Accounting Policies of Pasari Spinning Mills Ltd. Company

Mar 31, 2024

Note 1: General Information

The Company was incorporated on 25th November 1991, vide CIN'' L85110KA1991PLC012537, to carry on the business of Textile , Spinning, Weaving, Dying and Printing factories, conventional or modern using cotton, silk, wool, polyester fiber.

The Company has discontinued its production operations from the financial year 2010-11. I he Company has no intention to continue the production operations henceforth and has decided to lease out the Factory premises. The Company has not made any sales during the current year.

Note 2: Summary of Significant Accounting Policies

(i) Basis of preparation:

(a) Compliance with Ind AS

The financial statements comply in all material aspects with Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act. 2013 (the Act) (Companies (Indian Accounting Standards) Rules, 2015] and other relevant provisions of the Act.

The financial statements up to year ended March 31, 2024 which were prepared in accordance with the accounting standards notified under Companies (Accounting Standards) Rules, 2006 (as amended) and other relevant provisions of the Act

(b) Historical cost convention

The financial statement has been prepared on a historical cost basis, except for: certain financial assets and liabilities (including derivative instruments) that are measured at fair value

(c) The 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 III to the Companies Act, 2013 Based on the nature of products and the time between tho acguisition of assets for processing and their realisation in cash and cash eguivalonts, the Company has ascertained its operating cycle as 12 months for the purpose of current and non-current classification of assets and liabilities

(ii) Revenue recognition:

Revenue is measured at the fair value of the consideration received or receivable. The Company recognises revenue when the amount of revenue can be reliably measured, it is probable that the future economic benefits will flow to the entity and specific criteria have been met for each of the Company''s activities as mentioned below:

(a) Sale of products is recognised when the significant risks and rewards of ownership in the goods are transferred to the buyer which is based on the agreed terms. Revenue is based on price agreed with the customers. Amounts disclosed as revenue are net of returns, trade discounts, cash discounts, sales incentives, sales tax, etc

(b) Rental income arising from operating lease of investment properties is accounted on accrual basis based on contractual terms with the lessee and is disclosed under other operating revenue in statement of profit and loss

(iii) Investments and other financial assets:

(a) Classification

The Company classifies its financial assets under the following measurement categories: those to bo measured subseguently at fair value through other comprehensive income (FVOCI) or fair value through profit and loss (FVTPL), and those measured at amortised cost.

The classification depends on the entity''s business model for managing the financial assets and the contractual terms of the cash flows.

For assets measured at fair value, gains and losses will either be recorded in statement of profit and loss or other comprehensive income. For investments in debt instruments, this will depend on tho business model in which the investment is held For investments in equity instruments, this will depend on whether the Company has made an irrevocable election at the time of initial recognition to account for the equity instrument at fair value through other comprehensive income.

The Company reclassifies debt investments when and only when its business model for managing those assets changes

(b) Initial recognition and measurement

All financial assets are recognised initially at its fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are expensed in statement of profit and toss.

(c) Subsequent measurement

Financial assets that are held for collection of contractual cash flows, where those cash flows represent solely payments of principal and interest, are measured at amortised cost.

Financial assets that are held for collection of contractual cash flows and for selling the financial assets, where the asset''s cash flows represent solely payments of principal and interest, are measured at FVOCI. All equity investments are measured at fair value through other comprehensive income, except for investments in subsidiary/ associate which is measured at cost. Changes in the fair value of financial assets are recognised in statement of other comprehensive income. In those cases, there is no subsequent reclassification of fair value gains and losses to statement of profit and loss.

Financial assets that do not meet the criteria for amortised cost or FVOCI are measured at FVTPL. A gain or toss on such financial assets that are subsequently measured at FVTPL and is recognised and presented in the statement of profit and loss.

(d) Impairment of financial assets

Impairment losses (and reversal of impairment losses) on equity investments measured at FVOCI are not reported separately from other changes in fair value. The Company assesses the expected credit losses associated with its assets carried at amortised cost. The impairment methodology applied depends on whether there has been a significant increase in credit risk. The losses arising from impairment are recognised in the profit or loss.

For trade receivables only, the Company applies the simplified approach permitted by Ind AS 109 Financial Instruments, which requires expected lifetime tosses to be recognised from initial recognition of the receivables.

