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Accounting Policies of Vippy Spinpro Ltd. Company

Mar 31, 2015

Note 1- CORPORATE INFORMATION

Vippy Spinpro Ltd. was established in 1993 as a public limited company. The company is incorporated under the provisions of Companies Act, 1956. Its shares are listed on Mumbai Stock Exchange. The company is engaged in manufacturing of Cotton Yarn. The factory is situated at Dewas, with close proximity to Indore, a main commercial city of Madhya Pradesh. Company specialises in slub yarns, fancy yarns, multi count yarns and multi twist yarns, waxed yarn plied yarn etc. The company has an ISO certification, certifed by Bureau Veritas ISO 9001:2008 since 2004

2.1 BASIS OF PREPARATION OF FINANCIAL STATEMENTS

These financial statements have been prepared in accordance with the generally accepted accounting principles in India (Indian GAAP) under the historical cost convention on the accrual basis, except for certain financial instruments which measured at fair value. Indian GAAP comprises mandatory accounting standards as prescribed under section 133 of the Companies Act, 2013 ( "the Act" ) read with rule 7 of the companies (Accounts) Rule, 2014 and the provision of the Act (to the extent notified) and guidelines issued by the Securities and Exchange Board of India ('SEBI') to the extent applicable.

2.2 USE OF ESTIMATES

The preparation of financial statements in conformity with the Generally Accepted Accounting Principles ("GAAP") in India requires management to make estimates and assumptions that affect the reported amounts of income and expenses of the period, assets and liabilities and disclosures relating to contingent liabilities as of the date of the financial statements. Actual result could differ from those estimates. Any revision to accounting estimates is recognised prospectively in future periods.

2.3 FIXED ASSETS AND CAPITAL WORK IN PROGRESS

2.3.1 Fixed assets, are stated at cost of acquisition inclusive of duties (net of TED) taxes, less accumulated depreciation and impairment losses. Cost comprises the purchase price and any attributable cost related to the acquisition and installation of the respective asset to bring the asset to its working condition for its intended use.

2.3.2 Interest on borrowed money allocated to and utilized for fixed assets, pertaining to the period up to the date of capitalization is capitalized.

2.3.3 Capital work-in-progress comprises the cost of fixed assets that are not yet ready for their intended use at the Balance Sheet date.

2.4 GOVERNMENT GRANTS & SUBSIDIES

Government grants are accounted when there is reasonable assurance that the enterprises will comply with the conditions attached to them and it is reasonably certain that the ultimate collection will be made. Capital subsidy in nature of Government Grant related to specific fixed assets is accounted for where collection is reasonably certain and the same is shown as a deduction from the gross value of the assets concerned in arriving at its book value and accordingly the depreciation is provided on the reduced book value. Other revenue grants are credited to the statement of profit and loss account.

2.5 IMPAIRMENT OF ASSETS

The Company assesses at each Balance Sheet date whether there is any indication that an assets may be impaired. If any such indication exist, the company estimates the recoverable amount of the asset. If such recoverable amount of the asset or recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognised in the statement of profit and loss. If at the balance date there is an indication that a previously assessed impairment loss no longer exist, the recoverable amount is reassessed and the assets is refected at the lower of recoverable amount and the carrying amount that would have been determined had no impairment loss been recognised.

2.6 INVESTMENT

2.6.1 Non current investments are carried at cost less any other than temporary diminution in value, determined on the specific identification basis.

2.6.2 Current investments are carried at lower of cost or fair value. The comparison of cost and fair value is carried out separately in respect of each investment.

2.6.3 Profit or loss on sale of investments is determined as the difference between the sale price and carrying value of investment, determined individually each investment.

2.7 INVENTORIES

Raw materials, packing materials, stores and spares are valued at the lower of cost and net realisable value; cost being computed on "Weighted Average" basis. Finished goods (ascertained on FIFO basis) and stock in process valued at lower of estimated cost and net realisable value (cost being a composition of direct material cost, direct labour cost and overheads necessary to bring the inventories to their present location and condition).

