1. Basis of Preparation of Financial Statements
a. The financial statements have been prepared under the historical
cost convention in accordance with the Generally Accepted Accounting
Principles (GAAP) and are in consonance with the mandatory accounting
standards and statements issued by the Institute of Chartered
Accountants of India and In view of the revision to the Schedule VI as
per a notification issued during the year by the Central Government,
the financial statements for the financial year ended 31st March, 2012
have been prepared as per the requirements of the Revised Schedule VI
to the Companies Act, 1956. Accounting policies not specifically
referred to otherwise are consistent with generally accepted accounting
b. The Company follows the mercantile systems of accounting and
recognizes income and expenditure on an accrual basis except stated
2. Revenue Recognition
a. Sales are recognized when goods are supplied and are recorded net
of sales return, rebates, trade discounts, VAT/Central Sales Tax and
b. Income from Services rendered are booked based on
agreements/arrangements with the concerned parties and recognized on
proportionate completion service contract method.
3. Use of Estimates
In preparation of financial statements estimates and assumptions are
required to be made which affect the reported amounts of
assets/liabilities on the date of financial statements and the reported
amounts of revenues and expenses during the reporting period. The
difference between estimates and actual are recognized in the period in
which results are crystallized.
4. Fixed Assets
Fixed Assets are stated at historical cost. Cost includes freight,
installation cost, duties, taxes, and incidental expenses but net of
Excise duty (CEN VAT) and VAT (ITR).
Depreciation is charged on Straight Line Method at the rate prescribed
under Schedule XIV of the Companies Act, 1956.
6. Borrowing Cost
Borrowing Cost attributable to acquisitions and construction of assets
are capitalized as a part of cost of such assets up to the date when
such assets are ready for its intended use and other borrowing cost are
charged to Profit & Loss Account.
a. Raw Materials, Stores & Spares, Finished Goods are valued at cost
or net realizable value whichever is lower. Reusable Waste is valued at
net realizable value.
b. Raw Material and Finished goods are valued net of excise duty.
However Finished Goods at branches are valued at inclusive of excise
duty and freight.
c. Goods or materials in transit are valued at cost to date.
d. Cost comprises cost of purchase, cost of conversion and other cost
incurred in bringing the inventory to present location and condition.
Cost is arrived at weighted average basis.
8. Foreign Currency Transactions:
Foreign currency transactions are accounted for at the exchange rates
prevailing at the date of the transaction.
Monetary assets and liabilities related to foreign currency transaction
remaining unsettled are translated at year end rate.
The difference in translation of monetary assets and liabilities and
realized gains and losses on foreign exchange transaction are
recognized in the profit and loss account.
Foreign currency gain/loss relating to translation of net investments
in non integral foreign operation is recognized in the foreign currency
Premium/discount on forward foreign exchange contracts are pro rated
over the period of the contract.
9. Retirement Benefits
Contribution to Provident Fund and ESIC are deposited with respective
Government Authorities. The company has taken a policy for Gratuity
Liability from LIC of India.
Current Tax is determined as the amount of tax payable in respect of
taxable income for the year. Deferred tax is recognized, subject to
consideration of prudence in respect of deferred tax assets, on timing
difference between taxable income and accounting income that originate
in one period and are capable of reversal in one or more periods.
11. Impairment of Assets
The Company assesses at each Balance Sheet date whether there is any
indication that an asset may be impaired. If any such indication
exists, the Company estimates the recoverable amount of the asset. If
such recoverable amount of the asset or the recoverable amount of the
cash generating unit to which the asset belongs is less than its
carrying amount, the carrying amount is reduced to its recoverable
amount. The reduction is treated as an impairment loss and is
recognized in the Profit and Loss account. If at the Balance Sheet date
there is an indication that if a previously assessed impairment loss no
longer exists, the recoverable amount is reassessed and the asset is
reflected at the recoverable amount.
12. Provisions, Contingent Liabilities and Commitments
Provisions involving substantial degree of estimation in measurement
are recognized when there is a permanent obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent Liabilities are not recognized but are disclosed in the
13. Miscellaneous Expenditure
Preliminary Expenditure is amortized over a period of 5 years.
b) The Company has issued only one class of shares referred to as
equity shares having a par value ofRs. 10/-. All equity shares carry one
vote per share without restrictions and are entitled to dividend, as
and when declared. All shares rank equally with regard to the
Company''s residual assets.
c) The Company has not issued any bonus shares, equity shares pursuant
to contract(s) without payment being received in cash and had not
bought back any equity shares during the period of 5 years immediately
preceding the Balance Sheet date.