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Accounting Policies of ZF Steering Gear (India) Ltd. Company

Mar 31, 2015

A) Basis of Preparation of Financial Statements :

(i) The financial statements are prepared under the Historical Cost Convention, on the accrual basis of accounting and in accordance with the provisions of the Companies Act, 2013 and comply with the Accounting Standards notified by the Companies (Accounting Standards) Rules, 2006 and the relevant provisions of the Companies Act, 2013

(ii) Estimates and Assumptions used in preparation of the Financial Statements are based upon Management's evaluations of the relevant facts and circumstances as of the date of the financial statements,which may differ from the actual results at a subsequent date.

B) Fixed Assets and Depreciation :

(i) Fixed Assets :

Fixed Assets are stated at cost (net of Cenvat and sales tax credit ) of acquisition or construction or at manufacturing cost in case of Company manufactured assets, less accumulated depreciation (except on free hold land). The cost includes freight, duties, taxes, and incidental expenses related to acquisition, installation, erection and commissioning.

(ii) Depreciation :

a) Depreciation is provided as per the Written Down Value (W.D.V.) method for three shift as per useful life specified in Schedule II to the Companies Act, 2013 except ERP Software which is charged off in three equal installments from the date of capitalisation. Tangible assets residual value is kept at 5% ,of fixed asset.

b) Leasehold land 's value is written off on the basis of the tenure of the Lease.

c) Depreciation is provided on pro-rata basis on additions / deductions during the year.

C) Investments :

Long term Investments are stated at cost. Provision is made to recognise any diminution in the value, other than temporary, in the carrying amount of any long term investments.

Current Investments are carried at lower of cost and market value determined on an individual investment basis.

Investment in Immovable Property

Immovable Properties that are not intended to be occupied substantially for self use by or in the operations of the Company, have been classified as investment Properties . Investment properties are carried at cost less accumulated depreciation.

D) Inventories :

Inventories are valued at the lower of cost (Value of cost is computed on a weighted average basis) and estimated net realisable value. Finished goods and work-in-progress include costs of conversion and other costs incurred in bringing the inventories to their present location and condition. Excise duty is included in the value of finished goods inventory .Goods in transit are stated at actual cost incurred upto the date of balance sheet.

Scrap is valued at net realisable value.

Carbon Credit and Renewable Energy Certificates ( REC ) are valued at Cost or estimated net realisable value, whichever is lower.

E) Revenue Recognition

Sale of goods is recognised when the significant risks and rewards of ownership of goods have passed on to the customers, which is generally on despatch of goods. Gross Sales include excise duty but excludes sales tax and are net of trade discounts.

F) Employees Retirement Benefits :

Defined Contribution plans: The Company makes specified monthly contributions towards employee provident fund. Defined benefit plans: The Company's gratuity and leave encashment are defined benefit plans. The present value of the obligation under such defined benefit plans is determined based on acturial valuation using the projected unit credit method, which recognises 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 plans, are based on the market yields on Government Securities as at the Balance Sheet date.

Actuarial gains and losses are recognised immediately in the Profit and Loss Account.

Short term employee benefits are recognized as an expense at the undiscounted amount in the Profit and Loss Account in the year in which they relate.

G) Foreign Currency Transactions :

Transactions in foreign currency are accounted at exchange rates prevailing at the time of the transaction. All exchange gains / losses arising out of such transactions are taken to Profit and Loss Account. Foreign currency monetary assets and liabilities are translated at the exchange rates prevailing on the last working day of the accounting year.

H) Taxation :

Provision is made for income tax liability which may arise on the results for the year at the current rate of tax in accordance with the Income-tax Act, 1961.

The deferred tax for timing differences between the book profit and tax profits for the year is accounted for using the tax rates enacted as of the Balance Sheet date. Deferred tax assets arising from temporary timing differences are recognised to the extent there is reasonable certainty that the assets can be realised in future.

I) Segment Reporting

a) Identification of Segments

The Company's operating business are organised and managed separately according to the nature of activity , with each segment representing a strategic business unit that offers different activity.

b) Unallocated items

Corporate assets and liabilities, income and expenses which relate to the Company as a whole and are not allocable to segments, have been included under unallocated items.

