(1) BASIS FOR PREPARATION OF FINANCIAL STATEMENTS
The financial statements have been prepared under the historical cost
convention in accordance with the applicable Accounting Standards and
the provisions of the Companies Act, 1956, as adopted consistently by
the Company. All income and expenditure having a material bearing on
the financial statements is recognized on accrual basis except
otherwise stated hereunder.
(2) GOING CONCERN DISCLOSURE
The accounts under consideration have been drawn up on going concern
(3) REVENUE RECOGNITION
Revenue from sale of goods/services is recognized when the
sale/services have been completed, with the passing of the title.
Return of goods if any are recognized in the year of return. Turnover
represents invoiced amount of goods sold and services including excise
duty but excluding sales tax.
(4) FIXED ASSETS AND DEPRECIATION
Fixed Assets are stated at cost less accumulated depreciation and
impairment losses if any.
Depreciation has been provided on straight-line method except for
furniture & fixture and vehicles where the same has been provided on
written down value method, in accordance with the rates prescribed in
Schedule XIV of the Companies Act, 1956 as amended up to date except
i) On material handling equipments, crates and bins where the rate of
Depreciation is 50% on SLM as the average life of such assets is not
more than 2 years.
ii) The rates of depreciation on some Office equipments is taken at 20%
on SLM after assessing the useful life of the asset, and
iii) It is opined that life span of existing Jig & Fixture does not
exceed one year, hence these are considered to be the part of Current
Assets from Current Financial Year.
Valuation of Inventories are made as under :-
i. Raw Material at cost
ii Work in progress is valued at factory cost.
iii. Scrap materials are valued at net realizable value.
iv All other inventories are valued at cost or net realizable value
whichever is lower.
v. The cost formulae used is weighted average cost formulae &
applicable excise has been added in the stock of Finished goods.
(6) FOREIGN CURRENCY TRANSACTIONS :
In respect of Export Sales in foreign currency, the sales are accounted
for at the exchange rate prevailing as on the date of transaction. The
receivables as on the Balance Sheet date are accounted for at the
closing rate. Any difference arising due to exchange rate fluctuation
is treated as revenue income /expense at the time the remittances are
received. The accounting is in line with the AS-11.
(7) EXCISE DUTY:
Excise duty is accounted for at the time of dispatches. Excise duty
realizable from customers is credited to Sales Account. Unutilized
amount of Excise Duty Deposit is shown under Loans & Advances.
The provision for excise duty on the finished goods as on 31.03.2011
has been included in the closing stock of finished goods and the same
amount of excise has been included in excise duty payable in current
(8) EMPLOYEES BENEFITS:
Company''s contributions paid/ payable during the year to Provident Fund
and Employees'' State Insurance Corporation (ESIC) are recognized in the
Profit & Loss Account, Provident Fund contributions are made to a Trust
administered by the company. The interest rate payable to the members
of this trust shall not be lower than the statutory rate of interest
declared by the Central Government under the Employees Provident Fund
and Miscellaneous Provisions Act, 1952 and shortfall, if any, shall be
made good by the company. The remaining contributions are made to a
Government Administered Employee Pension Fund towards which the company
has no further obligations beyond its monthly contributions.
Defined benefit contributions and other long term employee benefits are
provided on the basis of actuarial valuation made at the end of each
financial year. Actuarial gain or loss arising from such valuation are
charged to revenue in the year in which they arise.
(9) DEVELOPMENT EXPENDITURE
The development expenditure includes the amount spent on development of
prototype of samples in terms of the raw material consumed, consumption
of major tools, loose tools and the amount spent in terms of machine
hour rate multiplied by development time spent on individual machine.
(10) PROVISION FOR CURRENT AND DEFERRED TAX
(i) Provision for Current tax is made with reference to taxable income
computed for the accounting period for which the financial statements
are prepared by applying the tax rates relevant to the respective
Previous Year. Minimum Alternate Tax (MAT) eligible for set-off in
subsequent years (as per tax laws), is recognized as an asset by way of
credit to the Profit and Loss Account only if there is convincing
evidence of its realization. At each Balance Sheet date, the carrying
amount of MAT Credit Entitlement receivable is reviewed to reassure
(ii) Deferred Tax resuming from timing difference between book and
taxable profit for the year is accounted for using the current tax
rates. The deferred tax asset is recognized and carried forward only to
the extent that there is a reasonable certainty that the assets will be
adjusted in future. However, in case of deferred tax assets
(representing unabsorbed depreciation or carry forward losses) are
recognized, if and only if there is a virtual certainty that there
would be adequate future taxable income against which such deferred tax
assets can be realized.
(11) IMPAIRMENT OF ASSETS
The carrying amount of assets are reviewed at each Balance Sheet date,
if there is any indication of impairment based on internal/external
factors. An asset is impaired when the carrying amount of the assets
exceeds the recoverable amount. An impairment loss is charged to the
Profit and Loss Account in the year in which an asset is identified as
impaired. An impairment loss recognized in prior accounting periods is
reversed if there has been change in the estimate of the recoverable
(12) EARNINGS PER SHARE (EPS)
Basic earnings per share is calculated by dividing the net profit or
loss for the year attributable to equity shareholders (after deducting
preference dividends and attributable taxes) 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.