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Accounting Policies of Ador Fontech Ltd. Company

Mar 31, 2017

General information

Ador Fontech Limited was incorporated in India on August 22, 1974 and is a frontrunner organization that operates on the philosophy of ‘partnering'' with its clients in recommending and implementing value-added fusion, surfacing, spraying and environmental solutions. The Company is dedicated to the supply of products, services and solutions that meet and exceed the needs of its end-users under the broad gamut of ‘Life enhancement of industrial components''. The Company is a public limited company [CIN: L31909KA1974PLC020010] and is listed on the Bombay Stock Exchange (BSE).

Notel 1.0 Summary of ''Significant Accounting Policies''

The following significant accounting policies have been adopted in the preparation and presentation of the financial statements:

1.01 Basis of preparation of financial statements

These financial statements are prepared in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis except for certain financial instruments which are measured at fair values. 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) Rules, 2014, the provisions of the Act (to the extent notified) and guidelines issued by the Securities and Exchange Board of India (SEBI). 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.

1.02 Use of estimates

The preparation of financial statements requires estimates and assumptions to be made that affect the reported balances of assets and liabilities as on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. All the assets and liabilities have been classified as current or non-current as per the Company''s normal operating cycle and other criteria set out in Schedule III to the Companies Act, 2013. Accounting estimates could change from period to period. Actual results could differ from these estimates. Appropriate changes in estimates are made as and when the Management becomes aware of the changes in the circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which the changes are made and if material, their effects are disclosed in the notes to the financial statements.

1.03 Revenue recognition

(a) Revenue from sale of goods is recognized on transfer of all significant risks and rewards of ownership to the buyer. The amounts recognized as sale is exclusive of Sales tax/VAT and are net of returns. It is stated at gross and net of excise duty. (b) Income from conversion job is recognized on its completion and on its acceptance by the customers.

(c) Dividend income is accounted for in the year in which the right to receive the same is established. (d) Interest income is recognized using the time-proportion method, based on rates implicit in the transaction.

1.04 Fixed assets

Tangible assets shown under gross block are valued at cost of acquisition inclusive of inward freight, duties, taxes and other incidental expenses/adjustments related to its acquisition. All such direct costs are capitalized when the tangible fixed assets are ready for use. Intangible assets relating to product development are recorded at actual cost incurred on the development of products and are capitalized once the products receive approval from relevant authorities and the same are carried at cost less accumulated amortization.

1.05 Depreciation and amortization

a. (i) Schedule II to the Companies Act, 2013 prescribes useful lives for fixed assets and allows Companies to use higher/lower useful lives and residual values if such useful lives and residual values can be technically supported and justification for difference is disclosed in the financial statements.

(ii) Considering the applicability of Schedule II, the management has re-estimated useful life and residual values of all its fixed assets. The management believes that the depreciation rates currently used fairly reflect its estimate of the useful lives and residual values of fixed asset.

b. Depreciation on tangible assets purchased during the year has been calculated as under: (i) All assets (except leasehold interest): On written down value basis. (ii) Lease hold land: On straight line basis over the period of lease. (iii) Intangible assets: Over a period of approximately four years, so as to effectively depreciate the assets over the specified useful life leaving behind a residual value of five percent.

c. Depreciation on additions to fixed assets during the current year are charged on pro-rata basis, for the period of use.

1.06 Impairment of assets

An impairment loss is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired.

1.07 Investments

Trade investments are the investments made to enhance the Company''s business interests. Investments are either classified as current or long-term based on the Management''s intention. Current investments are carried at cost. Cost of overseas investments comprises the Indian rupee value of consideration paid for the investment translated at the exchange rate prevalent on the date of investment. Long-term investments are carried at cost less provisions recorded to recognize any decline, other than temporary, in the carrying value of each investment.

1.08 Inventories

(a) Traded goods, raw materials and packing materials: At cost or net realizable value, whichever is lower. (b)Process stock: At cost or estimated realizable value, whichever is lower. (c) Finished goods: At cost or net realizable value, whichever is lower and are inclusive of cenvat thereon. (d) Excise duty relating to the difference between closing and opening stock is recognized as part of changes in inventories of finished goods, work in progress and stock-in trade. Note: Cost is determined on a weighted average basis.

1.09 Employee benefits

Gratuity: The Company has computed its liability towards future payments of gratuity to employees, on actuarial basis and the charge for current year is debited to the Statement of Profit and Loss.

Superannuation: The Company contributes towards superannuation fund, for future payment of retirement benefits to employees. The contributions accruing during each year are charged to the Statement of Profit and Loss.

Leave encashment: Liabilities are determined by actuarial valuation done at the end of the year and the charge for the current year is debited to the Statement of Profit and Loss.

Provident fund: Employer''s contribution to provident fund is charged to the Statement of Profit and Loss.

1.10 Foreign currency transactions

Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction or that approximates the actual rate on the date of the transaction. Any income or expense on account of exchange difference, either on settlement or on translation is recognized in the Statement of Profit and Loss. Assets and liabilities in foreign currencies are restated at the year-end exchange rates.

