Unless otherwise specified, all amounts are in Rupees lacs
a. Basis of accounting and preparation of financial statements
The financial statements have been prepared to comply in all material
respect with the applicable accounting principles in India, mandatory
accounting standards notified by the Companies (Accounting Standards)
Rules, 2006 and the relevant provisions of the Companies Act 1956. The
Company follows the accrual method of accounting under historical cost
convention modified by revaluation of certain fixed assets as and when
undertaken. The accounting policies have been consistently applied by
The preparation of financial statements requires the Management to make
estimates and assumptions that affects the reported amounts of assets
and liabilities including Contingent Liabilities as of the date of the
financial statements and the reported income and expenses for the
reporting period. Although these estimates are based upon historical
event and management''s best knowledge of current events and actions,
actual results could differ from those estimates. Material estimates
used in these financial statements that are susceptible to change as
more information becomes available include useful economic lives of
property, plant and equipment, impairment, retirement benefits,
guarantees, warranties and income taxes.
b. Revenue recognition
Revenue from sales of products is recognized upon the transfer of
significant risks and rewards of the ownership of the goods to the
customers, which generally coincides with their delivery to customers.
Sales are net of Value Added Tax/ Sales Tax and returns.
Revenue from Services is recognized on prorated basis over the period
Interest on deposits is recognized on a time proportion basis taking
into account the amount outstanding and the rate applicable.
Dividends from investment are recognized when the Company''s right to
receive payment is established.
c. Tangible Fixed assets
Tangible Fixed assets are stated at cost of acquisition/construction or
at revalued amount less depreciation and impairment losses. The cost of
asset comprises its purchase price and any other attributable cost
incurred for bringing the asset to its working condition for its
intended use. Where a tangible fixed asset has been revalued upwards,
the revalued amount is credited to owner''s interest under the head
Capital work in progress includes items under installation and items in
transit. In case of own manufactured items like tools, jigs,
proportionate burden of overhead as applicable is also treated as part
Expenditure incurred on replacement/ modification to fixed asset is
capitalized only when such expenditure results in increase in the
economic life of such asset.
d. Intangible assets
Software expected to provide future enduring economic benefits is
stated at cost less amortization.
All up gradation/enhancements are charged off as revenue expenditure
unless they bring significant additional benefits.
e. Depreciation / Amortization
Depreciation is provided at the rates specified in Schedule XIV of the
Companies Act, 1956 on straight line method on plant and machinery and
other tangible fixed assets excepting building where written down value
method is followed.
Assets whose actual cost does not exceed five thousand rupees are fully
depreciated in the year of acquisition.
Intangible assets are amortized over the best estimate of its useful
life ranging between a periods of 3 to 5 years.
f. Impairment of fixed assets
Consideration is given at each balance sheet date to determine 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 assets 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
g. Foreign currency transactions
Transactions denominated in foreign currency are recorded at the
exchange rates prevailing on the date of the transaction. Any income
or expense on account of exchange differences either on settlement or
on remeasurement of transactions is recognized in the Statement of
Profit and Loss account.
Monetary assets and liabilities denominated in foreign currency are
premeasured at the rate of exchange prevailing on the date of the
balance sheet and resultant gain or loss is recognized in the Statement
of Profit and Loss account. Non-monetary items denominated in foreign
currency are carried at cost.
Long Term investments are stated at cost less diminution in value, if
any other than temporary.
Current investments comprising investments in mutual funds are stated
at lower of cost and fair value.
Raw materials, components, work in progress and stores and spares are
valued at lower of cost or net realizable value.
Finished goods and Stock in trade are valued at lower of cost or net
realizable value. Cost includes all expenses incurred in bringing the
goods to their present location and condition.
Cost is ascertained on weighted average method.
j. Employee Benefits
i) Short term employee benefits are recognized as an expense at the
undiscounted amount in the Statement of Profit and Loss account of the
year in which the related service is rendered.
ii) Post employment benefits (Gratuity) and other long term employee
benefits (Leave encashment and accumulated sick leave) are recognized
as an expense in the Statement of Profit and Loss account for the year
in which the employee has rendered services. The expense is recognized
at the present value of the amounts payable determined using actuarial
valuation techniques. Actuarial gains and losses in respect of
post-employment and other long term benefits are charged to the
Statement of Profit and Loss account.
k. Taxes on Income
Tax expense comprises current and deferred tax. Current income tax is
measured at the amount expected to be paid to the tax authorities in
accordance with the Indian Income Tax Act. Deferred income taxes
reflect the impact of current year timing differences between taxable
income and accounting income for the year and reversal of timing
differences of earlier years.
Deferred tax is measured based on the tax rates and the tax laws
enacted or substantively enacted at the balance sheet date. Deferred
tax assets are recognized only to the extent that there is reasonable
certainty that sufficient future taxable income will be available
against which such deferred tax assets can be realized. In situations
where the Company has unabsorbed depreciation or carry forward tax
losses, all deferred tax assets are recognized only if there is virtual
certainty supported by convincing evidence that they can be realized
against future taxable profits.
At each balance sheet date the Company re-assesses unrecognized
deferred tax assets. It recognizes unrecognized deferred tax assets to
the extent that it has become reasonably certain or virtually certain,
as the case may be that sufficient future taxable income will be
available against which such deferred tax assets can be realized.
l. Provision, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent Liabilities are not recognized but are disclosed in the
notes. Contingent Assets are neither recognized nor disclosed in the
m. Government Grants
Grants received from the Government authorities with reference to
investments under investment subsidy schemes and no repayment are
ordinarily expected in respect thereof are treated as capital reserve.
The Company discloses Business segment as the Primary segment. Segments
have been identified taking into account the nature of products, the
different risks and returns, the organization structure and internal
reporting system. The Company''s operation predominantly relates to
manufacture of home appliances and fine blanking business. The Company
primarily caters to the domestic market and export sales are not
significant and accordingly there is no reportable secondary segment
o. Cash and cash equivalent
Cash and cash equivalents in the cash flow statement comprise cash on
hand, current account bank balances, bank deposit account balances
(with maturity of three months or less as at the balance sheet date)
and short term investments with maturity of three months or less as at
the balance sheet date.
p. Earnings Per Share
Basic Earnings per share are calculated 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. For the
purpose of calculating diluted earnings per share, the net profit or
loss for the year attributable to equity shareholders and weighted
average number of equity shares outstanding during the year are
adjusted for the effects of all dilutive potential equity shares
q. Disclosure requirement for Derivatives Instruments
The premium or discount arising at the inception of forward exchange
contracts entered into to hedge an existing asset/liability, is
amortized as expense or income over the life of the contract. Exchange
differences on such a contract are recognized in the Statement of
Profit and Loss in the reporting period in which the exchange rates
change. Any profit or loss arising on cancellation or renewal of such a
forward exchange contract is recognized as income or as expense for the