(e) Derecognition of financial assets

The Company derecognises a financial asset when the contractual right to the cash flows from the financial asset expire or it transfers substantially all risk and rewards of ownership of the financial asset. A gain or toss on such financial assets that are subsequently measured at amortised cost is recognised in statement of profit and loss when the asset is derecognised.

(f) Income recognition

Interest income

Interest income from financial assets measured at amortised cost is recognised using the effective interest rate method and are disclosed in statement of profit and loss.

Dividends

Dividends from equity instruments are recognised as other income in statement of profit and toss only when the right to receive payment is established.

[iv) Property, plant and equipment:

Freehold land is carried at historical cost and other items of property, plant and equipment including capital spares are stated at cost of acquisition or construction less accumulated depreciation when, it is probable that future economic benefits associated with the item will flow to the Company and it can be used for more than one year and the cost can be measured reliably.

Subsequent costs are included in the asset''s carrying amount or recognised as a separate asset, as appropriate, only when it meets the recognition criteria as mentioned above. The carrying amount of any component accounted for as a separate asset is derecognised when replaced. All other repairs and maintenance are charged to profit or toss during the reporting period in which they are incurred.

Gains and tosses on disposal are determined by comparing proceeds with carrying amount.

Depreciation on property, plant and equipments is provided using the straight line method. As required under Schedule II to the Companies Act 2013, the Company periodically assesses the estimated useful life of its tangible assets based on the technical evaluation considering anticipated technological changes and actual usage of the assets.

The estimated useful life is either equal to or tower than those prescribed under Part C of Schedule II to the Companies Act, 2013.

The estimated useful life for various property, plant and equipments is given below:

Assets Useful life (Yrs) Depreciation Rate

Buildings 30 3.17%

Furniture and Fixtures 10 9.50%

Vehicles 8 1188%

Office equipment 5 19.00%

Computer 3 31.67%

Low value assets not exceeding INR 5,000/- per unit are depreciated at 100%

(v) Investment properties:

Property that is held for rental income and that is not occupied by the Company, is classified as investment property. Investment properties are measured initially at cost, including related transaction cost. It is carried at cost less accumulated depreciation. Subsequent expenditure is capitalised to the asset’s carrying amount only when it is probable that future economic benefits associated with the expenditure will flow to the Company and the cost can be measured reliably. All other repairs and maintenance costs are expensed when incurred.

Land is carried at historical cost, however, buildings are depreciated using the straight line method over their estimated useful lives as mentioned in 2(iv) above.

(vi) Inventories:

Raw Materials, Consumable stores and spares are valued at lower of cost or market value after providing for obsolescence and depletion in value wherever applicable.

(vii) Retirement benefits:

(a) Contributions to PF/EPF are accounted on accrual basis.

(b) Gratuity and leave encashment are accounted on cash basis.

(viii) Foreign currency transactions:

Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction. Foreign currency monetary Assets and Liabilities are translated at year end exchange rates. The exchange difference arising on settlement of transactions and translation of monetary items are recognized as income or expense in the year in which they arise, except in case of the liabilities for the acquisition of fixed assets, where such exchange difference is adjusted in the carrying cost of fixed assets. This is not applicable to the Company.

(ix) Leases:

As a lessee

Leases in which the Company has substantial portion of the risks and rewards of ownership are classified as finance leases. Assets acquired under finance leases are capitalised at the lower of the fair value of the leased assets at the inception of the lease term and the present value of minimum lease payments. Lease payments are apportioned between the finance charge and the reduction of the outstanding liability. The finance charge is allocated to periods during the lease term at a constant periodic rate of interest on the remaining balance of the liability.

Cost of leasehold land (other than those which will be converted to freehold after a certain period upon satisfying prescribed conditions) is amortised over the lease term

Leases in which the Company doesn''t have substantial portion of the risks and rewards of ownership are classified as operating leases. Payment made under operating leases are charged to statement of profit and loss on a straight line basis.

As a lessor

Leases are classified as finance leases when substantially all of the risks and rewards of ownership transfer from the Company to the lessee. Amounts due from lessees under finance leases are recorded as receivables at the Company''s net investment in the leases. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return of the net investment outstanding in respect of the leases.

Lease income from operating leases, where the Company is a lessor, is recognised as income on a straight line basis. The respective leased assets are disclosed as investment properties.

