(a) Basis of Preparation of Financial Statements:
The financial statements are prepared and presented under the
historical cost conventions, on accrual basis of accounting to comply
in all material respects, with the mandatory Accounting Standards as
notified by the Companies (Accounting Standards) Rules, 2006 as amended
(''the Rules'') and the relevant provisions of the Companies Act, 1956
(''the Act''). The accounting policies have been consistently applied by
the Company and the Accounting Policies not referred to otherwise are
in conformity with Indian Generally Accepted Accounting Principles
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
financial statements. Although these estimates are based upon
management''s best knowledge of current events and actions, actual
results could differ from these estimates. Difference between the
actual results and estimates are recognized in the year in which the
results are known / materialized. Wherever changes in presentation are
made, comparative figures of the previous year are regrouped
(b) Revenue Recognition:
i) Sales of Goods:
Revenue is recognized only when the significant risks and rewards in
respect of ownership of products are transferred by the company. Sales
are recorded net of returns, Central Sales Tax / Value Added Tax and
applicable trade discount and allowances.
ii) Sale of Service:
The Company recognizes revenue when the significant terms of the
arrangement are enforceable, services have been delivered and the
collectability is reasonably assured.
Interest income is recognized on time proportionate basis taking into
account the amount outstanding and rate applicable.
Dividend income is recognized when the Company''s right to receive
dividend is established. v) Others:
Other revenue is accounted for in the year in which the right to
receive the payment is established.
(c) Fixed Assets:
i) The fixed assets are stated at cost of acquisition including
incidental expenses related to acquisition of the concerned assets,
less accumulated depreciation.
ii) Fixed assets are eliminated from financial statements either on
disposal or when retired from active use.
i) Depreciation on fixed assets has been provided under Written Down
Value Method at the rates prescribed under Schedule XIV to the
Companies Act, 1956.
ii) Depreciation on additions to fixed assets has been charged from the
dates when they were first put to use.
i) Investments are classified as long term or current based on the
intention of the management at the time of purchase.
ii) Current Investment is valued at cost or fair value, whichever is
iii) Long Term Investments are carried at carrying cost less diminution
in value which is other then temporary, determined separately for each
iv) Unquoted Investments are valued at cost.
(f) Employee Benefits:
i) Provident Fund:
Employees receive benefits from a provident fund. The employee and
employer each make monthly contributions to the plan. A portion of the
contribution is made to the provident fund trust managed by the
Company, while the remainder of the contribution is made to the
Government''s provident fund.
In accordance with the Payment of Gratuity Act, 1972, the Company
provides for a lump sum payment to eligible employees, at retirement or
termination of employment based on the last drawn salary and years of
employment with the Company.
i) Raw Materials are valued at Cost or Net Realizable value which ever
is lower as per FIFO method followed.
ii) Manufactured finished goods are valued at lower of estimated cost
or net realizable value as per FIFO method followed.
iii) Traded goods are valued at lower of cost or net realizable value
as per FIFO method followed.
i) Purchases are recognized net of Value Added Tax.
(i) Taxes on Income:
i) Tax on income for the current period is determined on the basis of
estimated taxable income and tax credits computed in accordance with
the provisions of the Income Tax Act, 1961, and based on expected
outcome of assessment/ appeals.
ii) Deferred Tax is quantified using the tax rates and laws enacted or
substantively enacted as on the balance sheet date.
iii) Minimum Alternative Tax (MAT) credit is recognized as an asset
only when and to the extent there is convincing evidence that company
will pay income tax higher than that computed under MAT, during the
period that MAT is permitted to be set off under the Income Tax Act,
1961 (specified period). In the year, in which the MAT credit becomes
eligible to be recognized as an asset in accordance with the
recommendations contained in the guidance note issued by the Institute
of Chartered Accountants of India (ICAI), the said asset is created by
way of credit to the profit and loss account and shown as MAT Credit
Entitlement. The Company reviews the same at each balance sheet date
and writes down the carrying amount of MAT Credit Entitlement to the
extent there is no longer convincing evidence to the effect that the
company will pay income tax higher than MAT during the specified
(j) Provisions, Contingent Liabilities and Contingent Assets:
Provisions involving substantial degree of estimation in measurement
are recognized when there is present obligation as a result of past
event 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
financial statements except where virtual certainty is there.
(k) Event occurring garter the date of Balance Sheet:
Material events occurring after the date of the Balance Sheet are
considered upto the date of approval of accounts by the Board of
(l) 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.