2.8 DEPRECIATION

Company has charged the Written Down Value (WDV) Method in respect of Assets acquired under Technology Upgradation Fund Scheme and all Assets acquired after 31st March, 2002, excluding Wind Mill, at the rate as per the useful life prescribed in schedule II to the Companies Act, 2013. On Wind Mill, depreciation is charged on straight line method (SLM) at the rate as per useful life prescribed in Schedule II of the Companies Act, 2013. Depreciation on all fixed assets acquired before 31st March, 2002 is provided on the straight-line method basis at the rate as per useful life prescribed in schedule II of the Companies Act, 2013. Depreciation on fixed assets added/disposed off during the year is provided on pro-rata basis

2.9 REVENUE RECOGNITION

Sales are recognized on delivery or on passage of title of the goods to the customer. They are accounted net of trade discounts and rebates but exclusive of CST /VAT.

2.10 BORROWING COSTS

Borrowing Cost that are directly attributable to the acquisition or construction of fixed assets are capitalized up to the time all substantial activities necessary to prepare such assets for their intended use are complete or put to use. Other borrowing costs are recognized as an expense in the period in which they are incurred.

2.11 EMPLOYEE BENEFITS

2.11.1 Post Employment Benefits:

Defned Benefit Plans: The Company's Gratuity scheme and Superannuation Scheme for key persons are defined benefit plans. In accordance with the requirements of Accounting Standard-15 "Employee Benefits", the Company provides for gratuity covering eligible employees on the basis of actuarial valuation. Under the gratuity plan, every employee who completed at least five years of service gets a gratuity on departure @ 15 days of last drawn salary for each completed year of service. The both schemes are funded with Life Insurance Corporation of India in the form of qualifying insurance policy.

2.11.2 Defined Contribution Plans

Contributions payable by the Company to the concerned government authorities in respect of provident fund, family pension fund and employees state insurance are defined contribution plans. The contributions are recognized as an expense in the Statement of Profit and Loss Account during the period in which the employee renders the related service. The Company does not have any further obligation in this respect, beyond such contribution.

Other employee benefits are accounted for on accrual basis.

2.12 FOREIGN CURRENCY TRANSACTIONS

2.12.1 The company is exposed to foreign currency transactions including foreign currency revenues receivables. With a view to minimise the volatility arising from fluctuations in currency rates, the company enters into foreign exchange forward contracts.

2.12.2 Foreign exchange transactions are recorded using the exchange rates prevailing on the dates of the respective transactions. Exchange differences arising on foreign exchange transactions settled during the period are recognised in the statement of profit and loss for the period.

2.12.3 Monetary assets and liabilities denominated in foreign currencies as at balance sheet date are translated at the closing exchange rates on that date; the resultant exchange differences are recognised in the statement of profit and loss. Non-monetary items which are carried in terms of historical cost denominated in the foreign currency are reported using the exchange rate at the date of the transaction.

2.12.4 Forward exchange contracts are not in respect of forecasted transactions are accounted for using the guidance in Accounting Standard 11, 'The effects of changes in foreign exchange rates'. For such forward exchange contracts covered by AS 11, based on the nature and purpose of the contract are restated at year end rate. The difference between the year end rate and rate on the date of contract is recoganised as exchange difference in profit & loss account and the premium/discount on forward contracts at the inception is amortized as income or expenses over the life of contract.

2.12.5 For forward exchange contracts that are not covered by AS 11 and that relate to a frm commitment or highly probable forecasted transactions, the Company has adopted Accounting Standard 30. 'Financial Instruments: Recognition and Measurement'.

Derivative financial instruments are initially recorded at their fair value on the date of the derivative transaction and are re-measured at their fair value at subsequent balance sheet date.