1.11 Leases

Lease rental payments under operating lease are recognized as an expense on straight line basis in the Statement of Profit and Loss over the lease term.

1.12 Post-sale-client support and warranties

The Company provides its clients with a fixed-period warranty for corrections of errors and support on all its fixed-price, fixed-time frame contracts. Costs associated with such support services are accrued at the time when related revenues are recorded and included in the Statement of Profit and Loss.

1.13 Taxes on income

Current tax: Provision for current tax is made based on tax liability computed after considering tax allowances and exemptions. Deferred tax: Provision for deferred tax is made using the applicable rate of taxation, for all timing differences, which arise during a year and are reversed in subsequent periods.

1.14 Provisions and contingent liabilities

Based on the best estimate of the Management, provisions are determined on the outflow of economic benefits, which are required to settle obligations, as at the reporting date. Where no reliable estimate can be made, a disclosure is made as contingent liability. Disclosure for contingent liability is also made when there is a possible obligation that may, but probably will not, require an outflow of the Company''s resources.

1.15 Cash flow statement

Cash flows are reported using indirect method, whereby profit before tax is adjusted for the effects of transactions of non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows.

1.16 Dividend and its presentation

To facilitate comparison w.r.t previous year, dividend is shown as an appropriation of reserve and as part of short term provision. However, retention in equity can be facilitated, in which case reserve and short term provisions would be more by the value of dividend and tax thereon.

1.17 Schedule III

The financial statements have been drawn as per Schedule III to the Companies Act, 2013. Nonetheless, wherever data is nil, the line item has been omitted to facilitate ease in reading. This includes the following (i) Money received against share warrants (ii) Share application money pending allotment (iii) Deferred Government grants (iv) Minority interest (v) Foreign currency monetary item translation differences (vi) Tangible assets pertaining to capital work-in-progress (vii) Goodwill on consolidation .


Mar 31, 2016

Company information

Ador Fontech Limited is incorporated in India on August 22, 1974 and is a frontrunner organization that operates on the philosophy of ''partnering'' with its clients in recommending and implementing value-added fusion, surfacing, spraying and environmental solutions. The Company is dedicated to the supply of products, services and solutions that meet and exceed the needs of its end-users under the broad gamut of ''Life enhancement of industrial components''. The Company is a public limited company [CIN: L31909KA1974PLC020010] & is listed on the Bombay Stock Exchange (BSE).

Note1 1.0 Summary of Significant Accounting Policies

The following significant accounting policies have been adopted in the preparation and presentation of the financial statements:

1.01 Basis of preparation of financial statements

These financial statements are prepared in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis except for certain financial instruments which are measured at fair values. 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) Rules, 2014, the provisions of the Act (to the extent notified) and guidelines issued by the Securities and Exchange Board of India (SEBI). 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.

1.02 Use of estimates

The preparation of financial statements requires estimates and assumptions to be made that affect the reported balances of assets and liabilities as on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. All the assets and liabilities have been classified as current or non-current as per the Company''s normal operating cycle and other criteria set out in Schedule III to the Companies Act, 2013. Accounting estimates could change from period to period. Actual results could differ from these estimates. Appropriate changes in estimates are made as and when the Management becomes aware of the changes in the circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which the changes are made and if material, their effects are disclosed in the notes to the financial statements.

1.1 Revenue recognition

a. Revenue from sale of goods is recognized on transfer of all significant risks and rewards of ownership to the buyer. The amounts recognized as sale is exclusive of Sales tax/VAT and are net of returns. It is stated at gross and net of excise duty.

b. Income from conversion job is recognized on its completion and on its acceptance by the customers.

c. Dividend income is accounted for in the year in which the right to receive the same is established.

d. Interest income is recognized using the time-proportion-method, based on rates implicit in the transaction.

1.2 Fixed assets

Tangible assets shown under gross block are valued at cost of acquisition inclusive of inward freight, duties, taxes and other incidental expenses/adjustments related to its acquisition. All such direct costs are capitalized when the tangible fixed assets are ready for use. Intangible assets relating to product development are recorded at actual cost incurred on the development of products and are capitalized once the products receive approval from relevant authorities and the same are carried at cost less accumulated amortization.

1.3 Depreciation and amortization

a. (i) Schedule II to the Companies Act, 2013 prescribes useful lives for fixed assets and allows Companies to use higher/lower useful lives and residual values if such useful lives and residual values can be technically supported and justification for difference is disclosed in the financial statements. (ii) Considering the applicability of Schedule II, the Management has re-estimated useful lives and residual values of all its fixed assets. Management also believes that the depreciation rates currently used fairly reflect its estimate of useful lives and residual values of fixed asset.

b. Depreciation on tangible assets purchased during the year have been calculated as under: (i) All assets (except leasehold interest): On written down value basis. (ii) Lease hold land: On straight line basis over the period of lease. (iii) Intangible assets: Over a period of approximately four years, so as to effectively depreciate the assets over the specified useful lives leaving behind a residual value of five percent.

c. Depreciation on additions to fixed assets during the current year are charged on pro-rata-basis, for the period of use.