(x) Taxes on income:

Tax on income for the current period is determined on the basis of taxable income and tax credits computed in accordance with the provisions of the Income Tax Act 1961.

Deferred tax expense or benefit is recognized 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. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax asset in respect of unabsorbed depreciation and carry forward of losses are recognized only to the extent that there is virtual certainty that sufficient taxable income will be available to realize these assets. All other deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available to realize these assets.

(xi) Impairment of assets:

At each balance sheet date, the Company assesses whether there is any indication that an asset may be impaired If any such indication exists, the Company estimates the recoverable amount. If the carrying amount of the asset exceeds its estimated recoverable amount, an impairment loss is recognised in the Statement of Profit and Loss to the extent the carrying amount exceeds recoverable amount. The recoverable amount is the higher of an asset''s fair value less costs of disposal and value in use. For the purpose of assessing impairment, assets are grouped at the lowest level of which that are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or group of assets (cash-generating units). Non-financial assets that suffered an impairment are reviewed for possible reversal of the impairment at the end of each reporting period.

(xii) Trade and other payables:

These amounts represent liabilities for goods and services provided to the Company prior to the end of financial year which are unpaid The amounts are unsecured and are usually paid as per payment terms. They are recognised initially at their fair value and subsequently measured at amortised cost.

(xiii) Borrowings:

Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost using effective interest method.

(xiv) Provisions and Contingent Liabilities:

Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events, for which it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate of the amount can be made.

Provisions are measured at the present value of management''s best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate to determine the present value is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognised as interest expense.

Contingent liabilities are disclosed when there is a possible obligation arising from past events, 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 company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made.

(xv) Cash and cash equivalents:

Cash and cash equivalents includes cash and cheques on hand, current accounts and fixed deposit accounts with banks with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

(xvi) Earning per share (basic and diluted):

Earning per share is calculated by dividing the profit attributable to owners of the company by the weighted average number of equity shares outstanding during the financial year.

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Mar 31, 2015

1. BASIS OF ACCOUNTING:

a) The financial statements are prepared under the historical cost convention in accordance with the generally accepted accounting principles in India, including the Accounting Standards specified (Except AS-15) under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. The Financial Statements are prepared as per Schedule III of The Companies Act 2013 in consensus with section 129 of the Act.

b) The accounts are maintained on accrual basis, except for certain employee benefits like Gratuity, leave encashment and income on investment which are accounted on actual basis.

2. USE OF ESTIMATES:

The preparation of Financial Statements, in conformity with the Generally Accepted Accounting Practices (GAAP) in India, required the management to make estimates and assumptions that affect the reported amounts of assets, liabilities as on the date of the financial statements. Actual result may differ from the estimates.

3. REVENUE RECOGNITION:

Sale of goods is recognized when the risk and reward of ownership are passed on to the customers. Sales are disclosed net of sales tax after deducting the applicable trade discount and rejections if any.

4. a) FIXED ASSETS:

Fixed assets are stated at cost of acquisition or construction including all the acquisition and installation related expenses. Individual assets costing less than Rs, 5000 are depreciated at the rate of 100%.

b) DEPRECIATION:

Depreciation is provided on straight line method, at the rates and manner prescribed under schedule II of the Companies Act, 2013.

5. INVENTORIES:

Raw Materials, Consumable stores and spares are valued at lower of cost or market value after providing for obsolescence and depletion in value wherever applicable.

6. RETIREMENT BENEFITS:

a) Contributions to PF/EPF are accounted on accrual basis.

b) Gratuity and leave encashment are accounted on cash basis.

7. FOREIGN CURRENCY TRANSACTION:

Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction. Foreign currency monetary assets and liabilities are translated at year end exchange rates. The exchange difference arising on settlement of transactions and translation of monetary items are recognized as income or expense in the year in which they arise, except in case of the liabilities for the acquisition of fixed assets, where such exchange difference is adjusted in the carrying cost of fixed assets. This is not applicable to the Company.

8. INVESTMENT:

Long term investments are stated at cost, less provisions for other than temporary diminution in value. Current investments comprising investments in mutual fund and shares are stated at the lower of cost or market value, determined on portfolio basis.

9 . TAXES ON INCOME:

Tax on income for the current period is determined on the basis of taxable income and tax credits computed in accordance with the provisions of the Income Tax Act 1961.

