Accounting Policies of Sibar Auto Parts Ltd. Company

Mar 31, 2018

NOTE: 32 First time adoption of Indian Accounting Standards (Ind AS) - Ind AS 101

All companies having that are being listed with stock exchange are required to adopt Ind AS. Accordingly, the company has adopted Ind AS, in accordance with Notification dated February 16, 2015 issued by Ministry of Corporate Affairs, Government of India, with effect from April 01, 2017 with transition date on April 01, 2016.

Transition from IGAAP to Ind AS:

These financial statements, for the year ended March 31, 2018, are the first financial statements prepared by the Company in accordance with Ind AS. For years upto and including the year ended March 31, 2017, the company prepared its financial statements in accordance with accounting standards notified under Section 133 of the Companies Act, 2013 read together with paragraph 7 of Companies (Accounts) Rules, 2014 and accounting standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) (herein after referred as IGAAP).

The company has prepared Ind AS compliant financial statements for the year ending March 31, 2018. Accordingly, the company has prepared opening Ind AS balance sheet as at April 01, 2016, the company’s date of transition to Ind AS in accordance with requirement of Ind AS 101, “First-time Adoption of Indian Accounting Standards”. The principal adjustments made by the company in restating its IGAAP financial statements, including the balance sheet as at April 01, 2016 and the balance sheet as at and the Statement of Profit & Loss for the year ended March 31, 2017, are explained in detail in the accompanying reconciliation statement and the basic approach adopted is summarized hereunder:

i) All assets and liabilities have been classified into financial assets/liabilities and non-financial assets/liabilities.

ii) In accordance with Ind AS 101, the resulting adjustments are considered as arising from events and transactions entered before the date of transition and recognized directly in the retained earnings at the date of transition to Ind AS.

iii) Ind AS 101 also allows first time adopter certain exemptions from the retrospective application of certain requirements under Ind AS. Accordingly, the company has availed the following exemptions/mandatory exceptions as per Ind AS 101:

a) Deemed Cost for Property, Plant & Equipment and Intangible assets (PPE): The Company has availed exemption under para D7AA of appendix D to Ind AS 101 which permits a first time adopter to continue with the carrying values as per IGAAP for its PPE as at the date of transition to Ind AS.

The Land has been revalued and has been considered as the fair value. The revalued amount of land is INR 5,28,99,339.

b) Classification & Fair value measurement of financial assets or financial liabilities at initial recognition:

The financial assets and financial liabilities have been classified on the basis of facts existing as at the date of transition to Ind AS.

i) The investments were treated unrealizable and thus the fair value of investments has been treated as Nil for the purpose of preparation of financial statements.

ii) The trade receivables amounting to INR 42,98,422 were treated unrealizable and thus the fair value of trade receivables has been treated as Nil for the purpose of preparation of financial statements.

iii) Other current assets amounting to INR 1,50,000 were treated unrealizable and thus the fair value of other current assets to that extent as Nil for the purpose of preparation of financial statements.

iv) Prior period expenses amounting to INR 3,99,381 were adjusted to the other current liabilities.

Deferred Tax: The Company recalculated the deferred tax using balance sheet method as defined under Ind-AS. Accordingly, the deferred tax asset is Nil as at March 31, 2017 and deferred tax asset Nil is as at April 01, 2016. Consequently, the retained earnings have been adjusted accordingly.

Retained Earnings:

Retained earnings as at April 1, 2016 and as at March 31, 2017 have been adjusted consequent to the above Ind-AS transition adjustments , details are given in annexure below.

Appendix to Note on transition from previous GAAP to IND-AS

Reconciliation between previous GAAP and IndAS

Note 34: Employee Benefits

a) Provident Fund: Company pays fixed contribution to provident fund at predetermined rates to the government authorities. The contribution of Rs.3,71,718 (Previous year Rs.3,36,840) including administrative charges is recognized as expense and is charged in the Statement of Profit and Loss. The obligation of the Company is to make such fixed contribution and to ensure a minimum rate of return as specified by GOI to the members. The overall interest earnings and cumulative surplus is more than the statutory interest payment requirement during the year.

b) Gratuity: Gratuity is a funded Defined Benefit Plan payable to the qualifying employees on separation. It is managed by a Life Assurance Scheme’ of the Life Insurance Corporation of India.

