Mar 31, 2014
A. BASIS OF ACCOUNTING
The financial statements have been prepared under the historical cost
conventional accrual basis of accounting, in conformity with accounting
principles generally accepted in India and comply with the accounting
standard referred to in Sec.211 (3c) of the Companies Act, 1956. The
financial statements are presented in Indian rupees.
B. USE OF ESTIMATES
The preparation of financial statements are in conformity with Indian
GAAP requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of
contingent liabilities on the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates. Any revision to
accounting estimates is recognized prospectively in current and future
periods. Examples of such estimates include provisions for doubtful
debts, provision for income taxes and the useful lives of fixed assets.
C. FIXED ASSETS
i. Fixed Assets are stated at cost less depreciation. Cost comprises
the purchase price and any other applicable costs.
ii. Borrowing costs in respect of loans acquired for acquisition and
construction of fixed assets are capitalized upto the date the assets
are ready for use.
D. DEPRECIATION
The company provides depreciation on Fixed Assets on Written down Value
method on double shift basis at the rates and in the manner prescribed
in schedule XIV to the Companies Act 1956.
E. INVESTMENTS
Long term investments are carried at cost less provision, if any for
permanent diminution in value of such investments. Current investments
are carried at lower of cost and fair value.
F. INVENTORIES
Finished and semi-finished products produced and purchased by the
Company are carried at lower of cost and net realisable value.
Work-in-progress is carried at lower of cost and net realisable value.
The cost of inventories of Raw Material purchased by the Company is
carried at lower of cost and net realisable value.
Stores and spare parts are carried at cost. Necessary provision is made
and charged to revenue in case of identified obsolete and non-moving
items.
Cost of inventories is generally ascertained on the ''weighted average''
basis. Work-in-progress and finished and semi-finished products are
valued on full absorption cost basis.
G. TAXES ON INCOME
Current tax is determined as the amount of tax payable in respect of
taxable income for the years. Deferred tax is recognised, on timing
differences, being the difference between taxable incomes and
accounting income that originate in one period and are capable of
reversal in one or more subsequent periods. Where there is an
unabsorbed depreciation or carry forward loss, deferred tax assets are
recognised only if there is virtual certainty of realisation of such
assets, other deferred tax assets are recognised only to the extent
there is reasonable certainty of realisation in future.
Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which
gives rise to future economic benefits in the form of adjustment of
future income tax liability, is considered as an asset if there is
convincing evidence that the Company will pay normal tax after the tax
holiday period. Accordingly, it is recognized as an asset in the
balance sheet when it is probable that the future economic benefit
associated with it will flow to the Company and the asset can be
measured reliably.
H. REVENUE RECOGNITION
a. Sale of goods is recognised on transfer of property therein.
b. Insurance and other claims are recognised only on acceptance of
claims by the appropriate authorities.
1. RESEARCH AND DEVELOPMENT EXPENDITURE
Revenue expenditure is charged to the Profit and Loss A/C and capital
expenditure is added to the cost of Fixed Assets in the year in which
it is incurred and depreciation thereon is provided as per the rates
prescribed in Schedule XIV of the Companies Act, 1956.
J. CONTINGENT LIABILITIES
Contingent liabilities are generally not accounted for in the accounts
and are disclosed by Notes on Accounts. Provision made in the accounts
in respect of those contingencies which are likely to become a
liability after the year end but before finalisation of accounts and
which may have material effect on the position stated in the balance
sheet.
K. BORROWING COST
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalized as part of the cost
of such assets. A qualifying asset is one that necessarily takes a
substantial period of time to get ready for its intended use or sale.
All other borrowings costs are charged to revenue.
L. GOVERNMENT GRANTS
The grants are treated as Capital Reserve (and treated as a part of
Shareholders funds), which can be neither distributed as dividend nor
as deferred income.
M. EMPLOYEE BENEFITS
Short-term employee benefits (benefits which are payable within twelve
months after the end of the period in which the employees render
service) are measured at cost and are recognised as an expense at the
undiscounted amount in the profit and loss account in the profit and
loss account of the year in which the related service is rendered.
Contributions to Provident Fund, a defined contribution plan, are made
in accordance with the statute and are recognized as an expense when
employees have rendered service entitling them to the contributions.
Other long-term employee benefits (benefits which are payable after the
end of twelve months from the end of the year in which the employees
render service) are measured on a discounted basis by the Projected
Unit Credit Method on the basis of actuarial valuation.