Changes in the fair value of derivatives that are designated and qualify as cash flow hedges and are determined to be an effective hedge are recorded in hedging reserve account. To designate a forward contract or option as an effective hedge, management objectively evaluates and evidences with appropriate supporting documents at the inception of each contract whether the contract is effective in achieving offsetting cash flows attributable to hedged risk. Any cumulative gain or loss on the hedging instrument recognised in hedging reserve is kept in hedging reserve until the forecast transaction occurs or the hedged accounting is discontinued. Amounts deferred to hedging reserve are recycled in the statement of Profit and Loss in the period when the hedged item is recognised in the Statement of Profit and Loss or when the portion of the gain or loss is determined to be an ineffective hedge. Derivative financial instruments that do not qualify for hedge accounting are marked to marked at the balance sheet date and gains or losses are recognised in the Statement of Profit and Loss immediately. Hedge Accounting is discontinued when the hedging instrument expires or is sold, terminated or exercised, or no longer qualifies for hedge accounting. If a hedged transaction is no longer expected to occur, the net cumulative gain or loss recgnised in hedging reserve is transferred to profit or loss for the year.

2.13 COMMODITY HEDGING TRANSCTION

In respect of derivative contracts, premium paid, gains/losses on settlement and losses on restatement are recognised in statement of the profit and loss account.

2.14 TAXES ON INCOME

2.14.1 The accounting treatment followed for taxes on income is to provide for Current Tax and Deferred Tax. Provision for current income tax is made for the tax liability payable on taxable income ascertained in accordance with the applicable tax rates and laws.

2.14.2 Deferred tax is recognized, subject to the consideration of prudence in respect of deferred tax assets, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods

2.15 EARNINGS PER SHARE

In determining earning per share, the company considers the net profit after tax and includes the post- tax effect of any extra-ordinary item. The number of equity shares used in computing basic earning per share is the weighted average number of equity shares outstanding during the period. The number of equity shares used in computing diluted earning per share comprises weighted average number of equity shares considered for deriving basic earning per share.

2.16 CASH AND CASH EQUIVALENTS

Cash and cash equivalents for the purposes of cash fow statement comprise cash at bank and in hand and short term investments with an original maturity period of three months or less.

2.17 CASH FLOW STATEMENT

Cash fows are reported using the indirect method, whereby net profit before tax is adjusted for the effects of transactions of a non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash fows from regular revenue generating, investing and financing activities of the Company are segregated.

2.18 PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Provision involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognised but are disclosed in the notes. Contingent assets are neither recognised nor disclosed in the financial statements.


Mar 31, 2014

1.1 BASIS OF PREPARATION OF FINANCIAL STATEMENTS

The financial statements have been prepared and presented under the historical cost convention on the accrual basis of accounting except for certain financial instruments which are measured at fair values and comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the act" ) which as per clarification issued by the Ministry of Corporate Affairs continue to apply under section 133 of the companies Act, 2013 (which has superseded section 211 (3C) of the Companies Act, 1956 w.e.f. 12th September, 2013), other pronouncements of the Institute of Chartered Accountants of India ("ICAI") the provision of the Companies Act, 2013 (to the extent notified and applicable) and the Companies Act, 1956 (to the extent applicable) and guidelines issued by the Securities and Exchange Board of India ("SEBI") to the extent applicable.

2.2 USE OF ESTIMATES

The preparation of financial statements in confirmity with the Generally Accepted Accounting Principles ("GAAP") in India requires management to make estimates and assumptions that affect the reported amounts of income and expenses of the period, assets and liabilities and disclosures relating to contingent liabilities as of the date of the financial statements. Actual result could differ from those estimates. Any revision to accounting estimates is recognised prospectively in future periods.

2.3 FIXED ASSETS AND CAPITAL WORK IN PROGRESS

2.3.1 Fixed assets, are stated at cost of acquisition inclusive of duties (net of TED) taxes, less accumulated depreciation and impairment losses. Cost comprises the purchase price and any attributable cost related to the acquisition and installation of the respective asset to bring the asset to its working condition for its intended use.

2.3.2 Interest on borrowed money allocated to and utilized for fixed assets, pertaining to the period up to the date of capitalization is capitalized.

2.3.3 Capital work-in-progress comprises the cost of fixed assets that are not yet ready for their intended use at the Balance Sheet date.

