1.1 Conventions & Basis of Accounting:
The Financial Statements of the company have been prepared in
accordance with the Generally Accepted Accounting Principles in India
(Indian GAAP) to comply with the Accounting Standards notified under
the Companies (Accounting Standards) Rules,2006 (as Amended) and the
relevant provisions of the Companies Act 1956. These Financial
Statements have been prepared on accrual basis under the historical
cost convention. The Accounting policies adopted in preparation of
Financial Statements are consistent with those followed in the previous
1.2 Use of Estimates:
The presentation of financial statements requires estimates and
assumptions to be made that effect the reported amount of Assets &
Liabilities on the date of the financial statements and the reported
amount of revenues and expenses during the reporting period. Difference
between the actual result and estimates are recohnised in the period in
which the results are known/materialized.
1.3 Tangible Assets:
Tangible Assets are stated at acquisition cost, net of accumulated
Profits arising from the sale of fixed assets which are carried at cost
are recognised in the Statement of Profit and Loss.
Depreciation is calculated as per straight line method on single shift
basis at rates Specified in Schedule XIV of the Companies Act, 1956 and
on full year basis if asset is put to use for more than 180 days
otherwise at half the rate.
Current Investments are carried at lower of Cost or Realisable Value.
Long Term investments are carried at cost. Only in case there is
Permanent diminution in value of Long Term Investments it is provided
Inventories are valued at lower of cost or Net Realisable Value. Cost
is determined using Weighted Average Method for Raw Materials &
Finished Goods and FIFO method for consumable spares and Packing
Materials. The cost of finished goods and Work in progress comprises
raw materials, direct labour, other direct costs and related production
overheads.Net Realisable Value is the estimated selling price in the
ordinary course of business, less the estimated cost of completion and
the estimated costs necessary to make the sale.
1.6 Revenue recognition:
Sale of Goods: Sales are recognised when the substantial risks and
rewards of ownership in the goods are transferred to the buyer as per
the terms of the contract and are recognised net of sale returns and
Sale of Services: Services are recognised when services are rendered
and related costs are incurred. Other Income:
Interest: Interest Income is recognised on a time proportion basis
taking into account the amount outstanding and the rate applicable.
Dividend: Dividend Income is recognised when the right to receive
dividend is established.
Rent: Rent is recognised on time proportionate basis.
1.7 Employee Benefit:
Employee benefits include Provident Fund, Gratuity Fund and Compensated
Provident Fund: Contribution towards provident fund for employees is
made to the regulatory authorities, where the Company has no further
obligations. Such benefits are classified as Defined Contribution
Schemes as the Company doesnot carry any further obligations, apart
from the contributions made on a monthly basis.They are charged as an
expense when they fall due based on amount of contribution required to
Gratuity: The Company provides for gratuity which is in the form of a
defined benefit plan on the basis of actuarial valuation done by LIC
carried out at each Balance Sheet date.
Compensated Abscences: The Company has the policy of non accumulating
absences and is accounted for on cash basis.
1.8 Segment Reporting:
There are no ''Geographical Segments'' and ''Business Segments''
reportable under AS-17.
1.9 Earning Per Share:
Basic Earning Per Share is calculated by dividing the net profit or
loss for the period attributable to equity shareholders by the weighted
average number of equity share outstanding during the period.
Diluted Earning Per Share: Diluted EPS is computed by dividing the
profit/(loss) after tax(including the post-tax effect of extraordinary
items, if any) as adjusted for dividend, interest and other chaiges to
expense or income relating to the dilutive potential equity shares, by
the weighted average number of equity shares considered for deriving
basic earning per share and the weighted average number of equity
shares which could have been issued on the conversion of all dilutive
potential equity shares.
1.10 Taxes on Income:
Current Tax: Provision for Current Tax is made taking into
consideration the provisions under the Income Tax Act, 1961.
Deferred Tax: Deferred Tax resulting from Timing Difference
between Taxable and Accounting Income is accounted for using the tax
rates and laws that are enacted or substantially enacted as on Balance
Sheet date. Deferred Tax is recognised and carried forward only to the
extent that there is visual certainity that the asset will be
recognised in future.
1.11 Impairment of Assets:
Carrying Amount of asset is reviewed at the Balance Sheet date if there
is any indication of impairment based on the internal and external
The assets are treated as impaired when the carrying amount of the
asset exceeds its recoverable amount. An impairment loss if any is
charged to the Statement of Profit and Loss as and when it arises.
Impairment Loss recognised in prior years is reversed when there is an
indication that impairment loss recognised for the asset no longer
exists or may have decreased.
1.12 Provisions & Contingent Liabilities:
Provisions: A provision is required when the Company has a present
obligation as a result of past events and it is probable that an
outflow of resources will be required to settle the obligation in
respect of which a reliable estimate can be made. Provisions are not
discounted to the Present Value and are determined based on the best
estimate required to settle the obligation at the Balance Sheet
Date.These are reviewed at each Balance Sheet Date and adjusted to
reflect the Current best estimates.
Contingent Liabilities: Contingent liabilities are not recognised but
are disclosed in the notes. Contingent assets are neither recognised
nor disclosed in the financial statements.
1.13 Insurance Claims:
Insurance claims are accounted for on the basis of claims
admitted/expected to be admitted and to the extent there is no
uncertainity in receiving the claims.
1.14 Cash Flow Statement:
Cash Flows are reported using the indirect method,whereby profit/(loss)
before extraordinary items and tax is adjusted for the effects of
transactions of non cash nature and any deferrals or accruals of past
or future cash receipts or payments. The cash flows from operating
investing and financing activities of the Company are segregated based
on the available information.