I. BASIS OF PREPARATION
The financial statements have been prepared to comply in all material
respects with the Accounting Standards notified by Companies
(Accounting Standards) rules, 2006, (as amended) and the relevant
provisions of the Companies Act, 1956. The financial statements have
been prepared under the historical cost convention on an accrual basis.
The accounting policies have been consistently applied by the Company.
II. USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles require management to make estimates and
assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent liability at the date of the financial
statements and the results of operations during the reporting period.
Although these estimates are based upon management''s best knowledge of
current events and actions, actual results could differ from these
III. FIXED ASSETS
Fixed assets are stated at cost, less accumulated depreciation and
impairment loses if any. Cost comprises the purchase price and any
attributable cost of bringing the asset to its working condition for
its intended use. Borrowing costs relating to acquisition to fixed
assets which takes substantial period of time to get ready for its
intended use are also included to the extent they relates to the period
till such assets are ready to be put to use.
Depreciation on assets is provided using the Straight Line Method at
the rates computed based on estimated useful life of the assets, which
are equal to corresponding rates prescribed under Schedule XIV to the
Companies Act, 1956.
The carrying amounts are reviewed at each balance sheet date if there
is any indication of impairment based on internal/external factors. An
impairment loss is recognized wherever the carrying amount of an asset
exceeds its recoverable amount. The recoverable amount is greater of
the asset''s net selling price and value in use. In assessing value in
use, the estimated future cash flows are discounted to their present
value at the weighted average cost of capital.
After impairment, depreciation is provided on the revised carrying
amount of the assets over its remaining useful life.
Investments that are readily realizable and intended to be held for not
more than a year are classified as current investments. All other
investment are classified as long-term investment. Current investments
are carried at lower of cost and fair value determined on an individual
investment basis. Long Term Investments are carried at cost. However,
provision for diminution in value is made to recognize a decline other
than temporary in the value of the investments.
VII. RETIREMENT AND OTHER EMPLOYEE BENEFITS.
Defined Contribution Plan
Contributions to the provident and pension funds are made monthly at a
predetermined rate to the Regional Provident Fund Commissioner and
debited to the profit and loss account on an accrual basis. There are
no other obligations other than the contribution payable to the
Defined Benefit Plan
Gratuity liability is defined benefit obligations and liability toward
gratuity is provided on the basis of an actuarial valuation as at
balance sheet date using the Projected Unit Credit method and debited
to the profit and loss account on an accrual basis. Actuarial gains and
losses arising during the year are recognized in the profit and loss
Long term compensated absence is similarity valued on an actuarial
basis. Short term compensated absence are provided for on estimates
Inventories are stated at cost or net realizable value, whichever is
lower. The cost is arrived at on first in first out method (FIFO).
IX. REVENUE RECOGNITION
Sales have been recognized on the basis of works completed and billed
to the customers.
X. PRIOR PERIOD ITEMS
Income and Expenses pertaining to the earlier year, if any, which have
a material impact on the financial statements are disclosed
Tax expense comprises of current and deferred tax. Current income tax
is measured at the amount expected to be paid to the authority in
accordance with Income-tax Act, 1961. Deferred income taxes reflects
the impact of current year timing differences between taxable income
and accounting income for the year and reversal of timing differences
of earlier years.
Deferred tax is measured based on the tax rates and the tax laws
enacted or substantively enacted at the balance sheet date. Deferred
tax assets and deferred tax liabilities are offset, if a legally
enforceable right exists to set off current tax assets against current
tax liabilities and the deferred tax and deferred tax liabilities
relate to the taxes on income levied by some governing taxation laws.
Deferred tax assets are recognized only to the extent that there is
reasonable certainty that sufficient future taxable income will be
available against such deferred tax assets can be realized. In
situation where the company has unabsorbed depreciation or carry
forward tax losses, all deferred tax assets are recognized only if
there is virtual certainty supported by convincing evidence that they
can be realized against future taxable profits.
At each balance sheet date the Company re-assesses unrecognized
deferred tax assets. It recognized unrecognized deferred tax assets to
the extent that it has become reasonable certain or virtually certain,
as the case may be that sufficient future taxable income will be
available against which such deferred tax assets can be realized.
XII. EARNING PER SHARE
Basic earning per share are calculated by dividing the net profit or
loss for the period attributable to equity shareholders (after
deducting attributable taxes) by the weighted average number of equity
shares outstanding during the period. Partly paid equity shares are
treated as fraction of an equity share to the extent that they were
entitled to participate in dividends relative to a fully paid equity
share during the reporting period.
A provision is recognized when an enterprise has a present obligation
as a result of past event; 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 its
present value and are determined bases on 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 are not recognized but are disclosed
in the notes. Contingent assets are neither recognized not disclosed in
the financial statement.