1.4 Impairment of assets

An impairment loss is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

1.5 Investments

Trade investments are investments made to enhance the Company''s business interests. Investments are either classified as current or long-term based on the Management''s intention. Current investments are carried at cost. Cost of overseas investments comprises the Indian rupee value of consideration paid for the investment translated at the exchange rate prevalent on the date of investment. Long-term investments are carried at cost less provisions recorded to recognize any decline, other than temporary, in the carrying value of each investment.

1.6 Inventories

a. Traded goods, raw materials and packing materials: At cost or net realizable value, whichever is lower.

b. Process stock: At cost or estimated realizable value, whichever is lower.

c. Finished goods: At cost or net realizable value, whichever is lower and are inclusive of cenvat thereon.

d. Excise duty relating to the difference between closing and opening stock is recognised as part of changes in inventories of finished goods, work-in-progress and stock-in trade.

Note: Cost is determined on a weighted average basis.

1.7 Employee benefits

Gratuity: The Company has computed its liability towards future payments of gratuity to employees, on actuarial basis and the charge for current year is debited to the Statement of Profit and Loss. Superannuation: The Company contributes towards superannuation fund, for future payment of retirement benefits to employees. The contributions accruing during each year are charged to the Statement of Profit and Loss.

Leave encashment: Liabilities are determined by actuarial valuation done at the end of the year and the charge for the current year is debited to the Statement of Profit and Loss.

Provident fund: Employer''s contribution to provident fund is charged to the Statement of Profit and Loss.

1.8 Foreign currency transactions

Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction or that approximates the actual rate on the date of the transaction. Any income or expense on account of exchange difference, either on settlement or on translation is recognized in the Statement of Profit and Loss. Assets and liabilities in foreign currencies are restated at the year-end-exchange rates.

1.9 Leases

Lease rental payments under operating lease are recognized as an expense on straight line basis in the Statement of Profit and Loss over the lease term.

1.10 Post-sale-client support and warranties

The Company provides its clients with a fixed-period warranty for corrections of errors and support on all its fixed-price, fixed-time-frame contracts. Costs associated with such support services are accrued at the time when related revenues are recorded and included in the Statement of Profit and Loss. The Company estimates such costs based on historical experience and the same are reviewed annually for any material changes in assumptions.

1.11 Taxes on income

Current tax: Provision for current tax is made based on tax liability computed after considering tax allowances and exemptions. Deferred tax: Provision for deferred tax is made using the applicable rate of taxation, for all timing differences, which arise during a year and are reversed in subsequent periods.

1.12 Provisions and contingent liabilities

Based on the best estimate of the Management, provisions are determined on the outflow of economic benefits, which are required to settle obligations, as at the reporting date. Where no reliable estimate can be made, a disclosure is made as contingent liability. Disclosure for contingent liability is also made when there is a possible obligation that may, but probably will not, require an outflow of the Company''s resources.

1.13 Cash flow statement

Cash flows are reported using indirect method, whereby profit before tax is adjusted for the effects of transactions of non-cash-nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. Cash flows from operating, investing and financing activities of the Company are segregated accordingly.

Note 2:

2.01 Share capital: The Company has only one class of shares, referred to as equity shares having a par value of '' 2/- per share. Each holder of equity share is entitled to one vote per share and dividend as may be declared at the Annual General Meeting. The right of the shareholders is governed by the Articles of Association and the Companies Act. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

d. As on the date of the Balance Sheet

(i) The Company has not issued any equity share as fully paid pursuant to contracts without payment being received in cash. (ii) The Company has not issued any fully paid bonus share. (iii) The Company also did not buy back any equity share.

e. Issue/conversion of equity shares: As on the date of the Balance Sheet, the Company has not issued securities like convertible preference shares, convertible debentures etc., which are convertible in to equity/preference shares.


Mar 31, 2015

1.01 Basis of preparation of the financial statements

These financial statements are prepared in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on accrual basis except for certain financial instruments which are measured at fair values. 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) Rules, 2014, the provisions of the Act ( to the extent notified) and guidelines issued by the Securities and Exchange Board of India (SEBI). 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.

1.02 Use of estimates

The preparation of financial statements requires estimates and assumptions to be made that affect the reported balances of assets and liabilities as on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. All assets and liabilities have been classified as current or non-current as per the Company's normal operating cycle and other criteria set out in Schedule III to the Companies Act, 2013. Accounting estimates could change from period to period. Actual results could differ from these estimates.

1.03 Revenue recognition

a. Revenue from sale of goods is recognised on transfer of all significant risks and rewards of ownership to the buyer. The amount recognised as sale is exclusive of Sales tax/VAT and are net of returns. It is stated at gross and net of excise duty.

b. Income from conversion job is recognised on its completion and on its acceptance by the customers.

c. Dividend income is accounted for in the year in which the right to receive the same is established.

d. Interest income is recognised using time-proportion-method, based on rates implicit in the transaction.