Actuarial gains and losses are recognized immediately in the Profit and
Loss Account
N. IMPAIRMENT OF ASSETS
At each balance sheet date the company reviews whether there is any
indication of impairment of the carrying amount of the company''s fixed
assets. If any indication exists, an asset''s recoverable amount is
estimated. An impairment loss is recognized whenever the carrying
amount of an asset exceeds its recoverable amount. The recoverable
amount is the greater of the net selling price and value in use. In
assessing value in use, the estimated future cash flows are discounted
to their present value based on an appropriate discount factor
O. LEASE
Finance leases, which effectively transfer to the Company substantially
all the risks and benefits incidental to ownership of the leased item,
are capitalized at the lower of the fair value and present value of the
minimum lease payments at the inception of the lease term and disclosed
as leased assets. Lease payments are apportioned between the finance
charges and reduction of the lease liability based on the implicit rate
of return. Finance charges are charged directly against income. Lease
management fees, legal charges and other initial direct costs are
capitalized.
If there is no reasonable certainty that the Company will obtain the
ownership by the end of the lease term, capitalized leased assets are
depreciated over the shorter of the estimated useful life of the asset
or the lease term.
Leases where the lessor effectively retains substantially all the risks
and benefits of ownership of the leased item, are classified as
operating leases. Operating lease payments are recognized as an expense
in the Profit and Loss account on a straight-line basis over the lease
term.
P. FOREIGN CURRENCY TRANSACTIONS
Transactions in foreign currencies are recorded at the exchange rates
prevailing on the dates of transactions and in case of purchase of
materials and sale of goods, the exchange gains / losses on settlements
during the year, are charged to Profit and Loss Account.
Monetary assets and liabilities denominated in foreign currencies are
translated at the rates prevailing on the date of Balance Sheet.
Exchange gains / losses including those relating to fixed assets are
dealt with in the Profit and Loss Account.
Q. EARNINGS PER SHARE
The Company reports Basic and Diluted Earnings Per Share (EPS/DEPS) in
accordance with Accounting Standard 20 on "Earnings Per Share". Basic
EPS is computed by dividing the net profit or loss for the year
attributable to equity shareholders by the weighted average number of
equity shares outstanding during the year.
Diluted EPS is computed by dividing the net profit or loss for the year
attributable to equity shareholders by the weighted average number of
equity shares outstanding during the year as adjusted for the effects
of all dilutive potential equity shares, except where the results are
anti- dilutive.
R. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
The Company recognizes provisions when there is present obligation as a
result of past event and it is probable that there will be an outflow
of resources and reliable estimate can be made of the amount of the
obligation. A disclosure for Contingent liabilities is made in the
notes on accounts when there is a possible obligation or present
obligations that may, but probably will not, require an outflow of
resources. Contingent assets are neither recognised nor disclosed in
the financial statements.
S. TRADE RECIEVABLE & PAYABLES
Sales made on credit are included in trade receivables at the balance
sheet date & reduced by appropriate allowances for estimated doubtful
amounts. Trade payables are stated at their nominal value.
T. CASH AND CASH EQUIVALENTS
For the purpose of the cash flows, cash & cash equivalents comprise
cash on hand, balances with bank and deposits with banks.
Jun 30, 2013
A. BASIS OF ACCOUNTING:-
The Financial Statements have been prepared under the historical cost
conventional accrual basis of accounting, in conformity with accounting
principles generally accepted in India and comply with the Accounting
Standard referred to in Sec.211 (3c) of the Companies Act, 1956. The
financial statements are presented in Indian rupees.
B. USE OF ESTIMATES
The preparation of Financial Statements are in conformity with Indian
GAAP which requires management to make estimates and assumptions that
affect the reported amounts of Assets and Liabilities and disclosure of
contingent liabilities on the date of the Financial Statements and the
reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates. Any revision to
accounting estimates is recognized prospectively in current and future
periods. Examples of such estimates include provisions for doubtful
debts, provision for income taxes and the useful lives of Fixed Assets.
C. FIXED ASSETS:
(i) Fixed Assets are stated at cost less depreciation. Cost comprises
the purchase price and any other applicable costs.
(ii) Borrowing costs in respect of loans acquired for acquisition and
construction of Fixed Assets are capitalized upto the date the assets
are ready for use.
D. DEPRECIATION:
The Company provides depreciation on Fixed Assets on Written down Value
method on double shift basis at the rates and in the manner prescribed
in schedule XIV to the Companies Act 1956.