Deferred tax expense or benefit is recognized 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. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax asset in respect of unabsorbed depreciation and carry forward of losses are recognized only to the extent that there is virtual certainty that sufficient taxable income will be available to realize these assets. All other deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available to realize these assets.

10 . IMPAIRMENT OF ASSETS:

As at each Balance Sheet date, the Company reviews the carrying amount of its Fixed assets to determine whether there is any indication that those assets suffered an impairment loss. If any such indication exists, the recoverable amount of the assets is estimated in order to determine the extent of impairment loss. Recoverable amount is higher of an asset's net selling price and value in use. Reversal of impairment of loss is recognized immediately as income in the Profit & Loss account.

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Mar 31, 2014

1. BASIS OF ACCOUNTING:

a) The financial statements are prepared on the historical cost in accordance with the generally accepted accounting principles and presentation requirement as per schedule VI of the Companies Act, 1956 and the accounting standards referred to in Section 211 (3C) of the Companies Act, 1956 except for AS-15.

b) The accounts are maintained on accrual basis, except for certain employee benefits like Gratuity, leave encashment and income on investment which are accounted on actual basis.

2. USE OF ESTIMATES:

The preparation of Financial Statements, in conformity with the Generally Accepted Accounting Practices (GAAP) in India, required the management to make estimates and assumptions that affect the reported amounts of assets, liabilities as on the date of the financial statements. Actual result may differ from the estimates.

3. REVENUE RECOGNITION:

Generally revenue on sales is recognized on dispatch of goods from the factory. In respect of consignment sales, revenue is recognized at the time of receipt of confirmation of sale from the Consignee. The Company has not made any sales during the current year.

4. a) FIXED ASSETS:

Fixed assets are stated at cost of acquisition or construction including all the acquisition and installation related expenses. Individual assets costing less than '' 5000 are depreciated at the rate of 100%.

b) DEPRECIATION:

Depreciation is provided on straight line method, at the rates and manner prescribed under schedule XIV of the Companies Act, 1956.

5. INVENTORIES:

Raw Materials, Consumable stores and spares are valued at lower of cost or market value after providing for obsolescence and depletion in value wherever applicable.

6. RETIREMENT BENEFITS:

a) Contributions to PF/EPF are accounted on accrual basis.

b) Gratuity and leave encashment are accounted on cash basis.

7. FOREIGN CURRENCY TRANSACTION:

Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction. Foreign currency monetary assets and liabilities are translated at year end exchange rates. The exchange difference arising on settlement of transactions and translation of monetary items are recognized as income or expense in the year in which they arise, except in case of the liabilities for the acquisition of fixed assets, where such exchange difference is adjusted in the carrying cost of fixed assets. This is not applicable to the Company.

8. INVESTMENT:

Long term investments are stated at cost , less provisions for other than temporary diminution in value. Current investments comprising investments in mutual fund and shares are stated at the lower of cost and market value, determined on portfolio basis.

9. TAXES ON INCOME:

Tax on income for the current period is determined on the basis of taxable income and tax credits computed in accordance with the provisions of the Income Tax Act 1961.

Deferred tax expense or benefit is recognized 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. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax asset in respect of unabsorbed depreciation and carry forward of losses are recognized only to the extent that there is virtual certainty that sufficient taxable income will be available to realize these assets. All other deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available to realize these assets.

10. IMPAIRMENT OF ASSETS:

As at each Balance Sheet date, the Company reviews the carrying amount of its Fixed assets to determine whether there is any indication that those assets suffered an impairment loss. If any such indication exists, the recoverable amount of the assets is estimated in order to determine the extent of impairment loss. Recoverable amount is higher of an asset''s net selling price and value in use. Reversal of impairment of loss is recognized immediately as income in the Profit & Loss account.

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Mar 31, 2013

1. BASIS OF ACCOUNTING:

a) The financial statements are prepared on the historical cost in accordance with the generally accepted accounting principles and presentation requirement as per schedule VI of the Companies Act, 1956 and the accounting standards referred to in Section 211 (3C) of the Companies Act, 1956 except for AS-15.

b) The accounts are maintained on accrual basis, except for certain employee benefits like Gratuity, leave encashment and income on investment which are accounted on actual basis.

