1.1. Basis for preparation of accounts:
The Accounts have been prepared to comply in all material aspects with
applicable Accounting Principles in India, the applicable Accounting
Standards notified under Section 211(3C) of The Companies Act 1956 and
the relevant provisions thereof. Financial Statements are prepared
based on historical cost and on the basis of a going concern. The
Company follows the mercantile system ofAccounting and recognizes
income and expenditure on an accrual basis.
Fixed Assets are stated at cost of acquisition inclusive of freight,
taxes, insurance etc. relating to the acquisition including
installation/erection charges up to the date the asset is put to use,
Borrowing costs attributable to acquisition / construction or
production of a qualifying asset is capitalized as a part of cost of
The Company is providing depreciation on Written Down Value (WDV)
method by adopting the rates specified in Schedule XIV of the Companies
Act, 1956 in respect of all Fixed Assets capitalized up to 31st March,
1997. In respect of additions from 1st April 1997, the Company is
providing depreciation by adopting Straight Line method specified in
Schedule XIV ofthe Companies Act, 1956. ERP Software, being intangible
asset is depreciated at 20% on straight line basis in line with AS 26.
Depreciation on additions during the year is provided on pro-rata
Leasehold land is amortized over the period ofthe Lease.
1.3. Revenue Recognition:
Sales are stated at net of returns and, sales tax. The Excise Duty
relatable to sales is separately disclosed and deducted from Sales.
Sales Revenue is recognized when significant risks and rewards of
ownership ofthe goods have passed to the buyer.
Dividend income from investments is accounted for when the right to
receive the payment is established.
Interest Income is recognized on a time proportion basis taking in to
account the amount outstanding and the rate applicable.
Investments are classified into Current and long term investments.
Current investments are stated at the lower of cost and fair value.
Long term investments are stated at cost.
Impairment loss, if any is provided to the extent, the carrying amount
of the assets exceeds their recoverable amount. Recoverable amount is
higher of an asset's net selling price and its value in use. Value in
use is the present value of estimated future cash flows expected to
arise from the continuing use of an asset and from its disposal at the
end of its useful life.
1.6. Trade Receivables and Loans and advances:
Sundry Debtors and Loans and advances are stated after making adequate
provisions for doubtful balances.
A Provision is recognized when there is a present obligation as a
result of a past event, it is probable that an outflow of resources
will be required to settle the obligation and in respect of which
reliable estimate can be made. Provision is not discounted to its
present value and is determined based on the best estimate required to
settle the obligation at the year end date. These are reviewed at each
year end date and adjusted to reflect the best current estimate.
1.8. Retirement /Post retirement benefits:
The Company also provides for retirement/post retirement benefits in
the form of Gratuity, Pension, and Leave Encashment. Such benefits are
provided for based on the valuations, as at the Balance Sheet date,
made by independent actuaries. Termination benefits are recognized as
an expense as and when incurred.
1.9. Taxes on Income:
Current Tax is determined as the amount of tax payable in respect of
taxable income for the period.
Deferred tax is recognized, subject to the consideration of prudence,
on timing differences, being the difference between the taxable incomes
and accounting income that originate in one period and are capable of
reversal in one or more subsequent periods. Deferred tax assets are not
recognized on unabsorbed depreciation and carry forward of losses
unless there is virtual certainty that sufficient future taxable income
will be available against which such deferred tax asset can be
1.10. Foreign CurrencyTransactions:
Transactions in foreign currency are recorded at exchange rates
prevailing at the time ofthe transactions and exchange difference
arising from foreign currency transaction are dealt with in the profit
and loss account and capitalized where they relate to the Fixed Assets.
Current Assets and Liabilities at year end are being converted at
closing rates and exchange gains /losses are dealt with in the profit
and loss account, as per AS 11.
1.11. Grant / subsidies
Grant / subsidy received under Central Investment Subsidy Scheme is
directly credited to capital reserve.
Inventories are valued at lower of cost,computed on a weighted average
basis and estimated net realizable value, after providing for cost of
obsolescene and other anticipated losses, wherever considered
necessary. Finished goods and work in Progress include cost of
conversion and other costs incurred in bringing the inventories to
their present location and condition.
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalized as part of cost of
such asset. As per AS-16 Borrowing costs , a qualifying asset is
one that takes necessarily substantial period of time to get ready for
its intended use. All the other borrowing costs are expensed as and
Basic earnings per share is calculated by dividing the net profit or
loss for the year attributable to equity share holders by weighted
average number of equity shares outstanding during the year. For the
purpose of calculating diluted earnings per share, the net profit or
loss for the year attributable to equity share holders and weighted
average number of shares outstanding during the year are adjusted for
the effects of dilutive part of equity shares , if any.
Identification of Segments
The Company has complied with AS 17 Segment Reporting with the
business as its primary segment. The risk and awards are very similar
in different geographical areas and hence there is no reportable
secondary segment as defined in AS-17.
(i) Revenues have been identified to segments on the basis of their
relationship to the operative activities of the segment. Revenues and
expenses that relate to the enterprise as a whole and are not allocable
to segments on a reasonable basis have been included under
Un-allocable expenses .
(ii) Inter segment revenue and expense are eliminated.