SIGNIFICANT ACCOUNTING POLICIES i) Basis of brparation of financial statements a) The financial statements are brpared under the historical cost convention and in accordance with generally accepted accounting principles in India, the applicable accounting standards and as per relevant provisions of the Companies Act, 2013. b) Income & expenditure are recognised and accounted for on accrual basis. ii) Use of Estimates The brparation of the financial statements requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognised in the period in which the results are known/ materialised. iii) Fixed Assets a) Fixed Assets are stated at cost less debrciation. b) Direct expenses as well as clearly identifiable indirect expenses, incurred on project during the period of construction are capitalised to the respective assets. c) CENVAT credit and other recoverable taxes on capital goods are accounted for by reducing the cost of capital goods. iv) Debrciation Debrciation on fixed assets is provided as follows: (a) Debrciation on fixed assets is provided on straight line method over the estimated useful life of the assets. (b) Effective from 1st April, 2014 the company debrciates its fixed assets over the useful life in the manner brscribed in schedule II of the Act, as against the earlier practice of debrciating at the rates brscribed in schedule XIV of the Companies Act, 1956. (c) No amount has been written off from leasehold land. The same will be charged to the Profit & Loss Account only in the year in which the respective lease period expires. v) Investments Long Term Investments are stated at cost. Provision for diminution in the value of Long term Investments is made only if such decline is other than temporary. vi) Inventories (a) Raw materials, Stores & spares and stock in process are valued at cost. (b) Finished Stock is valued at lower of cost or estimated net realisable value. (c) Waste is valued at estimated net realisable value. Cost of raw materials & stores is computed on weighted average basis. Finished goods and stock in process include cost of conversion and other costs incurred in bringing the inventories to their brsent location and condition. The net realizable value of leftover stock out of the products manufactured as per customers' specifications are estimated at nominal value. vii) Revenue Recognition a) Sale of goods is recognised on the basis of despatch. Sales is shown inclusive of excise duty. b) Claims of customers & others are accounted for as and when settled. viii) Excise Duty/Cenvat (a) Excise duty is accounted for on the basis of payments made in respect of goods cleared and provision made for goods lying in bonded warehouse. (b) The Cenvat credit in respect of excise duty is utilised for payment of excise duty on goods despatched. The unutilised Cenvat credit is carried forward in the books. ix) Borrowing cost Borrowing costs which are attributable to acquisition or construction of qualifying assets are capitalised as part of cost of such assets. A qualifying asset is one which necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue. x) Employee Benefits: (a) Short-term employee benefits are recognized as an expense at the undiscounted amount in the profit and loss account of the year in which the related service is rendered. (b) Post employment and other long term employee benefits are recognized as an expense in the profit and loss account for the year in which the employee has rendered services. The expense is recognised at the brsent value of the amount payable determined using actuarial valuation techniques. Actuarial gains and losses in respect of post employment and other long term benefits are charged to the profit and loss account. xi) Foreign Currency Transactions Transactions in foreign currency are recorded on the basis of exchange rates brvailing on the date of their occurrence. Foreign currency assets and liabilities are converted into rupee equivalent at the exchange rates brvailing on the Balance Sheet date and exchange difference arising there from is charged to the revenue. xii) Prior year adjustments Income and expenditure pertaining to prior period are accounted for under respective heads of accounts in profit and loss account. Effect of such amount is disclosed in notes. xiii) Research and Development Revenue expenditure on Research and Development is charged as expenses in the year in which they are incurred. Capital expenditure is included in Fixed Assets and debrciation is provided at the respective applicable rates. xiv) Liability for import duty, if any, on export obligation yet to be completed under EPCG Scheme is accounted for on expiry of obligation period / extension thereof. xv) Taxation Deferred income tax is provided on all temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. xvi) Impairment of Assets An asset is treated as impaired when the carrying cost of asset exceeds it recoverable value. An impairment loss is charged to statement of profit & loss in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting period is reversed if there has been a change in the estimates of recoverable amount. xvii) Provisions, Contingent Liabilities and Contingent Assets Provisions involving substantial degree of estimation in measurement are recognised when there is a brsent obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognised but are disclosed in the notes to the accounts. Contingent Assets are neither recognised nor disclosed in the financial statements. xviii) Accounting policies not specifically referred to otherwise, are consistent with generally accepted accounting principles. 1. Previous year's figures have been regrouped and rearranged wherever necessary, to make them comparable with those of current year. As per our report of even date attached For and on behalf of the Board For B.L. VERMA & CO. Chartered Accountants (FRN No. 001064C) (B.L. VERMA) Partner (Membership No. 10900) Place: Jaipur Date: 29th June, 2015 Sachin Ranka Chairman & Managing Director S.B.L. Jain Directors R. Raniwala Directors H.L. Sharma Directors S.D. Gupta Chief Financial Officer Gaurav Goyal Company Secretary Place: Mumbai Date: 29th June, 2015 |