A. BASIS OF PREPARATION
The financial statements have been prepared to comply in all material
respects with the Accounting Standards notified by Companies
(Accounting Standards) Rules, 2006 and the relevant provisions of the
Companies Act, 1956. The financial statements have been prepared under
the historical cost convention on an accrual basis except as stated
otherwise. The accounting policies have been consistently applied by
the Company and are consistent with those used Ih the previous year.
B. 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
period. Although these estimates are based upon management''s best
knowledge of current events and actions, actual results could differ
from these estimates. Difference between the actual result and
estimates are recognised in the period in which the results are known /
C. PRESENTATION AND DISCLOSURE OF FINANCIAL STATEMENTS
During the year ended March 31, 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
D. FIXED ASSETS
i. Fixed Assets are stated at historical cost less depreciation. The
cost comprises directly attributable costs such as freight, insurance
and specific installation charges for bringing the assets to their
working condition for intended use.
ii. Intangible Assets are recognized on the basis of recognition
criteria as set out in Accounting Standard AS-26 Intangible
Depreciation is provided on the basis of Straight Line Method as per
the rates and in the manner prescribed in Schedule XIV of the Companies
i. Finished Goods are valued at cost or net realizable value whichever
ii. Raw materials are valued at lower of cost or net realizable value
iii. By products are valued at estimated realizable price.
iv. Stores and Spare parts are valued at/or under cost.
Cost for the purpose of inventory valuation is computed on FiFO (First
In First Out) basis.
G. REVENUE RECOGINTION
Revenue is recognized on mercantile basis except for claims/insurance
claims, which are accounted for on ascertainment basis in view of
uncertainty involved in determining the final amount.
Interest income on fixed deposit with bank is recognized on time
proportion basis taking into account the amount outstanding and the
Dividend income from investments is recognized when the Company''s right
to receive payment is established.
H. CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise cash at bank and in hand and short
term investments with an original maturity of three months or less.
State subsidies are accounted for on receipt basis.
J. RETIREMENT BENEFITS
Provision for Gratuity in the nature of defined benefit obligation is
considered on the basis of revised Accounting Standard (AS-15) on
actuarial valuation. The discount rate and other actuarial assumptions
are based on the parameters defined in the Accounting Standard.
ii. PROVIDENT FUND
Company''s contribution to the Provident Fund in the nature of Defined
Contribution Plan is being charged to Statement of Profit & Loss
Account in the year in which services are rendered by the employees.
iii. LEAVE ENCASHMENT
Short term benefits are provided for on accrual basis on the basis of
K. TAXES ON INCOME
Income tax expense is accounted for in accordance with AS-22,
Accounting for Taxes on Income, as stated below:
i. Provision for current tax is made based on taxable income for the
year computed in accordance with provisions of the Income Tax Act,
ii. Deferred tax is recognized, subject to the consideration of
prudence, on timing differences, being the difference between taxable
income and accounting income that originate in one period and are
capable of reversal In one or more subsequent periods.
iii. Deferred tax is measured based on the tax rates and the tax laws
enacted or substantively enacted at the balance sheet date. Deferred
tax assets and deferred tax liabilities are offset, if a legally
enforceable right exists to set off current tax assets against current
tax liabilities and the deferred tax assets and deferred tax
liabilities relate to the taxes on income levied by same governing
Deferred tax asset is recognized and carried forward to the extent that
there is a reasonable certainty of realization. In the case of
unabsorbed depreciation and carry forward tax losses deferred tax asset
is recognized, to the extent there is virtual certainty that sufficient
future taxable income will be available against which such deferred tax
assets can be realized.
L. IMPAIRMENT OF ASSETS
Impairment loss is recognized wherever the carrying amount of an asset
is in excess of its recoverable amount and the same is recognized as an
expense in the statement of profit and loss account and carrying amount
of the asset is reduced to its recoverable amount. Post impairment,
depreciation is provided on the revised carrying value of the asset
over its remaining useful life. Reversal of impairment losses
recognized in prior years is recorded when there is an indication that
the impairment losses recognized for the asset no longer exist or have
M. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
Provisions are recognized for liabilities that can be measured by using
a substantial degree of estimation, if
i. the Company has a present obligation as a result of a past event,
ii. a probable outflow of resources is expected to settle the
iii. the amount of the obligation can be reliably estimated.
Contingent Liability is disclosed in the case of
i. a present obligation arising from the past event, when it is not
probable that an outflow of resources will be required to settle the
ii. a possible obligation, unless the probability of outflow of
resources is remote.
Contingent Assets are neither recognized nor disclosed.
Provisions, Contingent liabilities and Contingent assets are reviewed
at each Balance Sheet date.
N. EARNINGS PER SHARE
Basic earnings per share are calculated by dividing the net profit or
loss 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 for the period attributable to equity shareholders and
the weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares.
O. SEGMENT POLICIES
The Company''s reporting segments are identified based on
activities/products, risk and reward structure, organization structure
and internal reporting systems.
Investments intended to be held for more than a year are classified as
long term investments. All other investments are classified as current
investments. Current investments are stated at lower of cost and
market/fair value. Long term investments are stated at cost Decline in
value of long term investments is recognized, if considered other than
R. BORROWING COSTS
Borrowing costs directly attributable to the acquisition, construction
or production of an asset that necessarily takes a substantial period
of time to get ready for its intended use or sale are capitalized as
part of the cost of the respective asset All other borrowing costs are
expensed in the period they occur. Borrowing costs consist of interest
and other costs that an entity incurs in connection with the borrowing