2.4 GOVERNMENT GRANTS & SUBSIDIES

Capital grant relating to specific assets are reduced from the gross value of the fixed asets. Other revenue grants are credited to the statement of profit & loss account as dedcted from the related expenses.

2.5 IMPAIRMENT OF ASSETS

If internal/ external indications suggest that an assets of the company may be impaired, the recoverable amount of assets/cash generating asset is determined on the balance sheet date and; if it is less than its carrying amount, the carrying amount of the assets/ cash generating unit is reduced to the said recoverable amount. The recoverable amount is measured as the higher of the net selling price and value in use of assets/ cash generating unit, which is determined by the present value of the estimated future cash flows. As at the balance sheet date, there was no such indication.

2.6 INVESTMENT

2.6.1 Non current investments are carried at cost less any other than temporary diminution in value, determined on the specific indentification basis

2.6.2 Current investments are carried at lower of cost fair value. The comparison of cost and fair value is carried out separately in respect of each investment.

2.6.3 Profit or loss on sale of investments is determined as the difference between the sale price and carrying value of investment, determined individually each investment.

2.7 INVENTORIES

Raw materials, packing materials, stores and spares are valued at the lower of cost and net realisable value; cost being computed on "weighted Average basis. Finished goods (ascertained on FIFO basis) and stock in process valued at lower of estimated cost and net realisable value (cost being a composition of direct material cost, direct labour cost and overheads necessary to bring the inventories to their present location and condition).

2.8 DEPRECIATION

Company has charged the Written Down Value (WDV) Method in respect of Assets acquired under Technology Upgradation Fund Scheme and all Assets acquired after 31st March, 2002, excluding Wind Mill at the rate specified in Schedule XIV of the Companies Act, 1956. On Wind Mill depreciation is charged on straight line method (SLM).Depreciation on all fixed assets acquired before 31st March 2002 is provided on the straight-line method basis at the rate specified in schedule XIV of the Companies Act.1956. Depreciation on fixed assets added/disposed off during the year is provided on pro-rata basis

2.9 REVENUE RECOGNITION

Sales are recognized on delivery or on passage of title of the goods to the customer. They are accounted net of trade discounts and rebates but exclusive of CST /VAT.

2.10 BORROWING COSTS

Borrowing Cost that are directly attributable to the acquisition or construction of fixed assets are capitalized up to the time all substantial activities necessary to prepare such assets for their intended use are complete or put to use. Other borrowing costs are recognized as an expense in the period in which they are incurred.

2.11 EMPLOYEE BENEFITS

2.11.1 Post Employment Benefits:

Defined Benefit Plans: The Company''s Gratuity scheme and Superannuation Scheme for key persons are defined benefit plans. In accordance with the requirements of Accounting Standard-15 "Employee Benefits”, the Company provides for gratuity covering eligible employees on the basis of actuarial valuation. Under the gratuity plan, every employee who completed atleast five years of service gets a gratuity on departure @ 15 days of last drawn salary for each completed year of service. The both schemes are funded with Life Insurance Corporation of India in the form of qualifying insurance policy.

2.11.2 Defined Contribution Plans:

Contributions payable by the Company to the concerned government authorities in respect of provident fund, family pension fund and employees state insurance are defined contribution plans. The contributions are recognized as an expense in the Statement of Profit and Loss Account during the period in which the employee renders the related service. The Company does not have any further obligation in this respect, beyond such contribution.

2.12 FOREIGN CURRENCY TRANSACTIONS

2.12.1 The company is exposed to foreign currency transactions including foreign currency revenues receivables and borrowings. With a view to minimise the volatility arising from fluctuations in currency rates, the company enters into foreign exchange forward contracts.

2.12.2 Foreign exchange transactions are recorded using the exchange rates prevailing on the dates of the respective transctions. Exchange differences arising on foreign exchange transctions settled during the period are reconised in the statement of profit and loss for the period

2.12.3 Monetary assets and liabilities denominated in foreign currencies as at balance sheet date are translated at the closing exchange rates on that date; the resultant exchange differences are recognised in the statement of profit and loss. Non -monetary items which are carried in terms of historical cost denominated in the foreign currency are reported using the exchange rate at the date of the transction.

