a Basis of preparation of Financial Statements
The accounts of the Company are prepared on going concern basis'' under
the historical cost convention'' as per applicable accounting standards
and generally accepted Accounting principles'' and the company adopts
the accrual basis in the preparation of the accounts'' unless otherwise
The accounting policies adopted in the preparation of financial
statements are consistent with those of previous year.
b Change in presentation and disclosure of financial statements
During the year ended 31 March 2012'' the revised Schedule VI notified
under the Companies Act 1956'' has become applicable to the Company'' for
preparation and presentation of its financial statements. The adoption
of revised Schedule VI does not impact recognition and measurement
principles followed for preparation of financial statements. However''
it has significant impact on presentation and disclosures made in the
financial statements. The Company has also reclassified the previous
year figures in accordance with the requirements applicable in the
c Use of estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent liabilities at the date of the
financial statements and the results of operations during the reporting
year end. Although these estimates are based upon management''s best
knowledge of current events and actions'' actual results could differ
from these estimates.
d Tangible fixed assets
i) Fixed Assets are stated at original cost of acquisition and includes
insurance'' freight'' Finance Charge and installation expenses.
ii) The costs of leasehold land shown in the balance sheet represent
the consideration paid to RIICO at the time of transfer in favour of
Depreciation on assets is provided on the straight line method at the
rates computed based on estimated useful life of the assets which are
equal to corresponding rates specified in Schedule XIV to the Companies
Act'' 1956. Lease hold land is not depreciable.
f Impairment of tangible and intangible assets
An asset is treated as impaired when the carrying cost of asset exceeds
its recoverable value'' an impairement loss is charged to the statement
of profit and loss in the year in which asset is identidied as
impaired. The impairement loss recognised in prior accounting period is
reversed if there has been change in the estimate of recoverable amount
g Valuation of Inventories
Inventories are valued as follows:
Inventories are valued at cost. Cost includes cost for manufactured
goods/process stock components of material'' custom duty'' shipping
freight'' inland freight'' transportation cost'' consumables and labour
charges etc. Closing stock has been calculated following FIFO method.
h Foreign currency transactions
Transactions in the foreign exchange are recorded at prevailing rate
on/or near to the date of transaction. All exchange gains and losses
are accounted for in the Profit and Loss Account.
i Revenue recognition
(i) Sale of goods
Revenue is recognized when the significant risks and rewards of
ownership of the goods have passed to the
buyer'' usually on delivery of the goods.
(ii) Income from Job Work
Revenue from Job Work Contracts is recognized on an accrual basis in
accordance with the terms of the relevant contracts.
j Segment Reporting Policies
The Company prepares its segment information in conformity with the
accounting policies adopted for preparing and presenting the financial
statements of the Company as a whole.
k Retirement and other employee benefits
Retirement benefits in the form of Provident Fund are defined
contribution schemes and the contributions are charged to the Profit
and Loss Account of the year when the contribution to the fund is due.
There are no other obligations other than the contribution payable to
1 Income tax
Tax expense comprises current and deferred tax. Current income tax is
measured at the amount expected to be paid to the tax authorities in
accordance with the Income Tax Act'' 1961. Deferred income taxes reflect
the impact of current year timing differences between taxable income
and accounting income for the year and reversal of timing differences
of earlier years.
m Earning Per share
Basic Earning Per Share is calculated by dividing the net profit or
loss for the year attributable to equity shareholders by the weighted
average number of equity shares outstanding during the year.
For the purpose of calculating Diluted Earning Per Share'' the net
profit or loss for the year attributable to equity shareholders and the
weighted average number of shares outstanding during the year are
adjusted for the effects of all dilutive potential equity shares.
n Provision'' Contingent liabilities and Contingent Assets
A contingent liability is a possible obligation that arises from past
events whose existence will be confirmed by the occurrence or
non-occurrence of one or more uncertain future events beyond the
control of the Company or a present obligation that is not recognized
because it is not probable that an outflow of resources will be
required to settle the obligation. A contingent liability also arises
in extremely rare cases where there is a liability that cannot be
recognized because it cannot be measured reliably. The Company does not
recognize a contingent liability but discloses its existence in the