw Materials, Stores & Spares and Work in Process are valued at cost or net realizable value which ever is lower using FIFO cost method. Finished Goods are valued at cost or net realizable Value, whichever is lower.

7. EMPLOYEE BENEFITS

a) Defined Contribution Plan:

Contribution as per the Employees Provident Funds and Miscellaneous Provisions Act, 1962 towards Provident Fund and Family Pension Fund are provided for and payments in respect thereof are made to the relevant authorities on actual basis.

b) Defined Benefit Plan:

Gratuity: In accordance with applicable Indian laws, the Company provides gratuity, a defined benefit retirement plan (Gratuity Plan) covering all employees. The gratuity Plan provides a lump sum payment to vested employees, at retirement or termination of employment, an amount based on the respective employees last drawn salary and the years of employment with the Company. Liability with regard to Gratuity Plan is accrued based on actuarial valuation at the balance Sheet date. Liability for Leave Encashment is treated as a Short term liability and is accounted for as per the rules of the company in force.

8. FOREIGN CURRENCY TRANSACTIONS

Revenue transactions in foreign currency are recorded at the exchange rates prevailing on the dates when the relevant transactions took place .The Company recognizes gains/losses on foreign exchange rate fluctuation relating to current assets and current liabilities at the year end.

9. FINANCIAL DERIVATIVES HEDGING TRANSATIONS

In respect of derivatives contracts, premium paid, provision for losses on restatement/losses on settlement are recognized in the Profit and Loss account.

10. BORROWING COSTS

Borrowing Costs which are directly attributable to the acquisition/ construction of fixed assets, till the time such assets are ready for intended use, are capitalized as part of the costs of such assets. Other Borrowing costs are recognized as expenses in the year in which they are incurred.

11. TAXATION

a) Current year Charge:

The provision for taxation is based on assessable profits of the Company as determined under the Income Tax Act; 1961.

b) Deferred Tax:

The Company is providing and recognizing deferred tax on timing differences between taxable income and accounting income subject to consideration of prudence.

12. IMPAIRMENT OF ASSETS

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

13. CONTINGENT LIABILITIES- PROVISIONS AND CONTINGENT ASSETS:

Contingent liabilities arising from claims, litigation, assessment, etc are provided for when it is probable that a liability may be incurred and the amount can be reliably estimated.

 
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