2. USE OF ESTIMATES:

The preparation of Financial Statements, in conformity with the Generally Accepted Accounting Practices (GAAP) in India, required the management to make estimates and assumptions that affect the reported amounts of assets, liabilities as on the date of the financial statements. Actual result may differ from the estimates.

3. REVENUE RECOGNITION:

Revenue on sales is recognized on dispatch of goods from the factory. In respect of consignment sales, revenue is recognized at the time of receipt of confirmation of sale from the Consignee.

4. a) FIXED ASSETS:

Fixed assets are stated at cost of acquisition or construction including all the acquisition and installation related expenses. Individual assets costing less than Rs. 5000 are depreciated at the rate of 100%.

b) DEPRECIATION:

Depreciation is provided on straight line method, at the rates and manner prescribed under schedule XIV of the Companies Act, 1956.

5. INVENTORIES:

Raw Materials, Consumable stores and spares are valued at lower of cost or market value after providing for obsolescence and depletion in value wherever applicable.

6. RETIREMENT BENEFITS:

a) Contributions to PF/EPF are accounted on accrual basis.

b) Gratuity and leave encashment are accounted on cash basis.

7. FOREIGN CURRENCY TRANSACTION:

Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction. Foreign currency monetary assets and liabilities are translated at year end exchange rates. The exchange difference arising on settlement of transactions and translation of monetary items are recognized as income or expense in the year in which they arise, except in case of the liabilities for the acquisition of fixed assets, where such exchange difference is adjusted in the carrying cost of fixed assets.

8. INVESTMENT:

Long term investments are stated at cost, less provisions for other than temporary diminution in value. Current investments comprising investments in mutual fund and shares are stated at the lower of cost and market value, determined on portfolio basis.

9. TAXES ON INCOME:

Tax on income for the current period is determined on the basis of taxable income and tax credits computed in accordance with the provisions of the Income Tax Act 1961.

Deferred Tax expense or benefit is recognized 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. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax asset in respect unabsorbed depreciation and carry forward of losses are recognized only to the extent that there is virtual certainty that sufficient taxable income will be available to realize these assets. All other deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available to realize these assets.

10. IMPAIRMENT OF ASSETS :

As at each Balance Sheet date, the company reviews the carrying amount of its fixed assets to determine whether there is any indication that those assets suffered an impairment loss. If any such indication exists, the recoverable amount of the assets is estimated in order to determine the extent of impairment loss. Recoverable amount is higher of an asset''s net selling price and value in use. Reversal of impairment of loss is recognized immediately as income in the profit and loss account.

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Mar 31, 2012

1. BASIS OF ACCOUNTING:

a) The financial statements are prepared on the historical cost in accordance with the generally accepted accounting principles and presentation requirement as per schedule VI of the Companies Act, 1956 and the accounting standards referred to in Section 211 (3C) of the Companies Act, 1956 except for AS-15.

b) The accounts are maintained on accrual basis, except for certain employee benefits like Gratuity, leave encashment and income on investment which are accounted on actual basis.

2. USE OF ESTIMATES:

The preparation of Financial Statements, in conformity with the Generally Accepted Accounting Practices (GAAP) in India, required the management to make estimates and assumptions that affect the reported amounts of assets, liabilities as on the date of the financial statements. Actual result may differ from the estimates.

3. REVENUE RECOGNITION:

Revenue on sales is recognized on dispatch of goods from the factory. In respect of consignment sales, revenue is recognized at the time of receipt of confirmation of sale from the Consignee.

4. a) FIXED ASSETS:

Fixed assets are stated at cost of acquisition or construction including all the acquisition and installation related expenses. Individual assets costing less than Rs. 5000 are depreciated at the rate of 100%.

b) DEPRECIATION:

Depreciation is provided on straight line method, at the rates and manner prescribed under schedule XIV of the Companies Act, 1956.

5. INVENTORIES:

Raw Materials, Consumable stores and spares are valued at lower of cost or market value after providing for obsolescence and depletion in value wherever applicable.

6. RETIREMENT BENEFITS:

a) Contribution to PF/EPF are accounted on accrual basis.

b) Gratuity and leave encashment are accounted on cash basis.

7. FOREIGN CURRENCY TRANSACTION:

Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction. Foreign currency monetary assets and liabilities are translated at year end exchange rates. The exchange difference arising on settlement of transactions and translation of monetary items are recognized as income or expense in the year in which they arise, except in case of the liabilities for the acquisition of fixed assets, where such exchange difference is adjusted in the carrying cost of fixed assets.