Company makes annual contribution to the Fund based on the present value of the Defined Benefit obligation and the related current service costs which are measured on actuarial valuation carried out as on Balance Sheet date. The liability has been assessed using Projected Unit Credit Method.

Reconciliation of opening and closing balances of the present value of the defined benefit obligation as at the year ended March 31, 2018 are as follows:

The estimates of future salary increase considered in actuarial valuation, have been factored in inflation, seniority, promotion and other relevant factors.

Note 35: Related Party Disclosures

List of Related Parties Parties with whom the company has entered into transactions during the year/where control exists

A .Key Management Personnel

i) Mr. P. Ravi Chandra

ii) Mr. P. Madhu Pratap

iii) Mr. P. Veeranarayana

iv) Mr. A.R. Chowdary

v) Mr. B.P. Jetty

vi) Ms. P. Sugunamma

B. Holding and Associate Companies

Fair Value Hierarchy Management considers that, the carrying amount of those financial assets and financial liabilities that are not subsequently measured at fair value in the Financial Statements approximate their transcend value. No financial instruments are recognized and measured at fair value for which fair values are determined using the judgments and smites. The fair value of Financial Instruments referred below has been classified into three categories depending on the inputs used in the value on technique. The hierarchy gives the highest priority to quoted prices in ace market for ideal assets or liabilities. (Level-1measurements) and lowest priority to unobservable (Level-

3 measurements).

The Company does not hold any equity investment and no financial instruments hence the disclosure are nil.

Financial Risk Management:

The Company’s advice expose to a variety of financial risks viz.,market risk, credit risk and liquidity risk. The Company’s focus is to foresee the unpredictability of financial markets and seek to minimize optional adverse effects on its financial performance. The primary market risk to the Company is credit risk and liquidity risk. The Company’s exposure to credit risk is influenced mainly by Government Orders

Management of Market Risk:

Market risks comprises of Price risk and Interest rate risk. The Company does not designate any fixed rate financial assets as fair value through Profit and Loss nor at fair value through OCI. Therefore, the Company is not exposed to any interstate risk. Similarly, the Company does not have any Financial Instrument which is exposed to change in price.

Foreign Currency Risks:

The Company is exposed to foreign exchange risk arising from various Currency exposures primarily with respect to the US Dollars (USD), for the imports being made by the Company.

The Company exposure to foreign currency risk as at the end of the reporting period March 31 2018 is INR Nil (March 31 2017 INR NIL & March 31 2016 INR NIL )

Credit Risk:

Credit risk is the risk of financial loss to the Company if a customer fails to meet its contractual obligations. The maximum exposure to the credit risk at the reporting date is primarily from trade receivables. The company operations are with parent companies and hence no issues credit worthiness. The company considers that, all the financial assets that are not impaired and past due as on each reporting dates under review are considered credit worthy

Credit risk exposure

An analysis of age-wise trade receivables at each repoint date is summarized as follows: :

Liquidity Risk:

The company‘s liquidity needs are monitored on the basis of monthly projectors. The principal sources of liquidity are cash and cash equivalents, cash generated from operons and availability of cash credit and overdraw faculties to meet the obligors as and when due.

Short term liquidity requirements consist mainly of sundry creditors, expenses payable and employee dues during the normal course of business. The company maintains sufficient balance in cash and cash equivalents and working capital faculties to meet the short term liquidity requirements.

The company assesses long term liquidity requirements on a periodical basis and manages them through internal accruals and commixed credit lines.

The following table shows the maturity analysis of the Companies Financial Liabilities based on contractually agreed, undiscounted cash flows as at the balance sheet date

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Mar 31, 2015

A. Basis of Accounting

The accounts of the company are prepared & maintained consistently on accrual basis and under the historic cost convention and in accordance with the generally accepted accounting principles in India and complies with the applicable Accounting Standards issued by the Institute of Chartered Accountants of India and relevant provisions of the Companies Act, 2013 except otherwise stated. All assets and liabilities have been classified ascurrent or non- current as per the Company''s normal operating cycle and other criteria setout in the Schedule III to the Companies Act,2013.