1.04 Fixed assets

Tangible assets shown under gross block are valued at cost of acquisition inclusive of inward freight, duties, taxes and other incidental expenses/adjustments related to its acquisition. All such direct costs are capitalised when the tangible fixed assets are ready for use. Intangible assets relating to product development are recorded at actual cost incurred on the development of products and are capitalised once the products receive approval from relevant authorities and the same are carried at cost less accumulated amortisation.

1.05 Depreciation and amortisation

a. (i) Till the year ended March 31,2014, depreciation rates prescribed under Schedule XIV were treated minimum rates and the Company was not allowed to charge depreciation at lower rates, even if such lower rates were justified by the estimated useful life of the asset. From the current year Schedule XIV has been replaced by Schedule II of the Companies Act, 2013. The replaced Schedule II prescribes useful lives for fixed assets which, in many cases, are different from the lives prescribed under the erstwhile Schedule XIV.However, Schedule II allows Companies to use higher /lower useful lives and residual values if such useful lives and residual values can be technically supported and justification for difference is disclosed in the financial statements. (ii) Considering the applicability of Schedule II, the Management has re-estimated useful lives and residual values of all its fixed assets. The Management believes that depreciation rates currently used fairly reflects its estimate of useful lives & residual values of fixed assets and in compliance of Schedule II of the Companies Act, 2013.

b. Residual value of assets whose useful lives had expired as at the beginning of the year were charged to Reserves & Surplus.

c. Depreciation on tangible assets purchased during the year has been calculated as under-(i) All assets (except leasehold interest): On written down value basis. (ii) Lease hold land: On straight line basis over the period of lease. (iii) Intangible assets: Over a period of approximately four years-so as to effectively depreciate assets over the specified useful lives leaving behind a residual value of five percent.

d. Depreciation on additions to fixed assets during the current year are charged on pro-rata basis, for the period of use.

1.06 Impairment of assets

An impairment loss is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting period is reversed, if there has been a change in the estimate of recoverable amount.

1.07 Investments

Trade investments are investments made to enhance the Company's business interests. Investments are either classified as current or long-term based on the Management's intention. Current investments are carried at cost. Cost of overseas investments comprise Indian rupee value of consideration paid for investment translated at the exchange rate prevalent on the date of the investment. Long-term investments are carried at cost less provisions recorded to recognise any decline, other than temporary, in the carrying value of each investment.

1.08 Inventories (cost is determined on a weighted average basis)

a. Traded goods, raw materials and packing materials: At cost or net realisable value, whichever is lower.

b. Process stock: At cost/estimated realisable value, whichever is lower.

c. Finished goods: At cost or net realisable value, whichever is lower and are inclusive of cenvat thereon.

d. Excise duty relating to the difference between closing and opening stock is recognised as part of changes in inventories.

1.09 Employee benefits

Gratuity: The Company has computed its liability towards future payment of gratuity to employees, on actuarial basis & the charge for current year is debited to the Statement of Profit and Loss.

Superannuation: The Company contributes towards superannuation fund, for future payment of retirement benefits to employees. The contributions accruing during each year are charged to the Statement of Profit and Loss.

Leave encashment: Liabilities are determined by actuarial valuation done at the end of the year and the charge for the current year is debited to the Statement of Profit and Loss.

Provident fund: Employer's contribution to provident fund is charged to the Statement of Profit and Loss.

1.10 Foreign currency transactions

Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction or that approximates the actual rate on the date of the transaction. Any income or expense on account of exchange difference, either on settlement or on translation is recognised in the Statement of Profit and Loss. Assets and liabilities in foreign currencies are restated at the year end exchange rate.

1.11 Leases

Lease rental payments under operating lease are recognised as an expense on straight line basis in the Statement of Profit and Loss over the lease term.

1.12 Post-sale-client support and warranties

The Company provides its clients with a fixed-period-warranty for corrections of errors and support on all its fixed price, fixed-time- frame contracts. Costs associated with such support services are accrued at the time when related revenues are recorded and included in the Statement of Profit and Loss. The Company estimates such costs based on historical experience and reviews the same annually for any material changes in assumptions.

1.13 Taxes on income

Current tax: Provision for current tax is made based on tax liability computed after considering tax allowances.

Deferred tax: Provision for deferred tax is made using the applicable rate of taxation, for all timing differences, which arise during a year and are reversed in subsequent periods.

1.14 Provisions and contingent liabilities

Based on the best estimate of the Management, provisions are determined on the outflow of economic benefits, which are required to settle obligations, as at the reporting date. Where no reliable estimate can be made, a disclosure is made as contingent liability. Disclosure for contingent liability is also made when there is a possible obligation that may, but probably will not, require an outflow of the Company's resources.

1.15 Cash flow statement

Cash flows are reported using indirect method, whereby profit before tax is adjusted for the effects of transactions of non-cash nature, any deferrals or accruals of past or future operating cash receipts/payments and item of income or expenses associated with investing/financing cash flows. Cash flows from operating investing and financing activities of the Company are segregated accordingly.


