Mar 31, 2010
1. BASIS OF PREPARATION:
The financial statements have been prepared to comply in all respects
with the notified accounting standards by Companies Accounting
Standards Rules,2006 and the relevant provision of the Companies Act,
1956(Ãthe Act").
The financial statements have been prepared under the historical cost
convention on an accrual basis in accordance with accounting principles
generally accepted in India. The accounting policies have been
consistently applied by the Company and are consistent with those used
in previous year.
2. USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosures of contingents liabilities at the date of
the financial statements and the results of operation during the
reporting period end. Although these estimates are based upon
nnanagementQs best knowledge of current events and actions, actual
results could differ from these estimates. Any revision to accounting
estimates is recognized prospectively.
3. FIXED ASSETS AND DEPRECIATION:
3.1 FIXED ASSETS:
Fixed Assets are stated at Cost of Acquisition inclusive of all
incidental expenses incurred towards acquisition and installation
thereof.
3.2 DEPRECIATION:
Depreciation on fixed assets is provided on Written down value method
at the rates and in the manner prescribed under schedule -XIV of the
Companies Act, 1956. Depreciation on fixed assets acquired during the
year is provided from date the said Assets have been put to use as
certified by the management.
4 IMPAIRMENT OF ASSETS:
An asset is treated as impaired when the carrying cost of assets
exceeds its recoverable value. An impairment loss is charged to the
profit and Loss Account in the current accounting year in which an
asset is identified as impaired. The impairment loss recognized in
prior accounting periods is reversed if there has been a change in the
estimate of recoverable amount as specified in Accounting Standard
(AS-28) on "Impairment of Assets".
5. INVESTMENTS:
5.1 Long Term
All other investments are classified as long-term investments are
carried at lower of cost and fair value determined on an individual
basis. Long-term investments are carried at cost.
5.2 Short Term
Investments that are readily realizable and intended to be held for not
more than a year are classified as Short term investments.
6. INVENTORIES:
Inventories are valued as follows:
(I) Inventories of raw materials, work-in-process, finished goods, and
stores & spares are valued at lower of cost and net realizable value.
(ii) Cost of Imported raw material and stock in bond include custom
duty thereon. Cost of Stock in transit include cost incurred up to the
date of Balance Sheet.
(iii) Cost of WIP & finished goods includes materials, labour and
manufacturing overheads and other costs incurred in bringing the
inventories to their present location.
7. BORROWING COSTS:
Borrowing cost relating to acquisition/construction of qualifying
assets are capitalized until the time all substantial activities
necessary to prepare the qualifying assets fortheir intended use are
complete. A qualifying asset is one that necessary takes substantial
period of time to get ready for its intended use/sale. All other
borrowing costs not eligible for inventorisation/captalisation are
charged to revenue.
8. RECOGNITION OF INCOME:
The Company generally follows the mercantile system of accounting
a. Sales are accounted for exclusive of sales tax.
b. Revenue is recognised when the property and all significant risks
and rewards of ownership are transferred to the buyer or no significant
uncertainty exists regarding the amount of consideration that is
derived from the sale of goods.
c. Purchases are accounted net of vat/cenvat availed thereon.
d. Maintenance & Services are accounted inclusive of service tax.
e. Interest income is recognized on time proportion basis.
9. EMPLOYEE BENEFITS:-
(I) Short Term Employee Benefits:
The employees of the company are entitled to leave encashment as per
the leave policy of the company. The liability in respect of leave
encashment which is expected to be encashed / utilised within twelve
months after balance sheet date is considered to be of short term
nature. The same is provided, based on an actuarial valuation carried
out by an independent actuary as atthe year end.
(ii) Long Term Employee Benefits:
Defined Contribution Plans
The Company has defined contribution plansfor post employment benefits
namely providentfund.
Under the provident fund plan, the company contributes to a Government
administered provident fund on behalf of its employees and has no
further obligation beyond making its contribution.
The company contributes to state plans namely employees pension
scheme, 1995 and has no further obligation beyond making its
contribution
The Company contribution to the above funds are charged to revenue
every year.
Defined Benefits Plans
The Company has a defined benefits plan namely Gratuity and leave
encashment for all its employees.
Long Term leave encashment includes provision for leave which is
expected to be encashed / utilised after twelve months from balance
sheet date.
Liability for defined benefit plan is provided on the basis of
valuations, as at balance sheet date, carried out by an independent
actuary. The actuarial valuation used by independent actuary for
measuring the liability is the projected unit credit method.
(iii) Termination benefits are recognised as an expenses as and when
incurred.
(iv) Actuarial gains and losses comprise experience adjustments and the
effects of changes in actuarial assumptions and are recognised
immediately in the profit and loss account as income or expenses.
10. FOREIGN CURRENCY TRANSACTIONS:
Foreign currency transactions are accounted at the rates prevailing on
the date of the transaction. Transactions are not covered by forward
exchange contract. Current assets and liabilities are translated at the
exchange rate ruling on the date of balance sheet. Any income or
expenses on account of exchange difference either on payment or on
translation are recognized in the profit and loss account except in
cases where these relate to acquisition of fixed assets, the same are
adjusted in the cost of the fixed assets.
11. TAXES ON INCOME:
Income tax provision based on the present tax laws in respect of
taxable income for the year and the deferred tax is treated in the
accounts based on the Accounting Standard (AS-22) on "Accounting for
Taxes on Income." The deferred tax assets and liabilities for the year,
arising out of timing difference, are reflected in the profit and loss
account. The cumulative effect thereof is shown in the Balance sheet.
The deferred tax assets are recognized only if there is a reasonable
certainty that the assets will be realized in future. Deferred Tax is
recognized, subject to the consideration of prudence of, on timing
differences, being the difference between taxable incomes and
accounting income that originated in one period and are capable of
reversal in one or more subsequent periods.
12. PROVISIONS, CONTINGENTS LIABILITIES & CONTINGENT ASSETS:,
A provision is recognized when an enterprise has a present obligation
as a result of past even; it is probable that an outflow of resources
will be required to settle the obligation, in respect of which a
reliable estimate can be made. Provisions are not discounted to its
present value and are determined based on best estimate required to
settle the obligation at the balance sheet date. These are reviewed at
each balance sheet date and adjusted to reflect the current best
estimates. Contingent liabilities are not provided for in this account,
and if any, the same is reflected in notes on account. Contingent
Assets are neither recognized nor disclosed in the financial
statements.
13. SEGMENT REPORTING:
The main business of the Company is Manufacture, supply, installation,
commissioning and servicing of all types of weighing systems, and all
other related activities which the Company revolve around the main
business and as such there are no separate reportable segments as
specified in Accounting Standard (AS-17) pm "Segment Reporting."
14. EARNINGS PER SHARE:
Basic earnings per share are calculated by dividing the net profit /
(loss) for the period attributable to equity shareholders (after
deducting attributable taxes) by average number of equity shares
outstanding during the period. The average number of equity shares
outstanding during the period is adjusted for the event of fresh issue
of shares to the public. For the purpose of calculating diluted
earnings per share, the net profit or loss for the period attributable
to equity shareholders and the average number of shares outstanding
during the period are adjusted for the effects of all dilutive
potential equity shares.