8. INVESTMENT:

Long term investments are stated at cost, less provisions for other than temporary diminution in value. Current investments comprising investments in mutual fund and shares are stated at the lower of cost and market value, determined on portfolio basis.

9. TAXES ON INCOME:

Tax on income for the current period is determined on the basis of taxable income and tax credits computed in accordance with the provisions of the Income Tax Act 1961.

Deferred Tax expense or benefit is recognized 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. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax asset in respect unabsorbed depreciation and carry forward of losses are recognized only to the extent that there is virtual certainty that sufficient taxable income will be available to realize these assets. All other deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available to realize these assets.

10. IMPAIRMENT OF ASSETS:

As at each Balance Sheet date, the company reviews the carrying amount of its fixed assets to determine whether there is any indication that those assets suffered an impairment loss. If any such indication exists, the recoverable amount of the assets is estimated in order to determine the extent of impairment loss. Recoverable amount is higher of an asset's net selling price and value in use. Reversal of impairment of loss is recognized immediately as income in the profit and loss account.

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Mar 31, 2010

1. BASIS OF ACCOUNTING:

a) The financial statements are prepared on the historical cost in accordance with the generally accepted accounting principles and presentation requirement as per schedule VI of the Companies Act, 1956 and the accounting standards referred to in Section 211 (3C) of the Companies Act, 1956 except for AS-15.

b) The accounts are maintained on accrual basis, except for certain employee benefits like Gratuity, leave encashment and income on investment which are accounted on actual basis.

2. USE OF ESTIMATES:

The preparation of Financial Statements, in conformity with the Generally Accepted Accounting Practices (GAAP) in India, required the management to make estimates and assumptions that affect the reported amounts of assets, liabilities as on the date of the financial statements. Actual result may differ from the estimates.

3. REVENUE RECOGNITION:

Revenue on sales is recognised on despatch of goods from the factory. In respect of consignment sales, revenue is recognised at the time of receipt of confirmation of sale from the Consignee.

4. A) FIXED ASSETS:

Fixed assets are stated at cost of acquisition or construction including all the acquisition and installation related expenses. Individual assets costing less than Rs. 5000 are depreciated at the rate of 100%.

B) DEPRECIATION:

Depreciation is provided on straight line method, at the rates and manner prescribed under schedule XIV of the Companies Act, 1956.

5. INVENTORIES:

Raw materials, Consumable stores and spares are valued at lower of cost or market value after providing for obsolescence and depletion in value wherever applicable. However, finished goods are valued at market value.

6. RETIREMENT BENEFITS:

a) Contribution to PF/EPF are accounted on accrual basis.

b) Gratuity and leave encashment are accounted on cash basis.

7. FOREIGN CURRENCYTRANSACTION:

Transactions in foreign currencies are recorded at the exchange rat&prevailing on the date of the transaction. Foreign currency monetary assets and liabilities are translated at year end exchange rates. The exchange difference arising on settlement of transactions and translation of monetary items are recognized as income or expense in the year in which they arise, except in case of the liabilities for the acquisition of fixed assets, where such exchange difference is adjusted in the carrying cost of fixed assets. :<

8. INVESTMENT:

I Long term investments are stated at cost, less provisions for other than temporary diminution in value. Current investments comprising investments in mutual fund and shares are stated at the tower of cost and market value, determined on portfolio basis.

9. TAXE5QN INCOME:

Tax on income for the current period is determined on the basis of taxable income and tax credits computed in accordance with the provisions of the Income Tax Act 1961. !

Deferred Tax expense or benefit is recognized 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. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax asset in respect unabsorbed depreciation and carry forward of losses are recognized only to the I extent that there is virtual certainty that sufficient taxable income will be available to realize these assets. All other deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available to realize these assets.

10. IMPAIRMENT OF ASSETS:

As at each Balance Sheet date, the company reviews the carrying amount of its fixed assets to determine whether there is any indication that those assets suffered an impairment loss. If any such indication exists, the recoverable amount of the assets is estimated in order to determine the extent of impairment loss. Recoverable amount is higher of an assets net selling price and value in use. Reversal of impairment of loss is recognized immediately as income in the profit and loss account.