a) Presentation and disclosure of financial statements
During the year, the revised Schedule VI notified under the Companies
Act 1956, has become applicable to the company, for preparation and
presentation of its financial statements. The adoption of revised
Schedule VI does not impact recognition and measurement principles
followed for preparation of financial statements. However, it has
significant impact on presentation and disclosures made in the
financial statements. The company has also reclassified the previous
year figures in accordance with the requirements applicable in the
b) Use of estimates
The preparation of financial statements in conformity with Accounting
Standards requires the management to make judgments, estimates and
assumptions that affect the reported amounts, at the end of the
reporting period. Although these estimates are based on the
management''s best Knowledge of current events and actions, uncertainty
about these assumptions and estimates could result in the outcomes
requiring a material adjustment to the carrying amounts of assets or
liabilities in future periods.
c) Tangible fixed assets
Fixed Assets are stated at cost of acquisition or construction less
accumulated depreciation. Cost includes purchase price and all other
attributable cost of bringing the asset to working condition for
d) Depreciation: On Tangible fixed assets
- Depreciation is provided on the basis of Straight Line Method on
all depreciable fixed assets at the rate prescribed in schedule XIV of
the Companies Act, 1956 on pro rata basis.
- Depreciation on fixed assets taken over by the company due to merger
taken place in the financial year 2005-06 has been provided on Written
Down Value method in accordance with the provision of Section 205(2)(b)
of the Companies Act, 1956. The same method is followed in current year
- Depreciation in respect of fixed assets put to use in current year
has been charged on pro rata basis. Depreciation on assets sold,
discarded or demolished during the yea!- is being provided at their
respective rates on pro-rata up to the date on which such assets are
sold, discarded or demolished.
e) Borrowing costs
Borrowing costs that are attributable to the acquisition, construction
or production of a qualifying asset are capitalized as a part of the
cost of such asset. All others borrowing cost are charged to revenue.
f) Impairment of tangible and intangible assets
Impairment Loss, if any is provided to the extent, the carrying amount
of assets exceeds their recoverable amount. Recoverable amount is
higher of an assets net selling price and its value in use. Value in
use is the present value of estimated future cash flows expected to
arise from the continuing use of an asset or from its disposal at the
end of its useful life.
Current Investments are carried at lower of cost or fair value. Long
Term Investments are stated at cost. Provision for diminution in the
value of long term investments is made only if such a decline is other
h) Revenue recognition
- Revenue from sale of goods is recognized when all the significant
risks and rewards of ownership of the goods have been passed to the
- All other income and Expenditure are recognized and accounted for on
i) Retirement benefits:
- Company provides for Retirement Benefits in the form of Gratuity.
Company has taken Group Gratuity Policy of LIC of India and Premium
paid is recognized as expenses when it is incurred.
- Provident fund is accrued On monthly basis in accordance with the
terms of contract with the employees and is deposited with the
Statutory Provided Fund. The Company''s contribution is charged to
profit and loss account.
j) Income taxes
Tax expense comprises of current and deferred taxes. Current Income Tax
is measured at the amount '' expected to be paid to the tax authorities
in accordance with the Indian Income Tax Act, 1961. Deferred income
taxes reflects the impact of current year timing differences between
taxable income and accounting income for the year and reversal of
timing differences of earlier years. Provision for Current tax is made
after taking into consideration benefits admissible under the provision
of the Income Tax Act, 1961.
k) Segment reporting
The company is engaged mainly in one reportable segment viz.,
Manufacturing & Trading of Dyes and Chemical. During the Year,
Company is also engaged in trading of wellness product. However,
revenue from this business segment is not significant and accounts for
less than 10% of the total revenue and/or total assets of the Company.
Therefore, no disclosure of separate segment reporting is required in
terms of Accounting Standard AS-17 Segment Reporting.
I) Transaction in Foreign Currencies
Transactions in foreign currencies are recorded at the exchange rates
prevailing on the date of the transaction. Foreign currency monetary
assets and liabilities are translated at year-end using the closing
exchange rate. Exchange differences arising on settlement of
transactions and translation of monetary items are recognized as income
or expense in the year in which they arise as exchange rate difference.
m) Excise Duty
Excise Duty has been accounted based on payments made in respect of the
n) Miscellaneous Expenditure (to the extent not written off or
Share Issue expenditure is amortized over a period of five years in
which the same was incurred.
o) Contingent Liabilities & Contingent Assets:
A provision is recognized when the company has a present obligation as
a result of past event, it is probable that an outflow of resources
embodying economic benefits will be required to settle the obligation
and a reliable estimate can be made of the amount of the obligation.
Provisions are not discounted to their present value and are determined
based on the best estimate required to settle the obligation at the
reporting date. These estimates are reviewed at each reporting date and
adjusted to reflect the current best estimates. Contingent Liabilities
are not provided for and are disclosed by way of notes. Contingent
Assets are neither recognized nor disclosed in the financial