B. Fixed Assets :

Fixed Assets are stated at cost (cost includes acquisition cost, freight, installation cost, finance cost, duties and taxes and other incidental expenses incurred during the construction/ installation). Borrowing cost directly attributable to acquisition of those fixed assets which necessarily takes substantial period of time to get ready for their intended use are capitalized.

B 1 Change of Accounting Policy:

As reported during the financial year 2012-13, the Company converted all its agricultural lands into Stock-in-trade and sold a part of the same to utilize sale proceeds for meeting repayment obligations to Financial institutions/Banks. During the Financial Year 2014-15 the Company incurred site development charges and the same is treated as a part of cost to land. The income derived on sale of part of stock of land during the financial year 2014-15 is considered as business income since the land is held for sale as a business objective and the balance land is shown as Stock in trade as 31stMarch, 2015 .

This is a change in of Accounting Policy and hence the disclosure.

B 2 Extraordinary Item:

The company has obtained a surplus on the sale of part of its land which was disclosed in the Statement of Profit and Loss / Income Statement as Rs. 22,50,471 as an extraordinary item.

C. Inventories :

Inventories have been valued at lower of cost or net realizable value whichever is lower. The cost of purchases of inputs includes all charges in bringing the goods in point of sale, excise duty, custom duty less CENVAT availed. Work in progress and finished goods include appropriate proportion of overheads. The company has during the year, accounted for a portion of the land as a current asset and it implies that it is held for sale. The same was valued at cost or net realizable value whichever is lower.

D. Cash and Cash equivalents:

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

E Cash Flow Statement

Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

F. Depreciation :

Depreciation on fixed assets is provided based on the straight line method over useful lives of the assets estimated by the management as prescribed in Schedule II to the Companies Act, 2013. The value of assets whose estimated life is over at the commencement of the year are written off to opening retained earnings.

G. Revenue Recognition :

Revenue is recognized from the sale of goods, net of returns and trade discounts, as and when the goods are delivered and title to the ownership is transferred.

a. Other Income:

Interest Income, Rental Incomes and Profiton sale of Machinery are accounted on accrual basis.

H. Investments

Long-term investments are carried individually at cost less provision for diminution, other than temporary, in the value of such investments. Current investments are carried individually, at the lower of cost and fair value. Cost of investments includes acquisition charges such as brokerage, fees and duties.

I. Employee Benefits:

Employee benefits include provident fund, ESI, gratuity, medical benefits.

J. Gratuity:

The company has Defined Benefit Plan for post employment benefit in form of Gratuity for eligible employees, which is administered through a Group Gratuity Policy with Life Insurance Corporation of India (L.I.C). The liability for the above Defined Benefit Plan is provided on the basisof anactuarial valuation as carried out by L.I.C

K Leases

Lease arrangements where the risks and rewards incidental to ownership of an asset substantially vest with the lessor are recognized as operating leases. Lease rentals under operating leases are recognized in the Statement of Profit and Loss on a straight-line basis.

L. Earnings per share:

Basic earnings per share is computed by dividing the profit/ (loss) after tax (including the post-tax effect of extra ordinary items, if any) by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit / (loss) after tax (including the post-tax effect of extraordinary items, if any) as adjusted for dividend, interest and other charges to expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the beginning of the period, unless they have been issued at a later date. Dilutive potential equity shares are determined independently for each period presented.

M. Taxes on Income

Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961. Deferred tax is recognised on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantially enacted as at the reporting date. Deferred tax assets in respect of un absorbed depreciation and carry forward of losses are recognised only if there is virtual certainty that there will be sufficient future taxable income available to realize such assets. Deferred tax assets are recognised for timing differences of other items only to the extent that reasonable certainty exists that sufficient future taxable income willbe available against which these can be realized. Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable right for suchset off. Deferred tax assets are reviewed at each Balance Sheet date for their readability.