Mar 31, 2014

Basis of preparation of financial statements

These financial statements are prepared under the historical cost basis of accounting and evaluated on a going concern basis, with revenues recognised and expenses accounted for on their accrual to comply in all material aspects with the Accounting Standards notified under the Companies (Accounting Standards) Rules 2006 (as amended) and the relevant provisions of the Companies Act, 1956 read with General Circular #15/2013 dated 13th September 2013 issued by the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013 and the guidelines issued by the Securities and Exchange Board of India (SEBI).

Use of estimates

The preparation of financial statements requires estimates and assumptions to be made that affect the reported balances of assets and liabilities as on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. All the assets and liabilities have been classified as current or non current as per the Company''s normal operating cycle and other criteria set out in Schedule VI to the Companies Act, 1956. Accounting estimates could change from period to period. Actual results could differ from these estimates. Appropriate changes in estimates are made as and when the Management becomes aware of the changes in the circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which the changes are made and if material their effects are disclosed in the notes to the financial statements.

The following significant accounting policies have been adopted in the preparation and presentation of the financial statements:

1.1 Revenue recognition

a. Revenue from sale of goods is recognised on transfer of all significant risks and rewards of ownership to the buyer. The amount recognised as sale is exclusive of Sales tax/VAT and are net of returns. It is stated at gross and net of excise duty.

b. Income from conversion job is recognised on its completion and on its acceptance by the customers.

c. Dividend income is accounted for in the year in which the right to receive the same is established.

d. Interest income is recognised using time-proportion method, based on rates implicit in the transaction.

1.2 Fixed assets

Tangible assets shown under gross block are valued at cost of acquisition inclusive of inward freight, duties, taxes and other incidental expenses/adjustments related to its acquisition. All such direct costs are capitalised when the tangible fixed assets are ready for use. Intangible assets relating to product development are recorded at actual cost incurred on the development of products and are capitalised once the products are approved by the authorities and the same is being carried at cost less accumulated amortisation.

1.3 Depreciation and amortisation

a. Depreciation on tangible assets has been calculated in accordance with the revised Schedule XIV of the Companies Act, 1956:

i. All assets (except leasehold interest): On written down value basis.

ii. Lease hold land: On straight line basis (over lease period).

iii. Intangible assets: Over a period of approx. four years.

b. Depreciation on additions to fixed assets during the current year are charged on pro-rata basis, for the period of use.

c. Depreciation methods, useful lives and residual values of fixed assets are reviewed at each reporting date.

1.4 Impairment of assets

An impairment loss is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

1.5 Investments

Investments are valued at cost inclusive of dividend re-invested thereon (where applicable).

1.6 Inventories

a. Traded goods, raw materials and packing materials: At cost or net realisable value, whichever is lower.

b. Process stock: At cost or estimated realisable value, whichever is lower.

c. Finished goods: At cost or net realisable value, whichever is lower and are inclusive of cenvat thereon.

d. Excise duty relating to the difference between closing and opening stock is recognised as part of changes in inventories of finished goods, work in progress and stock-in trade.

Note: Cost is determined on a weighted average basis.

1.7 Employee benefits

a. Gratuity: The Company has computed its liability towards future payments of gratuity to employees, on actuarial basis and the charge for current year is debited to the Statement of Profit and Loss.

b. Superannuation: The Company contributes towards superannuation fund, for future payment of retirement benefits to employees. The contributions accruing during each year are charged to the Statement of Profit and Loss.

c. Leave encashment: Liabilities are determined by actuarial valuation done at the end of the year and the charge for the current year is debited to the Statement of Profit and Loss.

d. Provident fund: Employer''s contribution to provident fund is charged to the Statement of Profit and Loss.

1.8 Foreign currency transactions

Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction or that approximates the actual rate on the date of the transaction. Any income or expense on account of exchange difference, either on settlement or on translation is recognised in the Statement of Profit and Loss. Assets and liabilities in foreign currencies are restated at the year-end exchange rates.

1.9 Leases

Lease rental payments under operating lease are recognised as an expense on straight line basis in the Statement of Profit and Loss over the lease term.

1.10 Taxes on income

a. Current tax: Provision for current tax is made based on tax liability computed after considering tax allowances and exemptions.

b. Deferred tax: Provision for deferred tax is made using the applicable rate of taxation, for all timing differences, which arise during a year and are reversed in subsequent periods.

1.11 Provisions and contingent liabilities

Based on the best estimate of the Management, provisions are determined on the outflow of economic benefits, which are required to settle obligations, as at the reporting date. Where no reliable estimate can be made, a disclosure is made as contingent liability. Disclosure for contingent liability is also made when there is a possible obligation that may, but probably will not, require an outflow of the Company''s resources.

1.12 Cash flow statement

Cash flows are reported using indirect method, whereby profit before tax is adjusted for the effects of transactions of non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. Cash flows from operating, investing and financing activities of the Company are segregated accordingly.

The Company adopts the accrual concept in the preparation of Accounts. Assets and liabilities are recorded at historical cost. These costs are not adjusted to reflect the changing value in the purchasing power of money (inflation). Further, based on the nature of activities, the Company has determined its operating cycle as twelve months for the purpose of classification of its assets and liabilities as current and non-current.

