Mar 31, 2014
1. Basis of Accounting
The company maintains its accounts on accrual basis following the
historical cost conventions in accordance with generally accepted
Accounting principles (GAAP) and in compliance with the Accounting
Standards referred to in section 211(3C) and other requirements of the
Companies Act 1956. The preparation of the financial statements in
conformity with GAAP requires that the management of the company makes
estimates and assumptions that affect the reported amounts of income
and expenses of the period, the reported balances of assets and
liabilities and the disclosures relating to contingent liabilities as
of the date of the financial statements. Examples of such estimates
include the useful life of fixed assets and intangible assets,
provisions for doubtful debts/advances, future obligations in respect
of retirement benefit plans, etc. Actual results could differ from
these estimates.
2. Revenue Recognition
Revenue is recognized based on the nature of activity when
consideration can be reasonably measured and there exists reasonable
certainty of its recovery.
(a) Revenue from sale of goods is recognized when the substantial risks
and rewards of ownership are transferred to the buyer under the terms
of the contract.
(b) Other income is accounted for on accrual basis as and when the
right to receive arises.
3. Inventories Valuation
Inventories except by-products are valued at lower of cost or net
realisable value. By-Products are valued at net realisable value. For
valuation of finished goods, appropriate overheads are considered.
Closing Stock is inclusive of Excise duty. Store inventory is valued at
weighted average cost method.
4. Fixed Assets
The fixed assets are stated at cost net of Excise Duty, less
accumulated depreciation and impairment loss if any. All costs directly
related to the acquisition and installation of fixed assets are
capitalised and added to the respective assets. Borrowing Costs
relating to acquisition of fixed assets which takes substantial period
of time to get ready for its intended use are also included to the
extent they relate to the period till such assets are ready to put to
use. Fixed assets and stores are booked net of Excise Duty to avail the
benefit of CENVAT. Un-availed CENVAT is shown under the head "CENVAT
Recoverable" under Loans and Advances.
5. Depreciation
Depreciation is provided on all the fixed assets on Straight Line
Method basis in accordance with and in the manner specified in Schedule
XIV of the Companies Act, 1956.
6. Foreign Currency Transactions
Transactions denominated in foreign currency are normally recorded at
the exchange rates prevailing at the time of the transactions. Monetary
items denominated in foreign currencies at the year end are translated
at the year end exchange rates. Any income or expenses on account of
exchange difference either on settlement or on translation is
recognized in the Statement of Profit & Loss Account.
7. Expenditure on new projects & substantial expansions
Expenditure directly relating to construction/substantial expansion
activity is capitalized. Indirect expenditure incurred during
construction period is capitalized as part of the indirect construction
cost to the extent to which the expenditure is indirectly related to
construction or is incidental thereto. Income earned for during
construction period is deducted from the total of the indirect
expenditure.
As regards indirect expenditure on expansion, only that portion is
capitalized which represents the marginal increase in such expenditure
involved as a result of capital expansion. Both direct and indirect
expenditure are capitalized only if they increase the value of the
asset beyond its original standard of performance.
8. Impairment of Assets
At each balance sheet date, the carrying amounts of fixed assets are
reviewed by the management to determine whether there is any indication
that those assets suffered an impairment loss. If any such indication
exists, the recoverable amount of the asset is estimated in order to
determine the extent of impairment loss (recoverable amount is the
higher of an assets net selling price or value in use). In assessing
the value in use, the estimated future cash flows expected from the
continuing use of the assets and from its disposal are discounted to
their present value using a pre discounted rate that reflects the
current market assessment of time value of money and risks specific to
the asset.
Reversal of impairment loss is recognized immediately as income in the
profit and Loss account
9. Government Grants and Subsidies
Grants and subsidies from the government are recognized when there is
reasonable assurance that the grant/subsidy will be received and all
attaching conditions will be complied with.
When grant or subsidy relates to an expense item, it is recognized as
income over the periods necessary to match them on a systematic basis
with the related cost, which it is intended to compensate. Where
grant/subsidy relates to an asset, its value is deducted in arriving at
the carrying amount of the related asset against which grant/subsidy
has been received and further where the grant/subsidy is in the nature
of promoters contribution the amount of grant/subsidy is accounted for
as a capital reserve.
10. Investments
Investments that are readily realizable and intended to be held for
less then one year are classified as current investments, Current
investments are carried at lower of cost or market value, whereas long
term investments are carried at historical cost. The provision for
diminution in the value of investment other than temporary is provided
for.