J) Impairment of Assets :

At each Balance Sheet date, the Company assesses whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount. If the carrying amount of the assets exceeds its recoverable amount, an impairment loss is recognised in the Profit and Loss Account to the extent the carrying amount exceeds recoverable amount. During the year there was no impairment of assets.

K) Provisions and Contingent Liabilities

a) Provisions in respect of present obligation arising out of past events are made in the accounts when reliable estimates can be made about the amount of obligation.

b) Contingent Liabilities are disclosed when there is a possible obligation that may, but probably will not, require an outflow of resources.

L) Earnings per Share

Basic and diluted earning per share is 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.

M) Warranty

The estimated liability for product warranties is recorded when products are sold. These estimates are established using historical information on the nature, frequency and average cost of warranty claims and management estimates regarding possible future incidence based on corrective actions on product failures.

N) Government grants and subsidies

Grants and subsidies from the government are recognized when there is reasonable assurance that [i] the Company will comply with the conditions attached to them, and [ii] the grant / subsidy will be received.

When the grant or subsidy relates to revenue, it is recognized as income on a systematic basis in the Statement of Profit and Loss over the periods necessary to match them with the related costs, which they are intended to compensate .Where the grant relates to an asset, it is recognized as deferred income and is allocated to Statement of Profit and Loss over the periods and in the proportions in which depreciation on those assets is charged.


Mar 31, 2014

A) Basis of Preparation of Financial Statements :

(i) The financial statements are prepared under the Historical Cost Convention, on the accrual basis of accounting and in accordance with the provisions of the Companies Act, 1956 and comply with the Accounting Standards notified by the Companies (Accounting Standards) Rules, 2006 and the relevant provisions of Companies Act, 1956.

(ii) Estimates and Assumptions used in preparation of the Financial Statements are based upon Management''s evaluations of the relevant facts and circumstances as of the date of the financial statements, which may differ from the actual results at a subsequent date.

B) Fixed Assets and Depreciation :

(i) Fixed Assets :

Fixed Assets are stated at cost (net of Cenvat and sales tax credit) of acquisition or construction or at manufacturing cost in case of Company manufactured assets, less accumulated depreciation (except on free hold land). The cost includes freight, duties, taxes, and incidental expenses related to acquisition, installation, erection and commissioning.

(ii) Depreciation :

a) Depreciation is provided as per the Written Down Value (w.d.v.) method at the rates specified in Schedule XIV to the Companies Act, 1956 except ERP Software would be charged off in three equal installment from the date of capitalisation .

b) Leasehold land ''s value is written off on the basis of the tenure.

c) Depreciation is provided on pro-rata basis on additions/deductions during the year.

C) Investments :

Long term Investments are stated at cost. Provision is made to recognise any diminution in the value other than temporary, in the carrying amount of any long term investments.

Current Investments are carried at lower of cost and market value determined on an individual investment basis.

Investment in Immovable Property

Investment in Immovable Property that are not intended to be occupied substantially for self use by, or in the operations of the company, has been classified as investment property .Investment properties are carried at cost less accumulated depreciation .

D) Inventories :

Inventories are valued at the lower of cost (Value of cost is computed on a weighted average basis) and estimated net realisable value. Finished goods and work-in-progress include costs of conversion and other costs incurred in bringing the inventories to their present location and condition. Excise duty is included in the value of finished goods inventory .Goods in transit are stated at actual cost incurred up to the date of balance sheet .

Scrap is valued at net realisable value.

Carbon Credit and Renewable Energy Certificate ( REC ) is valued at Cost or estimated net realisable value whichever is lower.

E) Revenue Recognition

Sale of goods is recognised when the significant risks and rewards of ownership of goods have passed on to the customers which is generally on dispatch of goods. Gross Sales include excise duty but excludes sales tax and are net of trade discounts.