2.12.4 Forward exchange contracts are not in respect of forecasted transactions are accounted for using the guidance in Accounting Standard (''AS'') 11, ''The effects of changes in foreign exchange rates''. For such forward exchange contracts covered by AS 11, based on the nature and purpose of the contract are restated at year end rate. The difference between the year end rate and rate on the date of contract is recoganised as exchange difference in profit & loss a/c.and the premium/discount on forward contracts at the inception is amortized as income or expenses over the life of contract.

2.12.5 For forward exchange contracts that are not covered by AS 11 and that relate to a firm commitment or highly probable forecasted transactions, the Company has adopted Accounting Standard(''AS'') 30. ''Financial Instruments: Recognition and Measurements the extent that the adoption did not conflict with existing accounting standards and other authoritative pronouncements of the Company Law and other regulatory requirements. In accordance with AS 30, such derivative financial instruments, which qualify for cash flow hedge accounting and where the Company has met all the conditions of cash flow hedge accounting, are fair valued at balance sheet date and the resultant exchange loss/ gain is debited/ credited to the hedge reserve until the transaction is completed

2.13 COMMODITY HEDGING TRANSCTION

In rescept of derivative contracts, premium paid, gains/losses on settlement and losses on restatement are recognised in staatement of the profit and loss account

2.14 TAXES ON INCOME

2.14.1 The accounting treatment followed for taxes on income is to provide for Current Tax and Deferred Tax. Provision for current income tax is made for the tax liability payable on taxable income ascertained in accordance with the applicable tax rates and laws.

2.14.2 Deferred tax is recognized, subject to the consideration of prudence in respect of deferred tax assets, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods

2.15 EARNINGS PER SHARE

In determining earning per share, the company considers the net profit after tax and includes the post- tax effect of any extra-ordinary item. The number of equity shares used in computing basic earning per share is the weighted average number of equity shares outstanding during the period. The number of equity shares used in computing diluted earning per share comprises weighted average number of equity shares considered for deriving basic earning per share.

2.16 CASH AND CASH EQUIVALENTS

Cash and cash equivalents for the purposes of cash flow statement comprise cash at bank and in hand and short term investments with an original maturity period of three months or less.

2.17 CASH FLOW STATEMENT

Cash flows are reported using the indirect method, whereby net profit before tax is adjusted for the effects of transactions of a non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from regular revenue generating, investing and financing activities of the Company are segregated.

2.18 PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Provision involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognised but are disclosed in the notes. Contingent assets are neither recognised nor disclosed in the financial statements.


Mar 31, 2013

A) BASIS OF PREPARATION OF FINANCIAL STATEMENTS

The financial statements are prepared in accordance with the Indian Generally Accepted Accounting Principles ("GAAP") on accrual basis under the historical cost convention. GAAP comprises mandatory accounting standards as notified by the Companies (Accounting Standards) Rules, 2006, the provisions of Companies Act, 1956, and guidelines issued by the Securities Exchange Board of India. Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.

The management evaluates all recently issued or revised accounting standards on an ongoing basis.

b) TANGIBLE ASSETS AND CAPITAL WORK IN PROGRESS

Fixed assets, are stated at cost of acquisition inclusive of duties (net of TED) taxes, less accumulated depreciation and impairment losses. Cost comprises the purchase price and any attributable cost related to the acquisition and installation of the respective asset to bring the asset to its working condition for its intended use.

Interest on borrowed money allocated to and utilized for fixed assets, pertaining to the period up to the date of capitalization is capitalized.

