1.1 Basis of Accounting :
The Financial Statements have been prepared under the historical cost
convention, on accrual basis to comply in all material respects with
all applicable accounting principles in India, the applicable
Accounting Standards notified under Section 211(3C) of the Companies
Act, 1956 and the relevant provisions of the Companies Act, 1956.
All assets and liabilities have been classified as current or
non-current as per the Company''s normal operating cycle and other
criteria set out in the Revised Schedule VI to the Companies Act, 1956.
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 current - non current classification of
assets and liabilities
1.2 Use of Estimates:
The preparation of the financial statements are in conformity with the
generally accepted accounting principles that requires the management
to make estimates and assumptions that affect the reported amount of
assets, liabilities, revenues and expenses and disclosure of contingent
assets and liabilities. The estimates and assumptions used in the
accompanying financial statements are based upon management''s
evaluation of the relevant facts and circumstances as of the date of
the financial statements. Actual results may differ from the estimates
and assumptions used in preparing the accompanying financial
statements. Any differences of actual results to such estimates are
recognized in the period in which the results are known / materialized.
1.3 Fixed Assets :
The fixed assets are stated at acquisition cost less accumulated
1.4 Depreciation :
Depreciation on Fixed Assets has been provided in accordance with the
rates specified under Income Tax Rules, 1962 or under Schedule XIV of
the Companies Act, 1956 on straight line method.
In respect of Leased Assets, depreciation has been provided on straight
line basis over primary lease period.
1.5 Investments :
a) Investments, which are readily realizable and intended to the held
for not more than one year from the date on which such investments are
made, are classified as current investments. All other investments are
classified as long term investments.
b) Investments are classified as Quoted & Unquoted Investments.
c) Long term Investments are stated at cost less provision for
permanent diminution in value of such investments.
d) Current Investments are stated at lower of cost and fair market
value, determined by category of Investments.
1.6 Revenue Recognition :
a) All incomes and expenditure are accounted for on accrual basis
unless otherwise stated.
b) Dividend on shares and securities is recognized when the right to
receive the dividend is established.
c) The Company follows the Prudential norms for income recognition and
provides for / writes off Non-performing Assets as per the prudential
norms prescribed by the Reserve Bank of India or earlier as ascertained
by the management.
1.7 Earnings per Share (EPS) :
The earnings considered in ascertaining the Company''s EPS comprises
the net profit after tax (after providing the post tax effect of any
extra ordinary items). The number of shares used in computing Basic EPS
is the weighted average number of equity shares outstanding during the
1.8 Taxation :
a) Current Tax: A provision for current income tax is made on the
taxable income using the applicable tax rates and tax laws.
b) Deferred Tax: Deferred tax arising on account of timing differences
and which are capable of reversal in one or more subsequent periods is
recognised using the tax rates and tax laws that have been enacted or
substantively enacted. Deferred tax assets are not recognised unless
there is a virtual certainty with respect to the reversal of the same
1.9 Impairment of Assets :
Assets are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable.
An impairment loss is recognized for the amount by which the asset''s
carrying amount exceeds its recoverable amount. The recoverable amount
is higher of the asset''s fair value less costs to sell vis-a-vis
value in use. For the purpose of impairment, assets are grouped at the
lowest levels for which there are separately identifiable cash flows.
1.10 Provisions and Contingencies :
The company creates a provision when there is 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 obligation. A
disclosure for a contingent liability is made when there is a possible
obligation or a present obligation that probably will not require an
outflow of resources or where a reliable estimate of the obligation can
not be made.