F) Employees Retirement Benefits :

Defined Contribution plans: The company makes specified monthly contributions towards employee provident fund. Defined benefit plans: The company''s gratuity and leave encashment are defined benefit plans. The present value of the obligation under such defined benefit plans is determined based on actuarial valuation using the projected unit credit method, which recognises each period of services as giving rise to additional unit of employee benefit entitlement and measure 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 plans, is based on the market yields on Government securities as at the balance sheet date.

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

Short term employee benefits are recognized as an expense at the undiscounted amount in the Profit and Loss Account in the year in which they relate .

G) Foreign Currency Transactions :

Transactions in foreign currency are accounted at exchange rates prevailing at the time of the transaction. All exchange gains / losses arising out of such transactions are taken to profit and loss account. Foreign currency monetary assets and liabilities are translated at the exchange rates prevailing on the last working day of the accounting year .

H) Taxation :

Provision is made for income tax liability which may arise on the results for the year at the current rate of tax in accordance with the Income-tax Act, 1961.

The deferred tax for timing differences between the book profit and tax profits for the year is accounted for using the tax rates enacted as of the balance sheet date. Deferred tax assets arising from temporary timing differences are recognised to the extent there is reasonable certainty that the assets can be realised in future.

I) Segment Reporting

a) Identification of Segments

The Company''s operating business are organised and managed separately according to the nature of activity , with each segment representing a strategic business unit that offers different activity.

b) Allocation of common costs

Common allocable costs are allocated to each segment according to the sales of each segment to the total sales of the Company.

c) Unallocated items

Corporate assets and liabilities, income and expenses which relate to the Company as a whole and are not allocable to segments, have been included under unallocated items.

J) Impairment of Assets :

At each balance sheet date, the Company assesses whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount. If the carrying amount of the assets exceeds its recoverable amount, an impairment loss is recognised in the profit and loss account to the extent the carrying amount exceeds recoverable amount. During the year there was no impairment of assets.

K) Provisions and Contingent Liabilities

a) Provisions in respect of present obligation arising out of past events are made in the accounts when reliable estimates can be made about the amount of obligation.

b) Contingent Liabilities are disclosed when there is a possible obligation that may, but probably will not, require an outflow of resources.

L) Earnings per Share

Basic and diluted earning per share is computed by dividing the net profit attributable to equity share-holders for the year, by the weighted average number of equity shares outstanding during the year.

M) Warranty

The estimate liability for product warranties is recorded when products are sold. These estimates are established using historical information on the nature, frequency and average cost of warranty claims and management estimates regarding possible future incidence based on corrective actions on product failures.

N) Government grants and subsidies

Grants and subsidies from the government are recognized when there is reasonable assurance that [i] the Company will comply with the conditions attached to them, and [ii] the grant/subsidy will be received.

When the grant or subsidy relates to revenue, it is recognized as income on a systematic basis in the statement of profit and loss over the periods necessary to match them with the related costs, which they are intended to compensate .Where the grant relates to an asset, it is recognized as deferred income and is allocated to statement of profit and loss over the periods and in the proportions in which depreciation on those assets is charged.


Mar 31, 2013

A) Basis of Preparation of Financial Statements :

(i) The financial statements are prepared under the Historical Cost Convention, on the accrual basis of accounting and in accordance with the provisions of the Companies Act, 1956 and comply with the Accounting Standards notified by the Companies (Accounting Standards) Rules, 2006 and the relevant provisions of Companies Act, 1956.

(ii) Estimates and Assumptions used in preparation of the Financial Statements are based upon Management''s evaluations of the relevant facts and circumstances as of the date of the financial statements, which may differ from the actual results at a subsequent date.

B) Fixed Assets and Depreciation :

(i) Fixed Assets :

Fixed Assets are stated at cost (net of Cenvat and sales tax credit ) of acquisition or construction or at manufacturing cost in case of Company manufactured assets, less accumulated depreciation (except on free hold land). The cost includes freight, duties, taxes, and incidental expenses related to acquisition, installation, erection and commissioning.