Capital work-in-progress comprises the cost of fixed assets that are not yet ready for their intended use at the Balance Sheet date.

c) GOVERNMENT GRANTS & SUBSIDIES

Capital grant relating to specific assets are reduced from the gross value of the fixed assets. Other revenue grants are credited to the statement of profit & loss account as deducted from the related expenses.

d) IMPAIRMENT OF ASSETS

If internal/ external indications suggest that an assets of the company may be impaired, the recoverable amount of assets/cash generating asset is determined on the balance sheet date and; if it is less than its carrying amount, the carrying amount of the assets/ cash generating unit is reduced to the said recoverable amount. The recoverable amount is measured as the higher of the net selling price and value in use of assets/ cash generating unit, which is determined by the present value of the estimated future cash flows. As at the balance sheet date, there was no such indication.

e) INVESTMENTS

Long term investments are valued at cost and current investment are valued at lower of cost and market price. Provision of diminution in value is considered, if in the opinion of the management, such decline is considered permanent.

f) INVENTORIES

Finished goods and stock in process are valued at lower of cost or net realizable value. Cost includes cost of conversion and other expenses incurred in bringing the goods to their location and condition. Raw materials, packing materials, stores and spares are valued at lower of cost or net realizable value. Capital cost is ascertained on "weighted Average" basis.

g) DEPRECIATION AND AMORTISATION

Company has charged the Written Down Value (WDV) Method in respect of Assets acquired under Technology Up gradation Fund Scheme and all Assets acquired after 31st March 2002, excluding Wind Mill at the rate specified in Schedule XIV of the Companies Act, 1956. On Wind Mill depreciation is charged on straight line method (SLM). Depreciation on all fixed assets is provided as per the old accounting policy on the straight-line method basis at the rate specified in schedule XIV of the Companies Act.1956. Depreciation on fixed assets added/disposed off during the year is provided on pro-rata basis.

h) REVENUE RECOGNITION

Sales are recognized on delivery or on passage of title of the goods to the customer. They are accounted net of trade discounts and rebates but exclusive of CST /VAT.

i) BORROWING COSTS

Borrowing Cost that are directly attributable to the acquisition or construction of fixed assets are capitalized until the time all substantial activities necessary to prepare such assets for their intended use are complete. Other borrowing costs are recognized as an expense in the period in which they are incurred.

j) EMPLOYEE BENEFITS Post Employment Benefits:

(a) Defined Benefit Plans: The Company''s Gratuity scheme and Superannuation Scheme for key persons are defined benefit plans. In accordance with the requirements of revised Accounting Standard-15 "Employee Benefits", the Company provides for gratuity covering eligible employees on the basis of actuarial valuation as carried out by an independent actuary. Under the gratuity plan, every employee who completed at least five years of service gets a gratuity on departure @ 15 days of last drawn salary for each completed year of service. The both schemes are funded with Life Insurance Corporation of India in the form of qualifying insurance policy.

(b) Defined Contribution Plans: Contributions payable by the Company to the concerned government authorities in respect of provident fund, family pension fund and employees state insurance are defined contribution plans. The contributions are recognized as an expense in the statement of Profit and Loss Account during the period in which the employee renders the related service. The Company does not have any further obligation in this respect, beyond such contribution.

l) FINANCIAL DERIVATES AND COMMODITY HEDGING TRANSACTION

In respect of derivative contracts, premium paid, gains/losses on settlement and losses on restatement are recognized in statement of the profit and loss account

m) TAXES ON INCOME

The accounting treatment followed for taxes on income is to provide for Current Tax and Deferred Tax. Provision for current income tax is made for the tax liability payable on taxable income ascertained in accordance with the applicable tax rates and laws.

Deferred tax is recognized, subject to the consideration of prudence in respect of deferred tax assets, on

timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

n) EARNINGS PER SHARE

Basic earnings per share is computed by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year.

o) CASH AND CASH EQUIVALENTS

Cash and cash equivalents for the purposes of cash flow statement comprise cash at bank and in hand and short term investments with an original maturity period of three months or less.

p) CASH FLOW STATEMENT

Cash flows are reported using the indirect method, whereby net profit before tax is adjusted for the effects of transactions of a non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from regular revenue generating, investing and financing activities of the Company are segregated.

q) PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Provision involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognized nor disclosed in the financial statements.