N. Impairment of Assets

The carrying values of assets / cash generating units at each Balance Sheet date are reviewed for impairment. If any indication of impairment exists, the recoverable amount of such assets is estimated and impairment is recognised, if the carrying amount of these assets exceeds their recoverable amount. There coverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discounting the future cashflows to their present value based on an appropriate discount factor.

O. Provisions and Contingencies

A provision is recognised when the Company has a present obligation as a result of past events and 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 their present value and are determined based on the 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 disclosed in the Notes.

P. Service Tax Input Credit

Service tax input credit is accounted forin the books in the period in which the underlying service received is accounted and when there is no uncertainty in availing/utilizing the credits.

Q. Segment Information:

The Company operates in a single line of manufacturing which is subject to similar risks and returns. Also the business of the company is with in a particular environment which is subject to similar risks and returns. Hence, there is no a business or geographical risks tobe reported by the company.

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Mar 31, 2014

A. Basis of Accounting

The accounts of the company are prepared & maintained consistently on accrual basis and under the historic cost convention and in accordance with the generally accepted accounting principles in India and complies with the applicable Accounting Standards issued by the Institute of Chartered Accountants of India and relevant provisions of the Companies Act, 1956, except otherwise stated.

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 the Schedule VI to the Companies Act, 1956.

B. Fixed Assets :

Fixed Assets are stated at cost (cost includes acquisition cost, freight, installation cost, finance cost, duties and taxes and other incidental expenses incurred during the construction/installation). Borrowing cost directly attributable to acquisition of those fixed assets which necessarily takes substantial period of time to get ready for their intended use are capitalized.

B 1 Change of Accounting Policy:

As reported during the financial year

2012- 13, the Company converted all its agricultural lands into Stock-in-trade and sold a part of the same to utilize sale proceeds for meeting repayment obligations to Financial institutions/Banks. During the Financial Year

2013- 14 the Company incurred site development charges and the same is treated as a part of cost to land.

The income derived on sale of part of stock of land during the financial year 2013-14 is considered as business income since the land is held for sale as a business objective and the balance land is shown as Stock in trade as 31st

March, 2014 . This is a change in of Accounting Policy and hence the disclosure.

B 2 Extraordinary Item:

The company has obtained a surplus on the sale of part of its land which was disclosed in the Statement of Profit and Loss / Income Statement as '' 62, 65,545 as an extraordinary item.

C. Inventories :

Inventories have been valued at lower of cost or net realizable value whichever is lower. The cost of purchases of inputs includes all charges in bringing the goods in point of sale, excise duty, custom duty less CENVAT availed. Work in progress and finished goods include appropriate proportion of overheads.

The company has during the year, accounted for a portion of the land as a current asset and it implies that it is held for sale. The same was valued at cost or net realizable value whichever is lower.

D. Cash and Cash equivalents:

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

E. Cash Flow Statement

Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

F. Depreciation :

Depreciation for the year calculated on straight line method basis at the rates prescribed in schedule-XIV to the Companies Act, 1956. Depreciation on assets purchased during the year is calculated on pro-rata basis from the date of purchase.

GL Revenue Recognition :

Revenue is recognized from the sale of goods, net of returns and trade discounts, as and when the goods are delivered and title to the ownership is transferred. Sales are exclusive of Excise duty and sales tax.

b. Other Income:

Interest Income, Rental Incomes and Profit on sale of Machinery are accounted on accrual basis.

H. Investments

Long-term investments are carried individually at cost less provision for diminution, other than temporary, in the value of such investments. Current investments are carried individually, at the lower of cost and fair value. Cost of investments includes acquisition charges such as brokerage, fees and duties.

I. Employee Benefits:

Employee benefits include provident fund, ESI, gratuity, medical benefits.

Gratuity:

Gratuity to employees is charged to profits in the year in when it is paid. No provision is made for liability of future payment of gratuity to retiring employees.

J. Leases

Lease arrangements where the risks and rewards incidental to ownership of an asset substantially vest with the lessor are recognised as operating leases. Lease rentals under

operating leases are recognised in the Statement of Profit and Loss on a straight-line basis.