(ii) Depreciation :

a) Depreciation is provided as per the Written Down Value (w.d.v.) method at the rates specified in Schedule XIV to the Companies Act, 1956.

b) Leasehold land ''s value is written off on the basis of the tenure.

c) Depreciation is provided on pro-rata basis on additions/deductions during the year.

(iii) Liquidated Damage

Liquidated Damage , if any,are accounted for as and when recovery is effected and matter is considered as settled by management and the same is adjusted in the cost of relevant assets.

C) Investments :

Long term Investments are stated at cost. Provision is made to recognise any diminution in the value, other than temporary, in the carrying amount of any long term investments.

Current Investments are carried at lower of cost and fair value determined on an individual investment basis.

D) Inventories :

Inventories are valued at the lower of cost (Value of cost is computed on a weighted average basis) and estimated net realisable value. Finished goods and work-in-progress include costs of conversion and other costs incurred in bringing the inventories to their present location and condition. Excise duty is included in the value of finished goods inventory.

Carbon Credit is valued at Cost or estimated net realisable value whichever is lower

E) Revenue Recognition

Sale of goods is recognised when the significant risks and rewards of ownership of goods have passed on to the customers which is generally on despatch of goods. Gross Sales include excise duty but excludes sales tax and are net of discounts.

F) Employees Retirement Benefits :

Defined Contribution plans: The company makes specified monthly contributions towards employee provident fund. Defined benefit plans: The company''s gratuity and leave wages are defined benefit plans. The present value of the obligation under such defined benefit plans is determined based on acturial valuation using the projected unit credit method, which recognises each period of services as giving rise to additional unit of employee benefit entitlement and measure 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 plans, is based on the market yields on Government securities as at the balance sheet date.

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

Short term employee benefits are recognized as an expense at the undiscounted amount in the Profit and Loss Account in the year in which the related service is rendered.

G) Foreign Currency Transactions :

Transactions in foreign currency are accounted at exchange rates prevailing at the time of the transaction. All exchange gains / losses arising out of such transactions are taken to profit and loss account. Foreign currency monetary assets and liabilities are translated at the exchange rates prevailing on the last working day of the accounting year .

H) Taxation :

Provision is made for income tax liability which may arise on the results for the year at the current rate of tax in accordance with the Income-tax Act, 1961.

The deferred tax for timing differences between the book profit and tax profits for the year is accounted for using the tax rates enacted as of the balance sheet date. Deferred tax assets arising from temporary timing differences are recognised to the extent there is reasonable certainty that the assets can be realised in future.

I) Segment Reporting:

a) Identification of Segments

The Company''s operating business are organised and managed separately according to the nature of activity , with each segment representing a strategic business unit that offers different activity.

b) Allocation of common costs

Common allocable costs are allocated to each segment according to the sales of each segment to the total sales of the Company.

c) Unallocated items

Corporate assets and liabilities, income and expenses which relate to the Company as a whole and are not allocable to segments, have been included under unallocated items.

J) Impairment of Assets :

At each balance sheet date, the Company assesses whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount. If the carrying amount of the assets exceeds its recoverable amount, an impairment loss is recognised in the profit and loss account to the extent the carrying amount exceeds recoverable amount. During the year there was no impairment of assets.

K) Provisions and Contingent Liabilities

a) Provisions in respect of present obligation arising out of past events are made in the accounts when reliable estimates can be made about the amount of obligation.

b) Contingent Liabilities are disclosed when there is a possible obligation that may, but probably will not, require an outflow of resources.

L) Earnings per Share

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

M) Warranty

The estimate liability for product warranties is recorded when products are sold. These estimates are established using historical information on the nature, frequency and average cost of warranty claims and mangement estimates regarding posible future incidence based on corrective actions on product failures.


Mar 31, 2012

A) Basis of Preparation of Financial Statements

(i) The financial statements are prepared under the Historical Cost Convention, on the accrual basis of accounting and in accordance with the provisions of the Companies Act, 1956 and comply with the Accounting Standards notified by the Companies (Accounting Standards) Rules, 2006 and the relevant provisions of Companies Act, 1956.

