1.01 Basis of Preparation of Financial Statements
The financial statements are prepared under historical cost convention
, in accordance with the generally accepted accounting principles in
India and provisions of the Companies Act,1956 read with the Companies
(Accounting Standards),Rules 2006 (Accounting Standards Rule) as well
as applicable pronouncements of the Institute of Chartered Accountants
of India.(the ICAI). All assets and liabilities have been classified as
current or non-current as per the Company''s normal operating cycle and
other criteria set out in Revised Schedule VI to the Companies Act,
1956. Based on the nature of the services and their realisation in cash
& cash equivalents, the Company has ascertained its operating cycle as
twelve months for the purpose of current or non- current classification
of assets and liabilities.
1.02 Recognition of Income an Expenditure
Items of income and expenditure are generally recognised on accrual
basis except, certain items of income and expenditure in respect of
which the amounts remain unascertained till the receipt or payment such
as scrap sales, insurance claims, octroi refund, bank commission, bank
charges and sales tax assessement dues.
1.03 Fixed Assets
Fixed assets are stated at cost of acquisition or construction less,
accumulated depreciation /amortisation and impairment loss if any.
1.04 Intangible Assets
Intangible assets, namely software is amortised equally over the period
of 36 months from the date of put to use.
1.05 Depreciation and Amortisation
a) Depreciation is provided on the Straight Line Method and at the
rates and in the manner specified in Schedule XIV to the Companies Act,
b) No write off has been made in respect of lease premium paid for
leasehold land since the lease is granted for a long period.
a) Basis of valuation:
Raw Materials: : At Cost on FIFO Basis
Stores and Spare parts : At Cost on FIFO Basis Work-in-Progress : : At
Cost or net realisation
Value whichever is lower
Finished Goods : At Cost or net realisation
value whichever is lower
b) Cost of inventories comprises of all cost of purchase, cost of
conversion and other costs incurred in bringing them to their present
location and condition.
c) The finished goods are inclusive of excise duty
1.07 Sales & Services
Sales are inclusive of Excise duty and exclusive of Sales Tax. And Job
work Income are inclusive of Service Tax.
1.08 Excise Duty
Excise duty has been accounted on the basis of both payment made in
respect of goods cleared. And also provision made for lying in bonded
1.09 Foreign Currency Transactions
a) Transactions denominated in foreign currencies are normally recorded
at the exchange rate prevailing on the date of the transaction.
b) Monetary items denominated in foreign currencies at the year end are
restated at the year end rates. In case of monetary items which are
covered by forward exchange contracts, the difference between the year
end rate and rate on the date of the contract is recognised as exchange
difference and the premium paid on forward contracts is recognised over
the life of the contract.
c) Non-Monetary foreign currency items are carried at cost.
d) Any income or expense on account of exchange difference either on
settlement or on translation, is recognised in the profit and loss
1.10 Employee Retirement
a) Gratuity and Leave Encashment liability are provided on actuarial
b) Employer''s contribution to Provided Fund is charged to Profit & Loss
1.11 Borrowing Cost
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalised as part of the cost
of such assets. All other borrowing costs are charged to revenue.
1.12 Impairment of Assets
An asset is treated as impaired when the carrying cost of assets
exceeds its recoverable value. An impairment loss is charged to the
profit and loss account in the year in which an asset is identifined as
impaired. The impairment loss recognised in prior accounting periods is
reversed if there has been change in the estimate of the recoverable
1.13 Provision for Current Tax. Deferred Tax
a) Income tax expense comprises current tax i.e. amount of tax for the
period determined in accordance with the income tax law and deferred
tax charge or credit reflect the tax effects of timing difference
between accounting income and taxable income for the period. The
deferred tax charge or credit and the corresponding deferred tax
liabilities or assets are recognised using the tax rates that have been
enacted or sustantialy enacted by the balance sheet date. Deferred tax
assets are recognised only to the extent there is reasonable certainly
that the assets can be realised in future; However.where there is
unabsorbed depreciation or carried forward loss under taxation laws,
deferred tax assets are recognised only if there is virtual certainty
of realisation of such assets. Deferred tax assets are reviewed as at
each balance sheet date and written down or written up to reflect the
amount that is reasonably/ virtually certain(as the case may be) to be
1.14 Provision. Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement
are recognised when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent liabilities are not recognised but are disclosed in the
notes to accounts Contingent assets are neither recognised nor