1.1 Basis of Accounting:
The Financial Statements are prepared under historical cost convention
on an accrual basis, except as stated otherwise and are in accordance
with the requirements of the Companies Act, 1956.
1.2 Use of Estimates:
The preparation of financial statements, in conformity with the
generally accepted accounting principles, require estimate and
assumption to be made that affect the reported amount of assets and
liabilities as on the date of the financial statements and the reported
amount of revenues and expenses during the reporting period. Difference
between the actual results and estimates are recognized in the period
in which the results materialize.
1.3 Fixed Assets:
Fixed Assets are valued at cost of acquisition inclusive of Inward
Freight, Duties, Taxes and Incidental and trail run expenses. Exchange
Fluctuation on conversion of Outstanding Foreign currency Loans for
acquisition of Fixed Assets are adjusted to the Cost of Assets.
Depreciation on fixed assets is provided on Straight Line Method at the
rates specified from time to time in schedule XIV to the Companies Act,
The raw materials, stores and spares, packing material, consumables and
finished goods are valued at cost or net realizable value whichever is
Sales have been accounted net of Excise Duty and discount and purchases
have been accounted net of discounts.
1.7 Foreign Exchange:
Foreign currency transactions are recorded at the rates prevailing on
the date of the transactions. Monetary assets and liabilities in
foreign currency are translated at year end rate or at the rates of
exchange fixed under contractual arrangements. Exchange differences
arising on settlement of transactions and translation of monetary items
are recognized as income or expense.
Long term Investments are stated at cost. Provision, if any, is made
for permanent diminution in the value of Investments.
1.9 Retirement Benefits for Employees:
Company does not have any employees within the purview of PF /Gratuity.
1.10 Prior Period and Extraordinary items;
Income and Expenditure pertaining to prior period as well as
extraordinary items wherever material are disclosed separately.
1.11 State investment subsidy:
State investment subsidy is shown under Capital Reserve.
1.12 Earning per Share:
Basic earning per share is computed by dividing the net profit or loss
for the period attributable to equity shareholder by the weighted
average number of equity shares outstanding during the period. Diluted
earning per share is computed by taking into account the aggregate of
the weighted average number of equity shares outstanding during the
period and the weighted average number of equity shares which would be
issued on conversion of all the dilutive potential equity shares in to
1.13 Impairment of Assets:
At each balance sheet date, an assessment is made whether any
indication exists that an asset has been impaired. If any such
indication exist, an impairment loss i.e. the amount by which the
carrying amount of an asset exceeds its recoverable amount, is provided
in the books of accounts.
1.14 Segment Reporting:
Segments are identified having regard to the dominant source and nature
of risks and returns and the internal organization and management
structure. Revenues, Expenses and Assets and Liabilities, which relates
to the enterprise as a whole and are not attributable to segments, are
included under Un-allocable Corporate Expenses/Revenues and
1.15 Taxes on Income:
Income tax liability for the year is calculated in accordance with the
relevant tax laws and regulations applicable to the company.
Deferred Tax is recognized, Subject to the consideration of prudence,
on timing differences, being the difference between taxable incomes and
accounting income that originate in one period and are capable of
reversal in one or more subsequent periods. Deferred tax assets on
unabsorbed Depreciation and carry forward of losses are not recognized
unless there is virtual certainty that there will be sufficient future
taxable income available to realise such assets.