(ii) Estimates and Assumptions used in preparation of the Financial Statements are based upon Management's evaluations of the relevant facts and circumstances as of the date of the financial statements ,which may differ from the actual results at a subsequent date.

B) Fixed Assets and Depreciation :

(i) Fixed Assets :

Fixed Assets are stated at cost (net of Cenvat and sales tax credit ) of acquisition or construction or at manufacturing cost in case of Company manufactured assets, less accumulated depreciation (except on free hold land). The cost includes freight, duties, taxes, and incidental expenses related to acquisition, installation, erection and commissioning.

(ii) Depreciation :

a) Depreciation is provided as per the Written Down Value (W.D.V.) method at the rates specified in Schedule XIV to the Companies Act, 1956.

b) Leasehold land 's value is written off on the basis of the tenure.

c) Depreciation is provided on pro-rata basis on additions/deductions during the year.

C) Investments :

Long term Investments are stated at cost. Provision is made to recognise any diminution in the value, other than temporary, in the carrying amount of any long term investments.

D) Inventories :

Inventories are valued at the lower of cost( Value of cost is computed on a weighted average basis) and estimated net realisable value. Finished goods and work-in-progress include costs of conversion and other costs incurred in bringing the inventories to their present location and condition. Excise duty is included in the value of finished goods inventory

E) Revenue Recognition

Sale of goods is recognised when the significant risks and rewards of ownership of goods have passed to the customers which is generally on despatch of goods. Gross Sales include excise duty but excludes sales tax and are net of discounts.

F) Employees Retirement Benefits :

Defined Contribution plans: The company makes specified monthly contributions towards employee provident fund.

Defined benefit plans: The company's gratuity and leave wages are defined benefit plans. The present value of the obligation under such defined benefit plans is determined based on acturial valuation using the projected unit credit method, which recognises each period of services as giving rise to additional unit of employee benefit entitlement and measure 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 plans, is based on the market yields on Government securities as at the balance sheet date. Actuarial gains and losses are recognised immediately in the profit and loss account.

Short term employee benefits are recognized as an expense at the undiscounted amount in the Profit and Loss Account in the year in which the related service is rendered.

G) Foreign Currency Transactions :

Transactions in foreign currency are accounted at exchange rates prevailing at the time of the transaction. All exchange gains/losses arising out of such transactions are taken to profit and loss account. Foreign currency monetary assets and liabilities are translated at the exchange rates prevailing on the last working day of the accounting year .

H) Taxation :

Provision is made for income tax liability which may arise on the results for the year at the current rate of tax in accordance with the Income-tax Act, 1961.

The deferred tax for timing differences between the book profit and tax profits for the year is accounted for using the tax rates prevailing as of the balance sheet date. Deferred tax assets arising from temporary timing differences are recognised to the extent there is reasonable certainty that the assets can be realised in future.

I) Segment Reporting

a) Identification of Segments

The Company's operating business are organised and managed separately according to the nature of activity , with each segment representing a strategic business unit that offers different activity.

b) Allocation of common costs

Common allocable costs are allocated to each segment according to the sales of each segment to the total sales of the Company.

c) Unallocated items

Corporate assets and liabilites, income and expenses which relate to the Company as a whole and are not allocable to segments, have been included under unallocated items.

J) Impairment of Assets :

At each balance sheet date, the Company assesses whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount. If the carrying amount of the assets exceeds its recoverable amount, an impairment loss is recognised in the profit and loss account to the extent the carrying amount exceeds recoverable amount.During the year there was no impairment of assets.

K) Provisions and Contingent Liabilities

a) Provisions in respect of present obligation arising out of past events are made in the accounts when reliable estimates can be made about the amount of obligation.

b) Contingent Liabilties are disclosed when there is a possible obligation that may, but probably will not, require an outflow of resources.

L) Earnings per Share

Basic and diluted earning per share is 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.

M) Warranty

The estimate liability for product warranties is recorded when products are sold. These estimates are established using historical information on the nature, frequency and average cost of warranty claims and management estimates regarding possible future incidence based on corrective actions on product failures.