Mar 31, 2010

1. Accounting Concepts:

The financial statement are prepared under the historical cost convention, on accrual basis, on going concern basis, in accordance with the generally accepted accounting principles in India, the Accounting Standards issued by the Institute of Chartered Accountants of India and the provisions of the Companies Act, 1956.

2. Fixed Assets:

Fixed assets are stated at cost of acquisition inclusive of duties (net of TED) taxes, incidental expenses and erection/commissioning expenses incurred up to the date the assets is put to use. Interest on borrowings and financing cost during the period of construction is added to the cost of fixed assets.

3. Depreciation:

Company has charged the Written Down Value (WDV) Method in respect of Assets acquired under Technology Upgradation Fund Scheme and all Assets acquired after 31st March 2002, excluding Wind Mill at the rate specified in Schedule XIV of the Companies Act, 1956. On Wind Mill depreciation is charged on straight line method (SLM).Depreciation on all fixed assets is provided as per the old accounting policy on the straight-line method basis at the rate specified in schedule XIV of the Companies Act. 1956. Depreciation on fixed assets added/disposed off during the year is provided on pro-rata basis.

4. Investments:

Long Term Investments are valued at cost and current investments are valued at lower of cost and market price. Provision for diminution in value is considered, if in the opinion of the management, such a decline is considered permanent.

5. Inventories:

Finished goods and stock in process are valued at lower of cost or net realizable value. Cost includes cost of conversion and other expenses incurred in bringing the goods to their location and condition. Raw materials, packing materials, stores & spares are valued at lower of cost or net realizable value. Cost is ascertained on "Weighted Average" basis.

6. Revenue recognition:

Sales are recognized on delivery or on passage of title of the goods to the customer. They are accounted net of trade discounts and rebates but exclusive of CST /VAT.

7. Foreign Currency Transactions:

a) Transactions in foreign currency are accounted at the exchange rate prevailing on the date of transactions and realized exchange loss/gain are dealt with in the profit and loss account

b) Monetary assets and liability denominated in foreign currency are re-stated at the rate of exchange as on the balance sheet date and the exchange gain/loss suitably dealt with in the profit and loss account.

c) Gain/ loss on foreign exchange forward contract as on balance sheet date is recognized in the profit and loss account.

8. Borrowing Cost:

Borrowing Cost that are directly attributable to the acquisition or construction of fixed assets are capitalized until the time all substantial activities necessary to prepare such assets for their intended use are complete. Other borrowing costs are recognized as an expense in the period in which they are incurred.

9. Gratuity /Superannuation Scheme:

Liabilities in respect of employees group gratuity cash accumulation cum-life assurance scheme and Superannuation Scheme for key persons are funded by way of contribution to Life Insurance Corporation of India and are determined on the basis of actuarial valuation.

10. Taxes on Income :

Current tax is determined as the amount of tax payable in respect of taxable income for the period. Deferred tax is recognized, subject to the consideration of prudence in respect of deferred tax assets, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

11. Government Grants:

Capital grant relating to specific assets are reduced from the gross value of the fixed assets. Other revenue grant are credited to the profit and loss account as deducted from the related expenses.

12. Contingent Liabilities :

Contingent liabilities are determined on the basis of available information and are disclosed by way of notes to the accounts.

13. Earning (Loss) per share:

Basic earnings (loss) per share are calculated by dividing the net profit or loss for the period attributable to equity shareholder by the weighted average number of equity shares outstanding during the period.

14. Impairment of assets:

If internal/external indications suggest that an assets of the company may be impaired, the recoverable amount of assets/ cash generating asset is determined on the balance sheet date and; if it is less than its carrying amount, the carrying amount of the assets / cash generating unit is reduced to the said recoverable amount. The recoverable amount is measured as the higher of the net selling price and value in use of assets / cash generating unit, which is determined by the present value of the estimated future cash flows. As at the balance sheet date, there was no such indication.

 
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