2.01 Shareholders'' fund

The Company has only one class of shares, referred to as equity shares having a par value of Rs. 2/- per share. Each holder of equity share is entitled to one vote per share and dividend as may be declared at the Annual General Meeting. The right of the shareholders is governed by the Articles of Association and the Companies Act.

d. Share warrants

Rupees two hundred and sixty seven lakhs was received from J B Advani and Company Private Limited (JBA), the promoters towards issue of 17,50,000 warrants on preferential basis. Since necessary approvals were not received before the close of the year, the share warrants were not issued. The amount has since been refunded as per the provisions of the Companies Act, 2013 with commitment/undertaking from JBA executed for specific performance / requirements to subscribe, subject to necessary approvals/consents from requisite authorities.

e. As on the date of the Balance Sheet

i. The Company has not issued any equity share as fully paid pursuant to contracts without payment being received in cash.

ii. The Company has not issued any fully paid bonus share.

iii. The Company also did not buy back any equity share.

f. Issue/conversion of equity shares

As on the date of the Balance Sheet, the Company has not issued securities like convertible preference shares, convertible debentures, etc., which are convertible in to equity/preference shares.


Mar 31, 2013

1.01 Revenue recognition

(a) Revenue from sale of goods is recognised on transfer of all significant risks and rewards of ownership to the buyer. The amount recognised as sale is exclusive of sales tax/VAT and are net of returns. It is stated at gross and net of excise duty.

Excise duty relating to the difference between closing and opening stock is recognised as part of changes in inventories of finished goods, work in progress and stock-in trade.

(b) Income from conversion job is recognised on its completion and on its acceptance by the customers.

(c) Dividend income is accounted for in the year in which the right to receive the same is established.

(d) Interest income is recognised using the time-proportion method, based on rates implicit in the transaction.

1.02 Fixed assets

Tangible assets shown under gross block are valued at cost of acquisition inclusive of inward freight, duties, taxes and other incidental expenses/adjustments related to its acquisition. All such direct costs are capitalised when the tangible fixed assets are ready for use. Intangible assets relating to product development are recorded at actual cost incurred on the development of products and are capitalised once the products receive approval from relevant authorities and the same are carried at cost less accumulated amortisation.

1.03 Depreciation and amortisation

(a) Depreciation on tangible assets has been calculated in accordance with the revised Schedule XIV of the Companies Act, 1956: (i) All assets (except leasehold interest): On written down value basis.

(ii) Lease hold land: On straight line basis over the period of lease.

(iii) Intangible assets: Over a period of approximately four years.

(b) Depreciation on additions to fixed assets during the current year are charged on pro-rata basis, for the period of use.

(c) Depreciation methods, useful lives and residual values of fixed assets are reviewed at each reporting date.

1.04 Impairment of assets

An impairment loss is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

1.05 Investments

Valued at cost inclusive of dividend re-invested thereon (where applicable).

1.06 Inventories

(a) Traded goods, raw materials and packing materials: At cost or net realisable value, whichever is lower.

(b) Process stock: At cost or estimated realisable value, whichever is lower and

(c) Finished goods: At cost or net realisable value, whichever is lower and are inclusive of cenvat thereon. Note: Cost is determined on a weighted average basis.

1.07 Employee benefits

(a) Gratuity: The Company has computed its liability towards future payments of gratuity to employees, on actuarial basis and the charge for current year is debited to the Statement of Profit and Loss.

(b) Superannuation: The Company contributes towards superannuation fund, for future payment of retirement benefits to employees. The contributions accruing during each year are charged to the Statement of Profit and Loss.

(c) Leave encashment: Liabilities are determined by actuarial valuation done at the end of the year and the charge for the current year is debited to the Statement of Profit and Loss.

(d) Provident fund: Employer''s contribution to provident fund is charged to the Statement of Profit and Loss.

1.08 Foreign currency transactions

Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction or that approximates the actual rate on the date of the transaction. Any income or expense on account of exchange difference, either on settlement or on translation is recognised in the Statement of Profit and Loss. Assets and liabilities in foreign currencies are restated at the year-end exchange rates.

1.09 Leases

Lease rental payments under operating lease are recognised as an expense on straight line basis in the Statement of Profit and Loss over the lease term.

1.10 Taxes on income

(a) Current tax: Provision for current tax is made based on tax liability computed after considering tax allowances and exemptions.

(b) Deferred tax: Provision for deferred tax is made using the applicable rate of taxation, for all timing differences, which arise during a year and are reversed in subsequent periods.

1.11 Provisions and contingent liabilities

Based on the best estimate of the Management, provisions are determined on the outflow of economic benefits, which are required to settle obligations, as at the reporting date. Where no reliable estimate can be made, a disclosure is made as contingent liability. Disclosure for contingent liability is also made when there is a possible obligation that may, but probably will not, require an outflow of the Company''s resources.

1.12 Cash flow statement

Cash flows are reported using indirect method, whereby profit before tax is adjusted for the effects of transactions of non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. Cash flows from operating, investing and financing activities of the Company are segregated accordingly.