K. Earnings per share:

Basic earnings per share is computed by dividing the profit/ (loss) after tax (including the post-tax effect of extraordinary items, if any) by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit / (loss) after tax (including the post-tax effect of extraordinary items, if any) as adjusted for dividend, interest and other charges to expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the beginning of the period, unless they have been issued at a later date. Dilutive potential equity shares are determined independently for each period presented.

L. Taxes on Income

Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961.

Deferred tax is recognised on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantially enacted as at the reporting date. Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognised only

if there is virtual certainty that there will be sufficient future taxable income available to realize such assets. Deferred tax assets are recognised for timing differences of other items only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realized. Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable right for such set off. Deferred tax assets are reviewed at each Balance Sheet date for their readability

M. Impairment of Assets

The carrying values of assets / cash generating units at each Balance Sheet date are reviewed for impairment. If any indication of impairment exists, the recoverable amount of such assets is estimated and impairment is recognised, if the carrying amount of these assets exceeds their recoverable amount. The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discounting the future cash flows to their present value based on an appropriate discount factor.

N. Provisions and Contingencies

A provision is recognised when the Company has a present obligation as a result of past events and 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 their present value and are determined based on the 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 disclosed in the Notes.

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Mar 31, 2013

A. Accounting Assumptions :

These accounts have been prepared under the historical cost convention and on the basis of a going concern, with revenues recognized and expenses accounted on their accrual including provisions/adjustments for committed obligations and amounts determined as payable or receivable during the year.

B. Fixed Assets :

Fixed Assets are accounted at cost unless stated otherwise. Cost of acquisition inclusive of inward freight, duties and taxes and incidentals related to acquisitions.

B 1 Change of Accounting Policy:

The company has been accounting for Land as a Fixed Asset. The item ''Land'' includes agricultural land of 12.45 acres in addition to the Factory Land and Buildings. During the year under report, the company has converted its excess agricultural land into non-agricultural use and sold a part of the same and utilized the fund for repayment of its debt obligations to financial institutions and others. The balance agricultural land also has accounted for that unsold portion of the converted land as a current asset, implying that the sale of land is a business income. This is a change of accounting policy and hence the disclosure.

The company''s land will consist of a fixed asset portion which continues in the financial statement as such and also a current account portion which is held as such for sale as a business objective.

B 2 Extraordinary Item:

The company has obtained a surplus on the sale of part of its land which was disclosed in the Statement of Profit and Loss / Income Statement as Rs 1,51,37,430 , as an extraordinary item.

C. Inventories :

Inventories have been valued at lower of cost or net realizable value whichever is lower. The cost of purchases of inputs includes all charges in bringing the goods in point of sale, excise duty, custom duty less CENVAT availed. Work in progress and finished goods include appropriate proportion of overheads.

The company has during the year, accounted for a portion of the land as a current asset and it implies that it is held for sale. The same was valued at cost or net realizable value whichever is lower.

D. Cash and Cash equivalents:

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

E Cash Flow Statement:

Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

F. Depreciation:

Depreciation for the year calculated on straight line method basis at the rates prescribed in schedule-XIV to the Companies Act, 1956. Depreciation on assets purchased during the year is calculated on pro-rata basis from the date of purchase.

G. a. Revenue Recognition :

Revenue is recognized from the sale of goods, net of returns and trade discounts, as and when the goods are delivered and title to the ownership is transferred. Sales are inclusive of Excise duty and sales tax.

b. Other Income:

Interest Income is accounted on accrual basis.

H. Investments:

Long-term investments are carried individually at cost less provision for diminution, other than temporary, in the value of such investments. Current investments are carried individually, at the lower of cost and fair value. Cost of investments includes acquisition charges such as brokerage, fees and duties.

I. Employee Benefits:

Employee benefits include provident fund, ESI, gratuity, medical benefits.

J. Leases

Lease arrangements where the risks and rewards incidental to ownership of an asset substantially vest with the lesser are recognised as operating leases. Lease rentals under operating leases are recognised in the Statement of Profit and Loss on a straight-line basis.

K. Earnings per share:

Basic earnings per share is computed by dividing the profit/(loss) after tax (including the post- tax effect of extraordinary items, if any) by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit / (loss) after tax (including the post-tax effect of extraordinary items, if any) as adjusted for dividend, interest and other charges to expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the beginning of the period, unless they have been issued at a later date. Dilutive potential equity shares are determined independently for each period presented.

