(a) Basis of preparation of financial statements
 
 The financial statements of Gwalior Polypipes Limited have been
 prepared on a historical cost convention on the accrual basis and is in
 compliance with the mandatory accounting standards issued by the
 Institute of Chartered Accountants of India (ICAI) and other relevant
 provisions of the Companies Act, 1956 (the Act).
 
 The accounting policies applied by the Company sire consistent with
 those used in the previous period except where a newly issued
 accounting standard is initially adopted or a revision to an existing
 accounting standard requires a change in the accounting policy hitherto
 in use.
 
 (b) Use of estimates
 
 The preparation of financial statements is in conformity with Generally
 Accepted Accounting Principles which requires management to make
 estimates and assumptions that affect the reported amounts of assets
 and liabilities, the disclosure of contingent assets and liabilities at
 the date of the financial statements and the reported amounts of
 revenues and expenses during the period reported. Examples of such
 estimates are useful lives of fixed assets, percentage of completion on
 uncompleted contracts, income taxes, post-sales customer support and
 provisions for doubtful debts. Actual results could differ from those
 estimates. Difference between the actual result and estimates are
 recognized in the period in which the results are known /materialized.
 
 (c) Revenue recognition
 
 Sales comprises sale of goods and adjusted for excise duty and sale
 tax.
 
 (d) Fixed assets
 
 Fixed assets are stated at cost less accumulated depreciation. Cost
 includes all direct expenses incurred to bring an asset to working
 condition for its intended use. Cost also includes financing costs
 relating to specific borrowing(s) attributable to the acquisition or
 construction of fixed assets.
 
 (e) Depreciation
 
 Depreciation is provided using the written down value method based on
 the rates prescribed in Schedule XIV of the Companies Act, 1956, which
 approximates the useful lives of the assets as estimated by management.
 Depreciation is charged on a pro-rata basis for assets purchased / sold
 during the period. Individual assets costing Rs 5,000 or less are
 depreciated in full in the year of purchase.
 
 (f) Investments
 
 Long term
 
 Securities intended to be held for a period exceeding one year are
 classified as long-term investments and are carried at cost.
 Adjustments are made for any diminution in values that is, other than
 temporary.
 
 (g) Employee benefit plans
 
 Provident Fund
 
 Provident fund is a defined contribution plan. Eligible employees and
 the Company make equal periodic contributions as a percentage of the
 basic salary specified under the Employees'' Provident Fund and
 Miscellaneous Provisions Act, 1952. The Company has no further
 obligations under the plan beyond its periodic contributions.
 
 Gratuity
 
 Provision for gratuity to employees is made on the basis of estimated
 liability.
 
 (h) Income Taxes
 
 Tax expense comprises of current, deferred and fringe benefit tax.
 
 Current income tax and fringe benefit tax is provided for under the tax
 payable method, whereby all income taxes devolving upon the Company are
 provided for after considering all eligible allowances and rebates. Any
 claims by the Revenue Authorities against the Company are evaluated as
 regards the likelihood of their crystallizing into a liability.
 Accordingly, the claims are quantified to the extent accurately
 determinable and the provision recorded or disclosure made depending on
 the assessment of such likelihood.
 
 Deferred income taxes reflect the impact of timing differences (namely
 the differences that arise in one accounting period and reverse in
 another) between the taxable income and accounting income for die year,
 based on the tax effect of the aggregate amount being considered. The
 tax effect is calculated on the accumulated timing differences at the
 end of an accounting period based on prevailing enacted or
 substantially enacted regulations.
 
 Deferred tax assets are recognised only if there is reasonable
 certainty that they will be realized and are reviewed for the
 appropriateness of their respective carrying values at each balance
 sheet date.
 
 (i) Miscellaneous expenditure
 
 Major non-recurring expenditure is amortized over a period during which
 the benefit are expected toaccrue.
 
 (j) Prior year adjustments
 
 Significant items of income and expenditure, which relate to prior
 accounting years, are accounted in the Profit & Loss Account under the
 head Prior year adjustments other than those occasioned by events
 occurring during or after me close of the year and which are treated as
 relatable to the current year.
 
 (k) Earnings per Share
 
 Basic earnings per share are calculated by dividing the net profit or
 loss after tax 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 after tax for the period attributable to equity
 shareholders is divided by the weighted average number of shares
 outstanding including the weighted average number of equity shares that
 could have been issued on the conversion of all dilutive potential
 equity shares.