Mar 31, 2012

Basis of preparation of financial statements

These financial statements are prepared under the historical cost basis of accounting and evaluated on a going concern basis, with revenues recognized and expenses accounted for on their accrual to comply in all material aspects with the applicable accounting principles and applicable Accounting Standards notified U/s. 211 (3C) of the Companies Act, 1956; other relevant provisions of the Companies Act, 1956 and the guidelines issued by the Securities and Exchange Board of India (SEBI).

Use of estimates

The preparation of financial statements require estimates and assumptions to be made that affect the reported balances of assets as on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Accounting estimates could change from period to period. Actual results could differ from these estimates. Appropriate changes in estimates are made as and when the Management becomes aware of the changes in the circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which the changes are made and if material, their effects are disclosed in the notes to the financial statements.

The following significant accounting policies are adopted in the preparation and presentation of these financial statements:

1 Revenue recognition

(a) Sales are recognized when goods are supplied and are recorded net of discounts. Sale revenues are presented net of value-added taxes in the Statement of profit and loss.

(b) Income from conversion job is recognized on its completion and on its acceptance by the customers.

(c) Dividend income is accounted for in the year in which the right to receive the same is established.

(d) Interest income is recognized using the time-proportion method, based on rates implicit in the transaction.

2 Fixed assets

Tangible assets shown under gross block are valued at cost of acquisition inclusive of inward freight, duties, taxes and other incidental expenses related to its acquisition. All such direct costs are capitalized when the tangible fixed assets are ready for use.

Intangible assets relating to product development are recorded at actual cost incurred on development of products and are capitalized once the products receive approval from the relevant authorities and the same are carried at cost less accumulated depreciation.

3 Depreciation and amortization

(a) Depreciation on tangible assets has been calculated in accordance with the revised Schedule XIV of the Companies Act, 1956 as under:

(i) All assets except leasehold interest-on written down value basis.

(ii) On lease hold land-on straight line basis over the period of lease.

(iii) In case of intangible assets-over a period of four years.

(b) Depreciation on additions to fixed assets during the current year are charged on a pro-rata basis, for the period of use.

(c) Depreciation methods, useful lives and residual values of fixed assets are reviewed at each reporting date.

4 Impairment of assets

An impairment loss is charged to the Statement of profit and loss in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

5 Investments

Valued at cost, inclusive of dividend reinvested thereon.

6 Inventories

(a) Trading goods - At cost or net realizable value, whichever is lower.

(b) Raw materials and packing materials - At cost or net realizable value.

(c) Process stock - At cost or estimated realizable value, whichever is lower and

(d) Finished goods - At cost or net realizable value, whichever is lower and are inclusive of convert thereon.

Note: Cost is determined on a weighted average basis.

7 Employee benefits

(a) Gratuity: The Company has computed its liability towards future payments of gratuity to employees, on actuarial basis and the charge for the current year is debited to the Statement of profit and loss.

(b) Superannuation: The Company contributes towards its employees' superannuation fund, for future payment of retirement benefits to employees. The contributions accruing during each year are charged to the Statement of profit and loss.

(c) Leave encashment: Liabilities are determined by actuarial valuation done at the end of the year and the charge for current year is debited to the Statement of profit and loss.

(d) Provident fund: Employer's contribution to provident fund is charged to the Statement of profit and loss.

8 Foreign currency transactions

Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction or that approximates the actual rate on the date of transaction. Any income or expense on account of exchange difference, either on settlement or on translation, is recognised in the Statement of profit and loss. Liabilities payable in foreign currency are restated at the year-end exchange rates.

9 Leases

Lease rental payments under operating leases are recognized as an expense on a straight line basis in the Statement of profit and loss over the lease term.

10 Taxes on income

(a) Current tax

Provision for current tax is made based on tax liability computed after considering tax allowances and exemptions.

(b) Deferred tax

Provision for deferred tax is made using the applicable rate of taxation, for all timing differences which arise during the year and are reversed in subsequent periods.

11 Provisions and contingent liabilities

Based on the best estimate of the Management, provisions are determined of the outflow of economic benefits which are required to settle the obligation as at the reporting date. Where no reliable estimate can be made, disclosure is made as contingent liability. A disclosure for a contingent liability is also made when there is a possible obligation that may, but probably will not, require an outflow of the Company's resources.

12 Cash flow statement

Cash flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of transactions of non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. Cash flows from operating, investing and financing activities of the Company are segregated, accordingly.


Mar 31, 2011

These accounts have been prepared under the historical cost basis of accounting and evaluated on a going concern basis with revenues recognised and expenses accounted for on their accrual.