L Taxes on Income

Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961.

Deferred tax is recognised on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantially enacted as at the reporting date. Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognised only if there is virtual certainty that there will be sufficient future taxable income available to realise such assets. Deferred tax assets are recognised for timing differences of other items only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realised. Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable right for such set off. Deferred tax assets are reviewed at each Balance Sheet date for their reliability.

M. Impairment of Assets

The carrying values of assets / cash generating units at each Balance Sheet date are reviewed for impairment. If any indication of impairment exists, the recoverable amount of such assets is estimated and impairment is recognised, if the carrying amount of these assets exceeds their recoverable amount. The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discounting the future cash flows to their present value based on an appropriate discount factor.

IN. Provisions and Contingencies

A provision is recognised when the Company has a present obligation as a result of past events and 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 their present value and are determined based on the 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 disclosed in the Notes.

0. Service Tax Input Credit

Service tax input credit is accounted for in the books in the period in which the underlying service received is accounted and when there is no uncertainty in availing / utilizing the credits.

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Mar 31, 2012

A. Accounting Assumptions :

These accounts have been prepared under the historical cost convention and on the basis of a going concern, with revenues recognized and expenses accounted on their accrual including provisions/adjustments for committed obligations and amounts determined as payable or receivable during the year.

B. Fixed Assets :

Fixed Assets are accounted at cost unless stated otherwise. Cost of acquisition inclusive of inward freight, duties and taxes and incidentals related to acquisitions.

Capital Work In Progress:

Assets which are not ready for their intended use (Capital work in progress) are carried at cost, comprising direct cost and related incidental expenses.

C. Inventories :

Inventories have been valued at lower of cost or net realizable value whichever is lower. The cost of purchases of inputs includes all charges in bringing the goods in point of sale, excise duty, custom duty less CENVAT availed. Work in progress and finished goods include appropriate proportion of overheads.

D. Cash and Cash equivalents:

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

E. Cash Flow Statement:

Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

F. Depreciation:

Depreciation for the year calculated on straight line method basis at the rates prescribed in schedule-XIV to the Companies Act, 1956. Depreciation on assets purchased during the year is calculated on pro-rata basis from the date of purchase.

G. a. Revenue Recognition :

Revenue is recognized from the sale of goods, net of returns and trade discounts, as and when the goods are delivered and title to the ownership is transferred. Sales are inclusive of Excise duty and sales tax.

b. Other Income:

Interest Income is accounted on accrual basis.

H. Investments:

Long-term investments are carried individually at cost less provision for diminution, other than temporary, in the value of such investments. Current investments are carried individually, at the lower of cost and fair value. Cost of investments includes acquisition charges such as brokerage, fees and duties.

I. Employee Benefits:

Employee benefits include provident fund, ESI, gratuity, medical benefits.

Gratuity:

Gratuity to employees is charged to profits in the year in when it is paid. No provision is made for liability of future payment of gratuity to retiring employees.

J. Leases

Lease arrangements where the risks and rewards incidental to ownership of an asset substantially vest with the lessor are recognised as operating leases. Lease rentals under operating leases are recognised in the Statement of Profit and Loss on a straight line basis.

K. Earnings per share:

Basic earnings per share is computed by dividing the profit/(loss) after tax (including the post-tax effect of extraordinary items, if any) by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit / (loss) after tax (including the post-tax effect of extraordinary items, if any) as adjusted for dividend, interest and other charges to expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity

shares would decrease the net profit per share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the beginning of the period, unless they have been issued at a later date. Dilutive potential equity shares are determined independently for each period presented.

L. Taxes on Income

Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961.

Deferred tax is recognised on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantially enacted as at the reporting date. Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognised only if there is virtual certainty that there will be sufficient future taxable income available to realise such assets. Deferred tax assets are recognised for timing differences of other items only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realised. Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable right for such set off. Deferred tax assets are reviewed at each Balance Sheet date for their realisability.