11. Miscellaneous Expenditure
Preliminary expenses and cost incurred in raising funds are written off
to the Statement of profit and loss account in the year in which the
same are incurred.
12. Employees Benefits
Provision for Leave encashment liability and Provision for Gratuity is
made on Actuarial valuation basis. Provident Fund: Contribution to
provident fund is made in accordance with the provisions of the
Employees Provident Fund Act, 1952.
13. Tax Expenses
Tax expenses comprises of current and deferred income tax and wealth
tax. Current income tax is calculated at the amount expected to be paid
to the tax authorities in accordance with the Indian Income Tax Act,
1961. Deferred income taxes reflects the impact of current year timing
differences between taxable income and accounting income for the year
and reversal of timing differences of earlier years.
14. Deferred Tax
Deferred tax is measured based on the tax rates and the tax laws
enacted or substantively enacted at the balance sheet date. Deferred
tax assets are recognized only to the extent that there is virtual
certainty supported by convincing evidence that sufficient future
taxable income will be available against which such deferred tax assets
can be realized. If the company has carry forward of unabsorbed
depreciation and tax losses, deferred tax, assets are recognized only
if there is virtual certainty supported by convincing evidence that
such deferred tax assets can be realized against further taxable
profits. Unrecognized deferred tax assets of earlier years are
re-assessed and recognized to the extent that it has become reasonably
certain that further taxable income will be available against which
such deferred tax assets can be realized.
15. Earnings per Share
Basic earnings per share is calculated by dividing the net profit or
loss for the period attributable to equity shareholders (after
deducting preference dividend & taxes) by the weighted average number
of equity shares outstanding during the year. Equity shares that are
partly paid up are treated as a fraction of an equity share to the
extent they entitled to participate in dividends. The weighted average
numbers of equity shares outstanding during the year are adjusted for
events such as bonus issue, bonus element in a right issue to the
existing shareholders, share split and consolidation of shares.
For the purpose of calculating diluted EPS, the net profit or loss
attributable to equity share holders and weighted average number of
equity shares outstanding during the period are adjusted for the
effects of all dilutive potential equity shares.
16. Segment Reporting
a). Segment accounting policies are in line with the accounting
policies of the company. In addition, the following specific accounting
policies have been followed for segment reporting.
(1) . Segment revenue includes sales and other income directly
identifiable with/allocable to the segment including inter segment
sales.
(2) Expenses that are directly identifiable with/allocable to segment
are considered for determining the segment result. Expenses which
relate to the company as a whole and not allocable to segment are
included under Un-allocable corporate expenditure.
(3) Income which relates to the company as a whole and not allocable to
segments is included in un-allocable corporate income.
(4) Segment assets and liabilities include those directly identifiable
with the respective segments. Un-allocable corporate assets and
liabilities represent the assets and liabilities that relate to company
as a whole and not allocable to any segment. Un-allocable assets mainly
comprise corporate head office assets, investments and tax deposited
with the Income Tax Authorities. Un-allocable liabilities include
mainly Unsecured Loans and Tax Payable to Income Tax authorities.
b). Inter Segment transfer pricing
Segment revenue resulting from transactions with other business
segments is accounted on the basis of market price.
17. Provisions & Contingent liabilities
A provision is recognized when an enterprise has
(1) A present obligation as a result of past events.
(2) It is probable that an outflow of resources will be required to
settle the obligation.
(3) In respect of which a reliable estimate can be made.
The provisions are determined based on the best estimates required to
fulfill the obligation on the balance sheet date. The provisions are
reviewed at each balance sheet date and adjusted to reflect the current
best estimates.
Contingent liability is a possible obligation that arises from past
events and the existence of which will be confirmed only by the
occurrence or non-occurrence of one or more uncertain future events not
wholly within the control of the enterprise: or a present obligation
that arises from past events but is not recognized.
The Contingent liabilities are not recognized but are disclosed in the
notes. The Contingent Assets are neither recognized nor disclosed in
financial statements.
18. Cash and Cash equivalents
Cash and cash equivalents in the balance sheet comprise cash at bank,
cash in hand & short term investments.
19. Borrowing Cost
Borrowing Costs that are attributable to the acquisition, Construction
or Production of qualifying assets are capitalized as part of cost of
such asset till such asset is ready for its intended use or sale. A
qualifying asset is an asset that necessarily requires a substantial
period of time to get ready for its intended use or sale. All other
Borrowing Costs are recognized as an expense in the period in which
they are incurred.