The financial statements have been prepared in conformity with the generally accepted accounting principles and accounting standards referred to in Section 211(3C) of the Companies Act, 1956.

a. Sale of manufactured items are net of excise duty and accounted for on despatch. Income from services is recognised on its completion and acceptance by the customers.

b. Inventories : Inventories comprise costs of purchase, conversion and other costs incurred in bringing the inventories to their present location and condition. Raw materials, work-in-progress, finished and traded goods are valued at lower of cost and net realisable value. Excise duty is included in the value of finished goods inventory. Cost is determined on a weighted average basis. Customs duty on goods where title has passed to the Company is included in the value of inventory. The net realisable value of work-in-progress is determined with reference to the estimated selling price less estimated cost of completion and costs necessary to make sale of related finished goods.

c. Investments are valued at cost (including dividends re-invested).

d. Fixed assets shown under gross block are valued at cost of acquisition inclusive of inward freight, duties, taxes and incidental expenses related to acquisition. They are shown at their historical value.

e. Depreciation has been provided on fixed assets in accordance with the rates specified in Schedule XIV of the Companies Act, 1956, on written down value basis on all assets of the Company, except for leasehold land which is amortised over the period of lease.

f. Expenditure incurred in foreign currencies have been recorded at the exchange rate current on the date when the relevant transaction(s) took place. Liabilities payable in foreign currencies are restated at the year end exchange rate(s). The gain or loss due to decrease/increase in rupee liability on account of fluctuations in the rate of exchange has been accounted in the Profit and loss account.

g. Employee benefits:

(i) Gratuity: The Company contributes to the gratuity of its employees through Group Gratuity Fund Trust. The contributions have been computed on actuarial basis so as to cover the Companys liability.

(ii) Superannuation: The Company contributes through an employees Superannuation Fund Trust for future payment of retirement benefits to its employees. The contributions accruing during each year are charged to the Profit and loss account.

(iii) Leave encashment liabilities are determined by actuarial valuation done at the end of the year and the current years charge is debited to the Profit and loss account.

(iv) Contribution to Provident Fund is charged to the Profit and loss account.

(v) The Company contributes to premia on the Life Insurance Policies of its employees and the same is charged to the Profit and loss account.

h. Commission and incentives paid to employees as part of pay for performance have been included under ‘commission on sales.

i. Product development costs are charged as an expense in the year in which they are incurred.

j. The carrying amounts of assets are reviewed at each Balance sheet date to ascertain any indication of impairment based on internal/external factors. An impairment loss is recognised based on estimation, if there would arise a significant variation, in the carrying amount of an asset over its estimated recoverable amount.

k. Provision for deferred taxation is made using the applicable rate of taxation, for all timing differences which arise during the year and are reversed in subsequent periods.

l. Provision for warranties for replacement of parts and rework of job works are based on past experience and are at a percentage of the sale value, as estimated by the Companys management. On a critical review of the warranty claims, reassessment has been made.


Mar 31, 2010

These accounts have been prepared under the historical cost basis of accounting and evaluated on a going concern basis with revenues recognised and expenses accounted for on their accrual.

The financial statements have been prepared in conformity with the Generally Accepted Accounting principles and Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956.

a. Sale of manufactured items are net of excise duty and accounted for on despatch. Income from services is recognised on its completion and acceptance by the customers.

b. Inventories are valued at lower of cost or net realisable value.

c. Investments are valued at cost (including dividends reinvested).

d. Fixed assets shown under gross block are valued at cost of acquisition inclusive of inward freight, duties, taxes and incidental expenses related to acquisition. They are shown at their historical value.

e. Depreciation has been provided on fixed assets in accordance with the rates specified in Schedule XIV of the Companies Act, 1956, on written down basis on all assets of the Company, except for leasehold land which is amortised over the period of the lease.

f. Expenditure incurred in foreign currencies have been recorded at the exchange rate current on the date when the relevant transaction (s) took place. Liabilities payable in foreign currencies are restated at the year-end exchange rate(s). The gain or loss due to decrease/increase in rupee liability on account of fluctuations in the rate of exchange has been accounted in the Profit and Loss Account.

g. Employee benefits:

(i) Gratuity: The Company contributes for gratuity to its employees through Group Gratuity Fund Trust. The contributions have been computed on actuarial basis so as to cover the Company’s liability.

(ii) Superannuation: The Company contributes through an Employees’ Superannuation Fund Trust for future payment of retirement benefits to its employees. The contributions accruing during each year are charged to the Profit and Loss Account.

(iii) Leave encashment liabilities are determined by actuarial valuation done at the end of the year and the current

year charge is debited to the Profit and Loss Account. (iv) Contribution to Provident fund is charged to the Profit and Loss Account.

(v) The Company contributes towards life insurance policies of its Employees and the same is charged to the Profit and Loss Account. h. Commission and incentives paid to employees as part of pay for performance has been categorised under “selling expenditure”.

i. Product development costs are charged as an expense in the year in which they are incurred.

j. The carrying amounts of assets are reviewed at each Balance Sheet date to ascertain any indication of impairment based on internal/external factors. An impairment loss is recognised based on estimation, if there would arise a significant variation, in the carrying amount of an asset over its estimated recoverable amount.

k. Provision for deferred taxation is made using the applicable rate of taxation for all timing differences which arise during the year and are reversed in subsequent periods.

l. Provision for warranties for replacement of parts and rework of job works are based on past experience and are at a percentage of the sale value, as estimated by the Company’s management.

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