Mar 31, 2011

A) Basis of Preparation of Financial Statements :-

(i) The financial statements are prepared under the Historical Cost Convention, on the accrual basis of accounting and in accordance with the provisions of the Companies Act, 1956 and comply with the Accounting Standards notified by the Companies (Accounting Standards) Rules, 2006 and the relevant provisions of Companies Act, 1956.

(ii) Estimates and Assumptions used in preparation of the Financial Statements are based upon Managements evaluations of the relevant facts and circumstances as of the date of the financial statements,which may differ from the actual results at a subsequent date.

B) Fixed Assets and Depreciation :

(i) Fixed Assets:

Fixed Assets are stated at cost (net of Cenvat and sales tax credit ) of acquisition or construction or at manufacturing cost in case of Company manufactured assets, less accumulated depreciation (except on free hold land). The cost includes freight,duties,taxes, and incidental expenses related to acquisition,installation,erection and commissioning.

(ii) Depreciation:

a) Depreciation is provided as per the Written Down Value (w.d.v.) method at the rates specified in Schedule XIV to the Companies Act, 1956.

b) Leasehold land s value is written off on the basis of the tenure.

c) Depreciation is provided on pro-rata basis on additions/deductions during the year.

C) Investments:

Long term Investments are stated at cost. Provision is made to recognise any diminution in the value,other than temporary, in the carrying amount of any long term investments.

D) Inventories:

Inventories are valued at the lower of cost( Value of cost is computed on a weighted average basis) and estimated net realisable value. Finished goods and work-in-progress include costs of conversion and other costs incurred in bringing the inventories to their present location and condition. Excise duty is included in the value of finished goods inventory.

E) Revenue Recognition:

Sale of goods is recognised when the significant risks and rewards of ownership of goods have passed to the customers which is generally on despatch of goods. Gross Sales include excise duty but excludes sales tax and are net of discounts.

F) Employee Retirement Benefits:

Defined Contribution Plans: The Company makes specified monthly contributions towards employee provident fund.

Defined Benefit Plans: The Companys gratuity and leave wages are defined benefit plans. The present value of the obligation under such defined benefit plans is determined based on acturial valuation using the projected unit credit method, which recognises each period of services as giving rise to additional unit of employee benefit entitlement and measure 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 plans, is based on the market yields on Government securities as at the balance sheet date. Actuarial gains and losses are recognised immediately in the profit and loss account.

Short term employee benefits are recognized as an expense at the undiscounted amount in the Profit and Loss Account in the year in which the related service is rendered.

G) Foreign Currency Transactions:

Transactions in foreign currency are accounted at exchange rates prevailing at the time of the transaction. All exchange gains/losses arising out of such transactions are taken to profit and loss account. Foreign currency monetary assets and liabilities are translated at the exchange rates prevailing on the last working day of the accounting year .

H) Taxation:

Provision is made for income tax liability which may arise on the results for the year at the current rate of tax in accordance with the Income-tax Act, 1961.

The Deferred Tax for timing differences between the book profit and tax profits for the year is accounted for using the tax rates prevailing as of the balance sheet date. Deferred Tax Assets arising from temporary timing differences are recognised to the extent there is reasonable certainty that the assets can be realised in future.

I) Impairment of Assets:

At each balance sheet date, the Company assesses whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount. If the carrying amount of the assets exceeds its recoverable amount, an impairment loss is recognised in the profit and loss account to the extent the carrying amount exceeds recoverable amount.During the year there was no impairment of assets.

J) Provisions and Contingent Liabilities:

a) Provisions in respect of present obligation arising out of past events are made in the accounts when reliable estimates can be made about the amount of obligation.

b) Contingent Liabilties are disclosed when there is a possible obligation that may, but probably will not, require an outflow of resources.

K) Earnings per Share:

Basic and diluted earnings per share is 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) Warranty:

The estimate liability for product warranties is recorded when products are sold.These estimates are established using historical information on the nature,frequency and average cost of warranty claims and management estimates regarding posible future incidence based on corrective actions on product failures.