Mar 31, 2012
1. Basis of Accounting
The company maintains its accounts on accrual basis following the
historical cost conventions in accordance with generally accepted
Accounting principles (GAAP) and in compliance with the Accounting
Standards referred to in section 211(3C) and other requirements of the
Companies Act 1956.
The preparation of the financial statements in conformity with GAAP
requires that the management of the company makes estimates and
assumptions that affect the reported amounts of income and expenses of
the period, the reported balances of assets and liabilities and the
disclosures relating to contingent liabilities as of the date of the
financial statements. Examples of such estimates include the useful
life of fixed assets and intangible assets, provisions for doubtful
debts/advances, future obligations in respect of retirement benefit
plans, etc. Actual results could differ from these estimates.
2. Revenue Recognition
Revenue is recognized based on the nature of activity when
consideration can be reasonably measured and there exists reasonable
certainty of its recovery.
(a) Revenue from sale of goods is recognized when the substantial risks
and rewards of ownership are transferred to the buyer under the terms
of the contract.
(b) Other income is accounted for on accrual basis as and when the
right to receive arises.
3. Inventories Valuation
Inventories except by-products are valued at lower of cost or net
realisable value. By-Products are valued at net realisable value. For
valuation of finished goods, appropriate overheads are considered.
Closing Stock is inclusive of Excise duty. Store inventory is valued at
weighted average cost method.
4. Fixed Assets
The fixed assets are stated at cost net of Excise Duty, less
accumulated depreciation and impairment loss if any. All costs directly
related to the acquisition and installation of fixed assets are
capitalised and added to the respective assets. Borrowing Costs
relating to acquisition of fixed assets which takes substantial period
of time to get ready for its intended use are also included to the
extent they relate to the period till such assets are ready to put to
use
5. Depreciation
Depreciation is provided on all the fixed assets on Straight Line
Method basis in accordance with and in the manner specified in Schedule
XIV of the Companies Act, 1956.
6. Research & Development
Revenue expenditure on research and development is charged under the
respective heads of accounts. Capital expenditure on research and
development is included as part of fixed assets and depreciated on the
same basis as other fixed assets.
7. Expenditure on new projects & substantial expansions
Expenditure directly relating to construction/substantial expansion
activity is capitalized. Indirect expenditure incurred during
construction period is capitalized as part of the indirect construction
cost to the extent to which the expenditure is indirectly related to
construction or is incidental thereto. Income earned for during
construction period is deducted from the total of the indirect
expenditure.
As regards indirect expenditure on expansion, only that portion is
capitalized which represents the marginal increase in such expenditure
involved as a result of capital expansion. Both direct and indirect
expenditure are capitalized only if they increase the value of the
asset beyond its original standard of performance.
10. Cenvat Credit
Fixed assets and stores are booked net of Excise Duty to avail the
benefit of CENVAT. Un- availed CENVAT is shown under the head "CENVAT
Recoverable" under Loans and Advances.
11. Commercial Tax
Commercial Tax liabilities are accounted for on the basis of Commercial
Tax Returns filed by the Company. Any additional liability that arises
at the time of assessment is accounted for in the year of finalization
of assessment.
12. Borrowing Cost
Borrowing Costs that are attributable to the acquisition, Construction
or Production of qualifying assets are capitalized as part of cost of
such asset till such asset is ready for its intended use or sale. A
qualifying asset is an asset that necessarily requires a substantial
period of time to get ready for its intended use or sale. All other
Borrowing Costs are recognized as an expense in the period in which
they are incurred.
13. Earnings Per Share
Basic earnings per share are calculated by dividing the net profit or
loss for the period attributable to equity shareholders (after
deducting preference dividend & taxes) by the weighted average number
of equity shares outstanding during the year. Equity shares that are
partly paid up are treated as a fraction of an equity share to the
extent they entitled to participate in dividends. The weighted average
numbers of equity shares outstanding during the year are adjusted for
events such as bonus issue, bonus element in a right issue to the
existing shareholders, share split and consolidation of shares. For the
purpose of calculating diluted EPS, the net profit or loss attributable
to equity share holders and weighted average number of equity shares
outstanding during the period are adjusted of all
dilutive potential equity shares.
14. Taxes on Income
Tax expenses comprises of current, deferred and fringe benefit tax.