E. INVESTMENTS:-
Long term investments are carried at cost less provision, if any for
permanent diminution in value of such investments. Current investments
are carried at lower of cost and fair value.
F. INVENTORIES:-
Finished and semi-finished products produced and purchased by the
Company are carried at lower of cost and net realisable value.
Work-in-progress is carried at lower of cost and net realisable value.
The cost of inventories of Raw Material purchased by the Company is
carried at lower of cost and net realisable value.
Stores and spare parts are carried at cost. Necessary provision is made
and charged to revenue in case of identified obsolete and non-moving
items.
Cost of inventories is generally ascertained on the Weighted Average''
basis. Work-in- Progress and finished and semi-finished products are
valued on full absorption cost basis.
G. TAXES ON INCOME:-
Current Tax is determined as the amount of tax payable in respect of
taxable income for the years. Deferred tax is recognised, on timing
differences, being the difference between taxable incomes and
accounting income that originate in one period and are capable of
reversal in one or more subsequent periods. Where there is an
unabsorbed depreciation or carry forward loss, deferred tax assets are
recognised only if there is virtual certainty of realisation of such
assets, other deferred tax assets are recognised only to the extent
there is reasonable certainty of realisation in future.
Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which
gives rise to future economic benefits in the form of adjustment of
future income tax liability, is considered as an asset if there is
convincing evidence that the Company will pay normal tax after the tax
holiday period. Accordingly, it is recognized as an asset in the
Balance Sheet when it is probable that the future economic benefit
associated with it will flow to the Company and the asset can be
measured reliably.
H. REVENUE RECOGNITION:-
a. Sale of goods is recognised on transfer of property therein.
b. Insurance and other claims are recognised only on acceptance of
claims by the appropriate authorities.
I. RESEARCH AND DEVELOPMENT EXPENDITURE
Revenue expenditure is charged to the Profit and Loss A/C and capital
expenditure is added to the cost of Fixed Assets in the year in which
it is incurred and depreciation thereon is provided as per the rates
prescribed in Schedule XIV of the Companies Act, 1956.
J. CONTINGENT LIABILITIES
Contingent liabilities are generally not accounted for in the accounts
and are disclosed by Notes on Accounts. Provision made in the accounts
in respect of those contingencies which are likely to become a
liability after the year end but before finalisation of accounts and
which may have material effect on the position stated in the Balance
Sheet.
K. BORROWING COST
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalized as part of the cost
of such assets. A qualifying asset is one that necessarily takes a
substantial period of time to get ready for its intended use or sale.
All other borrowings costs are charged to revenue.
L. GOVERNMENT GRANTS
The grants are treated as Capital Reserve (and treated as a part of
Shareholders funds), which can be neither distributed as dividend nor
as deferred income.
M. EMPLOYEE BENEFITS
Short-term employee benefits (benefits which are payable within twelve
months after the end of the period in which the employees render
service) are measured at cost and are recognised as an expense at the
undiscounted amount in the Profit and Loss Account of the year in which
the related service is rendered.
Contributions to Provident Fund, a defined contribution plan, are made
in accordance with the statute and are recognized as an expense when
employees have rendered service entitling them to the contributions.
Other long-term employee benefits (benefits which are payable after the
end of twelve months from the end of the year in which the employees
render service) are measured on a discounted basis by the Projected
Unit Credit Method on the basis of actuarial valuation.
Actuarial gains and losses are recognized immediately in the Profit and
Loss Account
N. IMPAIRMENT OF ASSETS
At each Balance Sheet date the Company reviews whether there is any
indication of impairment of the carrying amount of the Company''s Fixed
Assets. If any indication exists, an asset''s recoverable amount is
estimated. An impairment loss is recognized whenever the carrying
amount of an asset exceeds its recoverable amount. The recoverable
amount is the greater of the net selling price and value in use. In
assessing value in use, the estimated future cash flows are discounted
to their present value based on an appropriate discount factor
O. LEASE
Finance leases, which effectively transfer to the Company substantially
all the risks and benefits incidental to ownership of the leased item,
are capitalized at the lower of the fair value and present value of the
minimum lease payments at the inception of the lease term and disclosed
as leased assets. Lease payments are apportioned between the finance
charges and reduction of the lease liability based on the implicit rate
of return. Finance charges are charged directly against income. Lease
management fees, legal charges and other initial direct costs are
capitalized.
If there is no reasonable certainty that the Company will obtain the
ownership by the end of the lease term, capitalized leased assets are
depreciated over the shorter of the estimated useful life of the asset
or the lease term.
Leases where the lessor effectively retains substantially all the risks
and benefits of ownership of the leased item, are classified as
operating leases. Operating lease payments are recognized as an expense
in the Profit and Loss Account on a straight-line basis over the lease
term.
P. FOREIGN CURRENCY TRANSACTIONS
Transactions in Foreign Currencies are recorded at the exchange rates
prevailing on the dates of transactions and in case of purchase of
materials and sale of goods, the exchange gains / losses on settlements
during the year, are charged to Profit and Loss Account.
Monetary assets and liabilities denominated in Foreign Currencies are
translated at the rates prevailing on the date of Balance Sheet.
Exchange gains / losses including those relating to Fixed Assets are
dealt with in the Profit and Loss Account.
Q. EARNINGS PER SHARE
The Company reports Basic and Diluted Earnings Per Share (EPS/DEPS) in
accordance with Accounting Standard 20 on "Earnings Per ShareÂ. Basic
EPS is computed by dividing the Net Profit or Loss for the year
attributable to equity shareholders by the weighted average number of
equity shares outstanding during the year.
Diluted EPS is computed by dividing the Net Profit or Loss for the year
attributable to equity shareholders by the weighted average number of
equity shares outstanding during the year as adjusted for the effects
of all dilutive potential equity shares, except where the results are
anti-dilutive.
R. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
The Company recognizes provisions when there is present obligation as a
result of past event and it is probable that there will be an outflow
of resources and reliable estimate can be made of the amount of the
obligation. A disclosure for Contingent liabilities is made in the
notes on accounts when there is a possible obligation or present
obligations that may, but probably will not, require an outflow of
resources. Contingent assets are neither recognised nor disclosed in
the Financial Statements.
S. TRADE RECIEVABLE & PAYABLES
Sales made on credit are included in trade receivables at the Balance
Sheet date & reduced by appropriate allowances for estimated doubtful
amounts. Trade payables are stated at their nominal value.
T CASH AND CASH EQUIVALENTS
For the purpose of the cash flows, cash & cash equivalents comprise
cash on hand, balances with bank and deposits with banks.
Jun 30, 2011
A. BASIS OF ACCOUNTING:-
The financial statements have been prepared under the historical cost
conventional accrual basis of accounting, in conformity with accounting
principles generally accepted in India and comply with the accounting
standard referred to in sec.211 (3c) of the companies act, 1956. The
financial statements are presented in Indian rupees.
B. USE OF ESTIMATES
The preparation of financial statements are in conformity with Indian
GAAP requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of
contingent liabilities on the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates. Any revision to
accounting estimates is recognized prospectively in current and future
periods. Examples of such estimates include provisions for doubtful
debts, provision for income taxes and the useful lives of fixed assets.
C. FIXED ASSETS:
(i) Fixed assets are stated at cost less depreciation. Cost comprises
the purchase price and any other applicable costs.
(ii) Borrowing costs in respect of loans acquired for acquisition and
construction of fixed assets are capitalized upto the date the assets
are ready for use.
D. DEPRECIATION:
The company provides depreciation on fixed assets on written down value
method on double shift basis at the rates and in the manner prescribed
in schedule XIV to the companies act 1956.
E. INVESTMENTS:-
Long term investments are carried at cost less provision, if any for
permanent diminution in value of such investments. Current investments
are carried at lower of cost and fair value.
F. INVENTORIES-
Finished and semi-finished products produced and purchased by the
Company are carried at lower of cost and net realisable value.
Work-in-progress is carried at lower of cost and net realisable value.
The cost of inventories of Raw Material purchased by the Company is
carried at lower of cost and net realisable value.
Stores and spare parts are carried at cost. Necessary provision is
made and charged to revenue in case of identified obsolete and
non-moving items.
Cost of inventories is generally ascertained on the 'weighted average'
basis. Work-in- progress and finished and semi-finished products are
valued on full absorption cost basis.
G. TAXES ON INCOME-
Current tax is determined as the amount of tax payable in respect of
taxable income for the years. Deferred tax is recognised, on timing
differences, being the difference between taxable incomes and
accounting income that originate in one period and are capable of
reversal in one or more subsequent periods. Where there is an
unabsorbed depreciation or carry forward loss, deferred tax assets are
recognised only if there is virtual certainty of realisation of such
assets, other deferred tax assets are recognised only to the extent
there is reasonable certainty of realisation in future.
Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which
gives rise to future economic benefits in the form of adjustment of
future income tax liability, is considered as an asset if there is
convincing evidence that the Company will pay normal tax after the tax
holiday period. Accordingly, it is recognized as an asset in the
balance sheet when it is probable that the future economic benefit
associated with it will flow to the Company and the asset can be
measured reliably.
H. REVENUE RECOGNITION:-
a. Sale of goods is recognised on transfer of property therein.
b. Insurance and other claims are recognised only on acceptance of
claims by the appropriate authorities.
I. RESEARCH AND DEVELOPMENT EXPENDITURE
Revenue expenditure is charged to the Profit and Loss A/C and capital
expenditure is added to the cost of Fixed Assets in the year in which
it is incurred and depreciation thereon is provided as per the rates
prescribed in Schedule XIV of the Companies Act, 1956.
J. CONTINGENT LIABILITIES
Contingent liabilities are generally not accounted for in the accounts
and are disclosed by Notes on Accounts. Provision made in the accounts
in respect of those contingencies which are likely to become a
liability after the year-end but before finalisation of accounts and
which may have material effect on the position stated in the balance
sheet.
K. BORROWING COST
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalized as part of the cost
of such assets. A qualifying asset is one that necessarily takes a
substantial period of time to get ready for its intended use or sale.
AH other borrowing costs are charged to revenue.
L. GOVERNMENT GRANTS
The grants are treated as Capital Reserve (and treated as a part of
Shareholders funds), which can be neither distributed as dividend nor
as deferred income.
M EMPLOYEE BENEFITS
Short-term employee benefits (benefits which are payable within twelve
months after the end of the period in which the employees render
service) are measured at cost and are recognised as an expense at the
undiscounted amount in the profit and loss account of the year in which
the related service is rendered.
Contributions to Provident Fund, a defined contribution plan, are made
in accordance with the statute and are recognized as an expense when
employees have rendered service entitling them to the contributions.
Other long-term employee benefits (benefits which are payable after the
end of twelve months from the end of the year in which the employees
render service) are measured on a discounted basis by the Projected
Unit Credit Method on the basis of actuarial valuation.
Actuarial gains and losses are recognized immediately in the Profit and
Loss Account
N. IMPAIRMENT OF ASSETS
At each balance sheet date the company reviews whether there is any
indication of impairment of the carrying amount of the company's fixed
assets. If any indication exists, an asset's recoverable amount is
estimated. An impairment loss is recognized whenever the carrying
amount of an asset exceeds its recoverable amount. The recoverable
amount is the greater of the net selling price and value in use. In
assessing value in use, the estimated future cash flows are discounted
to their present value based on an appropriate discount factor
O. LEASE
Finance leases, which effectively transfer to the Company substantially
all the risks and benefits incidental to ownership of the leased item,
are capitalized at the lower of the fair value and present value of the
minimum lease payments at the inception of the lease term and disclosed
as leased assets. Lease payments are apportioned between the finance
charges and reduction of the lease liability based on the implicit rate
of return. Finance charges are charged directly against income. Lease
management fees, legal charges and other initial direct costs are
capitalized.
If there is no reasonable certainty that the Company will obtain the
ownership by the end of the lease term, capitalized leased assets are
depreciated over the shorter of the estimated useful life of the asset
or the lease term.
Leases where the lessor effectively retains substantially all the risks
and benefits of ownership of the leased item are classified as
operating leases. Operating lease payments are recognized as an expense
in the Profit and Loss account on a straight-line basis over the lease
term.
p. EARNINGS PER SHARE
The Company reports Basic and Diluted Earnings Per Share (EPS/DEPS) in
accordance with Accounting Standard 20 on "Earnings Per Share". Basic
EPS is computed by dividing the net profit or loss for the year
attributable to equity shareholders bv the weighted average number of
equity shares outstanding during the year.
Diluted EPS is computed by dividing the net profit or loss for the year
attributable to equity shareholders by the weighted average number of
equity shares outstanding during the year as adjusted for the effects
of all dilutive potential equity shares, except where the results are
anti-dilutive.
q PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
The Company recognizes provisions when there is present obligation as a
result of past event and it is probable that there will be an outflow
of resources and reliable estimate can be made of the amount of the
obligation. A disclosure for Contingent liabilities is made in the
notes on accounts when there is a possible obligation or present
obligations that may, but probably will not, require an outflow of
resources. Contingent assets are neither recognized nor disclosed in
the financial statements.
