1. ACCOUNTING CONVENTIONS:
The-financial statements have been prepared to comply in all material
respects with the notified accounting standards by Companies Accounting
Standards Rules, 2006 and the relevant provisions ol the Companies Act,
1956. The financial statements have been prepared under the historical
cost convention on accrual basis. The accounting polices have been
consistently applied by the Company and are consistent with those used
in the previous year.
2. USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting presentation of financial statements requires
management to make estimates and assumption that affect the reported
amounts of assets and liabilities and discloser of contingent
liabilities at the date of the financial statements and the results of
operations during the reporting period. Although these estimates are
based upon management''s best knowledge of current events and action,
actual results could defer from these estimates.
3. FIXED ASSETS
i) Fixed assets are stated at cost less accumulated depreciation and
impairment losses, if any.
Cost comprises the purchase price and any attributable cost of bringing
the assets to its working conditions for its intended use.
ii) Insurance spares/ standby equipments are capitalized as part of
iii) Lease of leasehold land of the Company located at E-25A, M.I.A.,
Phase II, Basni, Jodhpur, acquired by the Company while taking over the
business of Partnership Firm M/s Shree Engineers in the year 1984, has
expired during the period under report. The land was given on lease to
the partnership firm by Mr. Shrigopal Saboo, Managing Director of the
Company. The Company is negotiating for further renewal of the lease.
4. RECOGNIZATION OF INCOME & EXPENDITURE:
a. Sales revenue is recognized when goods are cteared from factory and
is inclusive of excise duties.
b. Export sales are recognized at the time of shipment of products to
customer and are inclusive of incentives and exchange fluctuation of
c. Income, expenditure and incentives/ benefits are accounted for on
d. Claim & refunds due from government authorities and parties though
receivable/ refundable are not recognized in the accounts if the amount
there of is not ascertainable. These are accounted for as admitted
/parties in favor of the company.
Depreciation on fixed assets is provided on straight line method at the
rates and in the manner prescribed in schedule XIV to the Companies
The carrying amounts of assets are reviewed at each balance sheet if
there is any indication of impairment based or internal / external
factor. An impairment loss is recognized wherever the carrying amount
of an asset exceeds its recoverable amount The recoverable amount is
the greater of the asset''s net selling price and value in use. In
assessing value in use, the estimated future cash flows re discounted
to their present value at the weighted average cost of capital.
Inventories are valued at cost and net realizable value whichever is
lower. Inthe case of work in progress valuation is based on raw
material cost and overhead. Net realizable value is the estimated
current procurement price in the ordinary course of the business.
3. BORROWING COSTS:
Interest and other costs in connection with the borrowing of the funds
to the extent related / attributable to the acquisition / construction
of qualifying fixed assets are capitalized up to the date when such
assets are ready for its intended use and other borrowing costs are
charged to profit and Loss account
4. FOREIGN CURRENCYTRANSACTIONS:
Foreign currency transactions are accounted at exchange rates
prevailing on the date of the transaction. All foreigr currency assets
and liabilities if any at the Balance Sheet date are translated into
rupees at the applicable exchange rates prevailing at that date. All
exchange difference is dealt with in the profit and loss account except
those relating to acquisition of fixed assets which are adjusted in
thecost ofthefixed assets.
5. REVENUE RECOGNISATION OF INCOME AND EXPENDITURE:
All incomes are on accrual basis except in respect of claim receivable
6. RETIREMENT BENEFITS:
Company Contribution to Provident Fund and Superannuation fund are
charged to Profit & loss Account.
7. PROVISION FORBAD & DOUBTFUL DEBTS:
Provision is made in accounts for bad and doubtful debts/advances which
in the opinion of the management is considered irrecoverable.
8. EARNING PER SHARE:
Basic earning per share are calculated by dividing the net profit or
loss for the period attributable to equity shareholders by the weighed
average number of equity shares outstanding during the period. Since
there is loss duringthe year, accumulated losses and unabsorbed
depreciation for earlier years the earning per share is negative
9. MISCELLANEOUS EXPENDITURE:
The Miscellaneous Expenditure consisting of Preliminary Expenses,
Deferred Revenue Expenditure are amortized over a period of 10 years,
commencing from the year in which they are incurred/ commencement of
commercial operations by the company, as the case may be.