1. Basis of Preparation of Financial Statement:-
The financial statements are prepared under the historical cost
convention on accrual basis in accordance with the generally accepted
accounting principles and provision of the Companies Act, 1956 as
adopted consistently by the Company.
2. Use of Estimates:-
The preparation of financial statement requires the management of the
Company to make estimates and assumptions to be made that affect the
reported amount of assets and liabilities and disclosures relating to
the contingent liabilities as at the date of the financial statement of
and reported amounts of income and expenses during the period. Examples
of such estimate includes provision for doubtful debts, future
obligation, employees retirement benefit plans, provision for income
taxes, useful lives of fixed assets and intangible assets.
Contingencies are recorded when it is probable that a liability will be
incurred and the amount can be reasonably estimated. Actual results may
differ from such estimates.
3. Fixed Assets:-
All fixed assets are valued at cost (including adjustment on
revaluation) less accumulated depreciation. Cost of acquisition is
inclusive of fright, duties and other incidental expenses incurred
during construction period and exclusive of cenvat credit availed
Depreciation on Fixed Assets is provided on WDV Method in accordance
with the rate specified in the Schedule XIV of the Companies Act, 1956
on pro-rata basis.
lnventories are valued at lower of cost or net realizable value.
6. Provision for Current and Deferred Taxi- Provision for current tax
made after taking into consideration benefits admissible under the
provisions of the Income-Tax Act, 1961. Deferred tax resulting from
timing difference between taxable and accounting income is accounted
for using the tax rates and laws that are enacted or substantively
enacted as on the balance sheet date. Deferred tax asset is recognized
and carried forward only to extent that there is virtual certainty that
the asset will be realized in future.
7. Revenue Recognition:-
ln appropriate circumstance, revenue is recognized when no significant
uncertainty as to determination or realisation exists.
8. Contingent Liability:-
These are disclosed by way of notes on the Balance Sheet date.
Provision is made wherever applicable for those contingencies which are
likely to materialise into liabilities after the year end till the
finalization of accounts and have material effect on the position
stated in Balance Sheet.
At each Balance Sheet date, the Company reviews the carrying amounts of
its 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 the higher of assets
net selling price and value in use. In assessing value in use, the
estimated future cash flow expected from the continuing use of the
assets and from its disposal is discounted to their present value using
a pre-tax discount rate that reflects the current market assessments of
time value of money and risks specific to the assets. Reversal of
impairment loss is recognized immediately as income in the Profit and
10. Earning Per Share:-
The earning considered in ascertaining EPS comprise the Net Profit
after Tax. The number of shares used in computing basic EPS is the
weighted average number of shares outstanding during the year.