Jun 30, 2010
A. BASIS OF ACCOUNTING :-
The financial statements are prepared under the historical cost
conventional accrual basis of accounting, in conformity with accounting
principles generally accepted in India and comply with the accounting
standard referred to in Sec.211 (3c) of the Companies Act, 1956.
B. FIXED ASSETS:
(i) Fixed Assets are stated at cost less depreciation. Cost comprises
the purchase price and any other applicable costs.
(ii) Borrowing costs in respect of loans acquired for acquisition and
construction of fixed assets are capitalised upto the date the assets
are ready for use.
C. DEPRECIATION:
The company provides depreciation on Fixed Assets on Written down Value
method on double shift basis at the rates and in the manner prescribed
in schedule XIV to the Companies Act 1956.
D. INVESTMENTS :-
Long term investments are carried at cost less provision, if any for
permanent diminution in value of such investments. Current investments
are carried at lower of cost and fair value.
E. INVENTORIES:-
Stock of raw material, stores, finished goods, spares are valued at
cost or net realizable value, whichever is less. Net realizable value
is calculated on the basis of average price of April, i.e., to the year
end. The cost of inventories of Raw Material is computed on average
cost basis. Finished good stocks are valued at the cost of raw material
consumed and direct cost related to production excluding depreciation.
F. TAXES ON INCOME :-
Current tax is determined as the amount of tax payable in respect of
taxable income for the years. Deferred tax is recognised, on timing
differences, being the difference between taxable income and accounting
income that originate in one period and are capable of reversal in one
or more subsequent periods. Where there is unabsorbed depreciation or
carry forward losses, deferred tax assets are recognised only if there
is virtual certainity of realisation of such assets, other deferred tax
assets are recognised only to the extent there is reasonable certainty
of realisation in future.
G. REVENUE RECOGNITION:-
a. Sale of goods is recognised on transfer of property therein.
b. Insurance and other claims are recognised only on acceptance of
claims by the appropriate authorities.
H. RESEARCH & DEVELOPMENT EXPENDITURE
Revenue expenditure is charged to the Profit and Loss A/C and capital
expenditure is added to the cost of Fixed Assets in the year in which
it is incurred and depreciation thereon is provided as per the rates
prescribed in Schedule XIV of the Companies Act, 1956.
I. CONTINGENT LIABILITIES
Contingent liabilities are generally not accounted for in the accounts
and are disclosed by Notes on Accounts. Provision made in the accounts
in respect of those contingencies which are likely to become a
liability after the year end but before finalisation of accounts and
which may have material effect on the position stated in the balance
sheet.
J. BORROWING COST
Borrowing costs that are attributable to the acquisition or
construction of qualifying or construction of qualifying assets are
capitalized as part of the cost of such assets. A qualifying asset is
one that necessarily takes a substantial period of time to get ready
for its intended use or sale. All other borrowings costs are charged to
revenue.
K. GOVERNMENT GRANTS
The grants are treated as Capital Reserve (and treated as a part of
Shareholders funds), which can be neither distributed as dividend nor
as deferred income.
L. RETIREMENT BENEFITS
Contributions to the Government Provident Fund and ESI are charged to
revenue. Since the company does not have any defined retirement benefit
scheme in this regard, accounting standard 15 issued by the Institute
of Chartered Accountants of India is not considered applicable.
M. IMPAIRMENT OF ASSETS
At each balance sheet date the company reviews whether there is any
indication of impairment of the carrying amount of the companys fixed
assets. If any indication exists, an assets recoverable amount is
estimated. An impairment loss is recognized whenever the carrying
amount of an asset exceeds its recoverable amount. The recoverable
amount is the greater of the net selling price and value in use. In
assessing value in use, the estimated future cash flows are discounted
to their present value based on an appropriate discount factor
N. LEASE
Finance leases, which effectively transfer to the Company substantially
all the risks and benefits incidental to ownership of the leased item,
are capitalized at the lower of the fair value and present value of the
minimum lease payments at the inception of the lease term and disclosed
as leased assets. Lease payments are apportioned between the finance
charges and reduction of the lease liability based on the implicit rate
of return. Finance charges are charged directly against income. Lease
management fees, legal charges and other initial direct costs are
capitalised.
If there is no reasonable certainty that the Company will obtain the
ownership by the end of the lease term, capitalized leased assets are
depreciated over the shorter of the estimated useful life of the asset
or the lease term.
Leases where the lessor effectively retains substantially all the risks
and benefits of ownership of the leased item, are classified as
operating leases. Operating lease payments are recognized as an
expense in the Profit and Loss account on a straight- line basis over
the lease term.