a) Basis of Accounting :
The accounts have been prepared under the historical cost convention on
an accrual basis as a going concern and materially comply with the
mandator Accounting Standards issued by the Institute of Chartered
Accountants of India.
The preparation of financial statements in conformity with GAAP
requires that the management of the Company makes estimates and
assumptions that affect the reported amounts of income and expenses of
the period, the reported balances of assets and liabilities and the
disclosures relating to contingent liabilities as of the date of the
financial statements. Examples of such estimates include the useful
lives of fixed assets, provision for doubtful debts/advances etc.
Actual results could differ from these estimates.
b) Revenue recognition
Revenue recognized and expenses incurred are accounted on accrual basis
and in accordance with the requirements of the Companies Act, 1956.
Sales are recognized on dispatch of goods to Customers.
c) Fixed Assets:
Fixed assets are stated at cost less depreciation. Cost comprises of
purchase price (net of rebates and discounts), import duties, levies
(net of cenvat and vat) and any directly attributable cost of bringing
the assets to its working condition for its intended use.
Depreciation is provided on a pro-rata basis, from the date the assets
have been installed and put to use, on a Written down value method at
the rates and in the manner specified under Schedule XIV to the
Companies Act, 1956.
Investments are valued at cost and are long term in nature. Provision
for permanent Diminution in value is made wherever necessary.
f) Employees retirement benefits:
1. Defined Contribution Plans
The Company contributes on a defined contribution basis to Employees''
Provident Fund towards post employment benefits, which is administered
by the respective Government authorities, and has no further
obligations beyond making its contribution, which is expected in the
year to which it pertains.
2. Defined benefit plans
The Company has introduced defined benefit plan namely gratuity for all
its employees. The liability for the defined benefit plan of gratuity
is determined on the basis of an actuarial valuation by an independent
actuary at the year end. which is calculated using projected unit
Actuarial gains and losses are recognized immediately in the Profit and
3. Employee Leave Entitlement
Employee leave entitlement is provided in the books on cash basis
i) Inventories of Raw Materials are valued at cost.
ii) Stores &. Spares are valued at cost,
iii) Cost of finished goods includes an appropriate proportion of
overheads. Finished Goods has been valued at cost or market value
whichever is less.
h) Borrowing costs
Borrowing costs that are attributable to the acquisition, construction
or production of a qualified asset are capitalised. Other borrowing
costs arc expensed out.
i) Excise Duty
The Company is fully exempted from payment of excise duty on goods
manufactured by it vide Notification No: 6/2002 CH Dated 1st March,
2002 covered by General Exemption No: 52.
VHCL Industries Limited has been amalgamated with Jhaveri Weldflux
Limited in accordance with the Scheme of Amalgamation approved by the
Hon''ble High Court of Bombay in terms of the provisions of Section
391/392 of the Companies Act. 1956. The effective date of amalgamation
as per the Scheme is 01/04/2011. Accordingly, provision for DTA/DTL has
been made in the books of accounts as required under the Accounting
Standard (AS)-22 on Accounting for taxes on Income issued by the
Institute of Chartered Accountants of India (ICAI).
k) Foreign Currency Transactions
Foreign Currency transactions are converted at the rates prevailing on
the dates of transactions. Foreign Currency assets and liabilities are
converted at contracted/at the exchange rate prevailing at the balance
sheet date as applicable. Gain/(Loss) on closing rates of reporting
date of revenue transactions in the same year are charged to Exchange
Gain/(Loss) Account in the Profit and Loss Account.
l) Impairment of 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 an asset exceeds its recoverable
amount. The recoverable amount is greater of the net selling price and
value in use. In assessing the value in use, the estimated future cash
flows are discounted to their present value based on an appropriate
m) Provisions, 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
n) Leases : The Company has taken on sub-lease basis land measuring
706.63 Hectors situated at Village: Bhalu Kalla, Bastwa, Bastwa Mataji.
Sagatnagar, Belwa Ranaji, Ketu Kalla, Tehsil Shergarh. Dist. Jodhpur
from SuzlonGujrat Wind Park Limited for setting up 2.10 MW Wind Power
Plant for generation of Wind Power which is directly supplied to
Jodhpur Vidyut Vitran Nigam Limited under Power Purchase Agreement.
o) Adoption of Revised Schedule VI : The Financial Statements for the
current year have been prepared as per the Revised Schedule VI format
as notified by the Ministry of Corporate Affairs, Previous Year figure
have been regrouped or reclassified to confirm to the presentation and
classification of the corresponding figures of the current year.
Adoption of revised Schedule VI format has no material impact on the
measurement and recognition principles followed in preparation of the