1.1 Basis of preparation
These financial statements have been prepared in accordance with the
generally accepted accounting principles in India under the historical
cost convention on accrual basis and also to comply in all material
aspects with the accounting standards notified under Section 211 (3C)
[Companies (Accounting Standards) Rules, 2006, as amended] and the
other relevant provisions of the Companies Act, 1956. During the year
ended 31st March, 2012, the revised Schedule VI notified under the
Companies Act 1956, has become applicable to the Company for
preparation of its financial statements. Accordingly all assets and
liabilities have been classified as current and non-current as per the
Company''s normal operating cycle and other criteria set out in the
revised Schedule VI. Based on the nature of products and the time
between the acquisition of assets for processing and their realisation
in cash and cash equivalents, the Company has ascertained its operating
cycle as 12 months for the purpose of classification of current and
non-current assets and liabilities.
1.2 Fixed Assets
Tangible Assets are stated at cost net of accumulated depreciation and
accumulated impairment losses, if any. Cost comprises cost of
acquisition, construction and subsequent improvements thereto including
taxes and duties (net of credits and draw backs), freight and other
incidental expenses related to acquisition and installation.
1.3 Depreciation & Amortisation
Depreciation (including amortisation) is provided on Straight Line
Method at the rates specified in Schedule XIV to the Companies Act,
1.4 Borrowing Cost
Borrowing Cost attributable to the acquisition and construction of
qualifying assets, if any, are added to the cost up to the date when
such assets are ready for their intended use. Other borrowing costs are
recognised as expenses in the period in which these are incurred.
1.5 Impairment Loss
An impairment loss, if any, is recognised whenever the carrying amount
of the fixed assets exceeds the recoverable amount i.e. the higher of
the assets'' net selling price and value in use.
Inventories other than scrap are valued at lower of cost and estimated
net realisable value. Cost is determined on FIFO basis. Scrap is valued
at net realisable value.
1.7 Transaction in Foreign Currencies Initial Recognition
On initial recognition, all foreign currencies transactions are
recorded at exchange rates prevailing on the date of the transaction.
At the reporting date, foreign currency non-monetary items carried in
terms of historical cost are reported
using the exchange rate at the date of transaction.
All monetary assets and liabilities in foreign currency are restated at
the end of accounting period.
1.8 Revenue Recognition
Sale of Goods: Sales are recognised when the substantial risks and
rewards of ownership in the goods are transferred to the buyer as per
the terms of the contract and are recognised net of trade discounts,
rebates, sale taxes.
Sale of Services : Sales are recognized upon the rendering of services.
Other items are recognized on accrual basis.
1.9 Other Income
Interest: Interest income is generally recognized on a time proportion
basis taking into account the amount outstanding and the rate
applicable, when there is reasonable certainty as to realisation. All
other items are recognized on accrual basis.
1.10 Employees Benefits
The undiscounted amount of Short-term Employees Benefits expected to be
paid in exchange for the services rendered by employees is recognized
during the period when the employee renders the service. Contributions
under Defined Contribution Plans payable in keeping with the related
schemes are recognised as expenses for the year.
1.11 Government Grants
(a) Government grants of the nature of promoter'' contribution are
credited to Capital Reserve.
(b) Government grants related to specific fixed assets are deducted
from gross values of related assets in
arriving at their book values.
(c) Government grants related to revenue are recognised on a systematic
basis in the Statement of
Profit and Loss over the period necessary to match them with their
Current Tax in respect of taxable income is provided for the year based
on applicable tax rates and laws. Deferred tax is recognised subject
to the consideration of prudence in respect of deferred tax assets, on
timing differences, being the difference between taxable income and
accounting income that originate in one period and are capable of
reversal in one or more subsequent periods and is measured using tax
rates and laws that have been enacted or substantively enacted by the
Balance Sheet date. Deferred tax assets are reviewed at each Balance
Sheet date to re-assess realization.
1.13 Provision for Contingent Liabilities
The Company recognises a provision when there is a present obligation
as a result of a past event that probably requires an outflow of
resources and a reliable estimate can be made of the amount of the
obligation. A disclosure for a contingent liability is made when there
is a possible obligation or a present obligation that may, but probably
will not, require an outflow of resources or there is a present
obligation, reliable estimate of the amount of which cannot be made.
Where there is a possible obligation or a present obligation and the
likelihood of outflow of resources is remote, no provision or
disclosure for contingent liability is made.
1.14 Cash and Cash Equivalent
In the Cash Flow Statement, cash and cash equivalents include cash on
hand, demand deposits with banks, other short-term highly liquid
investments, if any, with original maturities of three months or less.
1.15 Earning Per Share
Basic earning per share is calculated by dividing the net profit or
loss for the period attributable to equity shareholders by the weighted
average number of equity shares outstanding during the period. For the
purpose of calculating diluted earnings per share, the net profit or
loss for the period attributable to equity shareholders and the
weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares.