a. Basis of Accounting
The Financial statements of the company have been prepared under the
historical cost convention on an accrual basis, in accordance with
applicable Accounting Standards and relevant provisions of Companies
b. Use of Estimates
The presentation of financial statements requires estimates and
assumptions to be made that affect the reported amount of assets and
liabilities on the date of the financial statements and the reported
amount of revenues and expenses during the reporting period. Difference
between the actual results and estimates are recognized in the period
in which the results are known.
c. Fixed Assets
Fixed Assets (including Capital Work in Progress) are recorded at the
cost of acquisition or construction, net of tax credit wherever
eligible. Cost includes all expenses related to acquisition or
construction, including attributable borrowing cost on qualifying
d. Expenditure during Construction Period
In case of new projects and in case of substantial modernization /
expansion at existing units of the company, all pre-operative
expenditure specifically for the project, incurred up to the date of
completion, is capitalized and added pro-rata to the cost of fixed
i Depreciation on Fixed Assets is provided on Straight Line Method at
the rates and in the manner specified in Schedule XIV to the Companies
ii Depreciation on addition to the Fixed Asset or on sale/discardment
is calculated pro rata from the date of such addition or up to the date
of such sale/discardment, as the case may be;
iii Cost of Leasehold land is not amortised and is shown at cost.
iv The charge over and above the depreciation calculated on the
original cost of the revalued assets is transferred from Revaluation
Reserve to Depreciation Account (Profit & Loss Account)
f. Intangible Assets
Intangible Assets are stated at cost of acquisition less amortization.
Goodwill is amortised at ten percent on Straight Line Method.
i Investment are classified as investments in Subsidiaries (valued at
cost), Associates (valued at cost) within the meaning of Accounting
Standard 13 Accounting for Investments
ii Investments are recorded as Long Term Investments unless they are
expected to be sold within one year.
iii Investments are stated at cost in accordance with Accounting
Standard 13 on Accounting for Investments Provision for diminution is
made to recognize a decline, other than temporary, in the value of such
investments. & Accounting Standard 23 on Investment in Associates
i Inventories of Raw Material, Work in Progress, Finished Goods
(including Goods for Trade) are valued ''at cost or net realizable
value'' whichever is lower. Scrap is valued at net realizable value as
per the assessment of the Management. .
ii Major Consumables (Stores & Spares) like LDO, lead, dies etc are
valued at cost and other minor Consumables (Stores & Spares) are
written off in the year of purchase.
iii Cost comprises all cost of purchase, appropriate direct production
overheads and other costs incurred in bringing the inventories to their
present location and condition. For the purpose of valuation of closing
stock, FIFO method is being used as prescribed by Accounting Standard
i. Revenue Recognition
i Sale of goods is recognized on transfer of significant risks and
rewards of ownership which is generally on the dispatch of goods. Gross
sales are inclusive of excise duty, service tax, value added tax, but
are net of sales returns.
iii Income from Services is recognized when on completion of services
or part completion of the assignment as per Contract.
iii Revenue / Income and Cost / Expenses are generally accounted on
accrual as they are earned or accrued or incurred, except in case of
iv Dividend income is recognized when the right to receive the same is
j. Borrowing Costs
Borrowing costs attributable to the acquisition or construction of
qualifying assets, as defined in Accounting Standard 16 on Borrowing
Costs are capitalized as part of such assets up to the date when. the
asset is ready for its intended use. Other borrowing costs are expensed
k. Employees Benefit
Post Employment / Retirement Benefits - The liability for Gratuity
benefits, on the basis of amounts contributed to LIC''s Group Gratuity
Policy and the difference between the amounts paid on retirement and
recovered from LIC, is charged to Profit & Loss Account. Employer''s
Contribution to Provident Fund is debited to Profit & Loss Account.
I. Foreign Currency Transactions
i. Foreign currency transactions are recorded at the rates of exchange
prevailing on the date of the transactions.
ii. Monetary Foreign Currency assets and liabilities (monetary items)
are reported at the exchange rate prevailing on the balance sheet date.
iii. Exchange difference relating to long term monetary items, arising
during the year, in so far as they relate to the acquisition of
depreciable capital assets are added to / deducted from the cost of the
asset and depreciated over the balance life of the asset.
iv. All other exchange difference are dealt with in profit and loss
m. Provision for current tax and deferred tax
i Provision for income tax is made on the basis of estimated taxable
income. Advance Tax and Tax Deducted at Source (TDS) are shown in the
balance sheet under head Loans and advances during the year and in
subsequent years the Advance Tax & TDS are adjusted against Provision
for Tax. The net effect has shown under Provision for Tax.
ii The deferred tax assets and deferred tax liabilities is calculated
by applying tax rate and tax laws that have been enacted or
substantively enacted by the balance sheet date.
n. Earnings Per Share
The Company reports basic and diluted Earnings per share (EPS) 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.
o. Cash Flow Statement
The cash flow statement is prepared by the indirect method set out in
Accounting Standard 3 on Cash Flow Statement and presents the cash
flows by operating, investing and financing activities of the company.
Cash and Cash equivalents presented in the Cash Flow Statement consist
of cash on hand and cash at bank.
p. Issue Expenses
The expenses incurred for Initial Public Offer IPO is not written off
and same has been shown as IPO expenses under the head Miscellaneous
Expenses. The IPO Expenses will be written of after the completion of
the project, as per Accounting Standard 26 Intangible Assets