Current income tax and fringe benefits tax is measured at the amount
expected to be paid to the tax authorities in accordance with the
Income Tax Act 1961. Deferred income taxes reflects the impact of
current year timing difference between taxable income and accounting
income for the year and reversal of timing difference of earlier years.
Deferred tax assets and liabilities are measured using the tax rates
and tax laws that have been enacted or substantively enacted at the
balance sheet date. Deferred tax assets are recognized only to the
extent that there is reasonable certainty that sufficient further
taxable income will be available against which such deferred tax assets
can be realized. If the company has carry forward of unabsorbed
depreciation and tax losses, deferred tax assets are recognized only if
there is virtual certainty that such deferred tax assets can be
realized against further taxable profits. Unrecognized deferred tax
assets of earlier years are reassessed and recognized to the extent
that it has become reasonably certain that further taxable income will
be available against which such deferred tax assets can be realized.
15. Segment Reporting Policy
(a) Segment accounting policies are in line with the accounting
policies of the company. In addition, the following specific accounting
policies have been followed for segment reporting.
(1) Segment revenue includes sales and other income directly
identifiable with/allocable to the segment including inter segment
sales.
(2) Expenses that are directly identifiable with/allocable to segment
are considered for determining the segment result. Expenses which
relate to the company as a whole and not allocable to segment are
included under Unallowable corporate expenditure.
(3) Income which relates to the company as a whole and not allocable to
segments is included in Unallowable corporate income.
(4) Segment assets and liabilities include those directly identifiable
with the respective segments. Unallowable corporate assets and
liabilities represent the assets and liabilities that relate to company
as a whole and not allocable to any segment. Unallowable assets mainly
comprises corporate head office assets, Land , Land & Site Development
and Tax Deposited with Income Tax authorities. Unallowable liabilities
includes mainly Unsecured Loans and Tax payable to Income Tax
authorities.
(b) Inter Segment transfer pricing
Segment revenue resulting from transactions with other business
segments is accounted on the basis of Transfer Price agreed between the
segments.
16 Intangible' Assets
An intangible asset is recognized if, and only if:
(a) it is probable that the future economic benefits that are
attributable to the asset will flow to the enterprise
(b) the cost of the asset can be measured reliably; An intangible asset
is measured initially at cost
The depreciable amount of an intangible asset will be allocated on a
systematic basis over the best estimate of its useful life.
The amortization method will be used to reflect the pattern in which
the asset's economic benefits are consumed by the enterprise. If that
pattern cannot be determined reliably, the straight line method will be
used.
17. Impairment of Assets
At each balance sheet date, the carrying amounts of fixed assets are
reviewed by the management to determine whether there is any indication
that those assets suffered an impairment loss. If any such indication
exists, the recoverable amount of the asset is estimated in order to
determine the extent of impairment loss (recoverable amount is the
higher of an assets net selling price or value in use). In assessing
the value in use, the estimated future cash flows expected from the
continuing use of the assets and from its disposal are discounted to
their present value using a pre discounted rate that reflects the
current market assessment of time value of money and risks specific to
the asset.
Reversal of impairment loss is recognized immediately as income in the
profit and Loss account
18. Provisions
A provision is recognized when an enterprise has
(1) A present obligation as a result of past events.
(2) It is probable that an outflow of resources will be required to
settle the obligation.
(3) In respect of which a reliable estimate can be made.
Provisions are determined based on the best estimates required to
fulfill the obligation on the balance sheet date. Provisions are
reviewed at each balance sheet date and adjusted to reflect the current
best estimates.
19. Cash & Cash equivalent
Cash and cash equivalent in the balance sheet comprises cash at bank,
cash in hand & Short term investment
Mar 31, 2010
The financial statements are prepared under the historical cost
convention and the significant accounting policies adopted are as
follows:
a) Loans and advances:
Provision is made for doubtful loans and advances. Bad debts are
written off as they arise.
b) Pre-operative expenses:
All expenses related to various projects by the company are treated as
pre-operative expenses till the commencement of commercial production.
c) Payables and accruals:
Liabilities are recognized for amounts to be paid for goods or services
received whether or not invoiced to the company.
d) Staff end of service gratuity:
Staff end of service gratuity is accounted on cash basis.
e) Foreign currency transactions:
Transactions in foreign currencies are converted into US Dollar at the
rate of exchange ruling on the date of the transaction.
Assets and liabilities expressed in foreign currencies are translated
into US Dollar at the rate of exchange ruling at the balance sheet
date.
Resulting exchange gains/losses are taken to the income statement.
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