As there is no virtual certainty regarding the taxable income for the future years, no deferred tax assets has been provided on account of the carried forward losses. However, Deferred Tax Liability has been recognized on the timing difference arising in case of Depreciation. (Refer Note No.24)

M. Impairment of Assets

The carrying values of assets / cash generating units at each Balance Sheet date are reviewed for impairment. If any indication of impairment exists, the recoverable amount of such assets is estimated and impairment is recognised, if the carrying amount of these assets exceeds their recoverable amount. The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discounting the future cash flows to their present value based on an appropriate discount factor.

N. Provisions and Contingencies

A provision is recognised when the Company has a present obligation as a result of past events and 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 their present value and are determined based on the 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 disclosed in the Notes.

O. Service Tax Input Credit

Service tax input credit is accounted for in the books in the period in which the underlying service received is accounted and when there is no uncertainty in availing / utilizing the credits.

P. Miscellaneous expenditure

Development expenditure not adjusted appearing in miscellaneous expenditure represents expenditure incurred in connection with Research Development expenditure is written off during the year under review treating it as impairment losses as there is no future benefit arising from the above expenditure. (Refer Note No.22)

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Mar 31, 2011

1. Accounting Assumptions:

These accounts have been prepared under the historical cost convention and on the basis of a going concern, with revenues recognized and expenses accounted on their accrual including provisions/ adjustments for committed obligations and amounts determined as payable or receivable during the year.

2. Fixed Assets

Fixed Assets are accounted at cost unless stated otherwise. Cost of acquisition inclusive of inward freight, duties and taxes and incidentals related to acquisitions.

3. Inventories

Inventories have been valued at lower of cost or net realizable value whichever is lower. The cost of purchases of inputs includes excise duty, custom duty less CENVAT availed.

4. Depreciation :

Depreciation for the year calculated on straight line method basis at the rates prescribed in schedule-XIV to the Companies Act, 1956. Depreciation on assets purchased during the year is calculated on pro-rata basis from the date of purchase.

5. Revenue Recognition

Revenue is recognized from the sale of goods as and when the goods are delivered and title to the ownership is transferred. Sales are inclusive of Excise duty and sales tax.

6. Unclaimed dividend

Unclaimed dividend 1994-95, 1995-96 for Rs. 46,969 and Rs.1,53,754 respectively have been transferred to the Central Government a/c during the current Financial year.

7. Miscellaneous expenditure

Development expenditure not adjusted appearing in miscellaneous expenditure represents expenditure incurred in connection with Research Development expenditure on upgradation of existing technology.

8. CAPITAL COMMITMENTS:

The estimated amount of capital commitments on unexecuted order is Rs.NIL.

9. Sundry debtors and sundry creditors’ balances are subject to reconciliation and confirmation.

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Mar 31, 2010

1. Accounting Assumptions:

These accounts have been prepared under the historical cost convention and on the basis of a going concern, with revenues recognized and expenses accounted on their accrual including provisions/adjustments for committed obligations and amounts determined as payable or receivable during the year.

2. Fixed Assets

Fixed Assets are accounted at cost unless stated otherwise. Cost of acquisition inclusive of inward freight, duties and taxes and incidentals related to acquisitions.

3. Inventories

Inventories have been valued at lower of cost or net realizable value whichever is less. The cost of purchases of inputs includes excise duty, custom duty less CENVAT availed.

4. Depreciation :

Depreciation for the year calculated on straight line method basis at the rates prescribed in schedule-XIV to the Companies Act, 1956. Depreciation on assets purchased during the year is calculated on pro-rata basis from the date of purchase.

5. Revenue Recognition

Revenue is recognized from the sale of goods as and when the goods are delivered and title to the ownership is transferred. Sales is inclusive of Excise duty and sales tax.

6. Unclaimed dividend

Unclaimed dividend 1994-95,1995- 96 for Rs. 46,969 and Rs. 1,53,754 respectively are not transferred to Central Government a/ c. so far.

7. MISCELLANEOUS EXPENDITURE

Development expenditure not adjusted appearing in miscellaneous expenditure represents expenditure incurred in connection with Research Development expenditure on up gradation of existing technology.