Mar 31, 2010

A)Basis of Preparation of Financial Statements :-

(i)The financial statements are prepared under the Historical Cost Convention,on the accrual basis of accounting and in accordance with the provisions of the Companies Act,1956 and comply with the Accounting Standards notified by the Companies (Accounting Standards)Rules,2006 and the relevant provisions of Companies Act, 1956.

(ii)Estimates and Assumptions used in preparation of the Financial Statements are based upon Managements evaluations of the relevant facts and circumstances as of the date of the financial statements,which may differ from the actual results at a subsequent date.

B)Fixed Assets and Depreciation:

(i)Fixed Assets:

Fixed Assets are stated at cost (net of Cenvat and sales tax credit)of acquisition or construction or at manufacturing cost in case of Company manufactured assets,less accumulated depreciation (except on free hold land).The cost includes freight,duties,taxes,and incidental expenses related to acquisition,installation,erection and commissioning.

(ii)Depreciation:

a)Depreciation is provided as per the Written Down Value (w.d.v.)method at the rates specified in Schedule XIV to the Companies Act,1956.

b)Leasehold lands value is written off on the basis of the tenure.

c)Depreciation is provided on pro-rata basis on additions/deductions during the year.

C)Investments:

Long term Investments are stated at cost.Provision is made to recognise any diminution in the value,other than temporary,in the carrying amount of any long term investments.

D)Inventories:

Inventories are valued at the lower of cost(Value of cost is computed on a weighted average basis)and estimated net realisable value.Finished goods and work-in-progress include costs of conversion and other costs incurred in bringing the inventories to their present location and condition.Excise duty is included in the value of finished goods inventory.

E)Revenue Recognition:

Sale of goods is recognised when the significant risks and rewards of ownership of goods have passed to the customers which is generally on despatch of goods.Gross Sales include excise duty but excludes sales tax and are net of discounts.

F)Employee Retirement Benefits:

Defined Contribution Plans:The Company makes specified monthly contributions towards employee provident fund.

Defined Benefit Plans:The Companys gratuity and leave wages are defined benefit plans.The present value of the obligation under such defined benefit plans is determined based on acturial valuation using the projected unit credit method,which recognises each period of services as giving rise to additional unit of employee benefit entitlement and measure 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 plans,is based on the market yields on Government securities as at the balance sheet date.Actuarial gains and losses are recognised immediately in theprofit and loss account.

Short term employee benefits are recognized as an expense at the undiscounted amount in the Profit and Loss Account in the year in which the related service is rendered.

G)Foreign Currency Transactions:

Transactions in foreign currency are accounted at exchange rates prevailing at the time of the transaction.All exchange gains/losses arising out of such transactions are taken to profit and loss account.Foreign currency monetary assets and liabilities are translated at the exchange rates prevailing on the last working day of the accounting year.

H)Taxation:

Provision is made for income tax liability which may arise on the results for the year at the current rate of tax in accordance with the Income-tax Act,1961. The Deferred Tax for timing differences between the book profit and tax profits for the year is accounted for using the tax rates prevailing as of the balance sheet date.Deferred Tax Assets arising from temporary timing differences are recognised to the extent there is reasonable certainty that the assets can be realised in future.

I)Impairment of Assets:

At each balance sheet date,the Company assesses whether there is any indication that an asset may be impaired.If any such indication exists,the Company estimates the recoverable amount.If the carrying amount of the assets exceeds its recoverable amount,an impairment loss is recognised in the profit and loss account to the extent the carrying amount exceeds recoverable amount.During the yearthere was no impairment of assets.

J)Provisions and Contingent Liabilities:

a)Provisions in respect of present obligation arising out of past events are made in the accounts when reliable estimates can be made about the amount of obligation.

b)Contingent Liabilties are disclosed when there is a possible obligation that may,but probably will not,require an outflow of resources.

K)Earnings per Share:

Basic and diluted earnings per share is 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)Warranty:

The estimate liability for product warranties is recorded when products are sold.These estimates are established using historical information on the nature.frequency and average cost of warranty claims and mangement estimates regarding posible future incidence based on corrective actions on product failures.

 
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