1 ACCOUNTING CONVENTION:
The Financial Statements are prepared under the historical cost
convention on accrual basis and in accordance with Generally Accepted
Accounting Principles in India (Indian GAAP). The said financial
statements comply with the relevant provisions of the Companies Act
,1956 (the Act) and the mandatory Accounting Standards notified by the
Central Government of India under the Companies (Accounting Standards)
Rules 2006, to the extent applicable.
2 USE OF ESTIMATES
The preparation of financial statements requires estimates and
assumptions to be made that affect the reported amount of assets and
liabilities on the date of the financial statements and the reported
amount of revenues and expenses during the reporting period. Management
believes that the estimates used in the preparation of financial
statements are prudent and reasonable. Differences, if any, between the
actual results and the estimates are recognised in the period in which
the results are known/materialised.
3 FIXED ASSETS, DEPRECIATION AND AMORTISATION:
a) Fixed assets are stated at original cost (net of CENVAT/VAT wherever
applicable) including expenses related to acquisition and installation.
Borrowing costs are capitalized as part of qualifying fixed assets when
it is possible that they will result in future economic benefits. Other
borrowing costs are expensed.
b) Capital work in progress is stated at the amount expended up to the
balance sheet date.
c) Capital Subsidy relating to projects in backward area is credited to
capital subsidy reserve on receipt and Government grants relating to
specific assets are deducted from the cost of such assets.
d) Depreciation is provided, on all depreciable assets, except
intangible assets, on a straight line basis at the rates prescribed
under Schedule XIV of the Companies Act, 1956 .
Depreciation on assets added/ disposed off during the year is provided
on pro-rata basis from the month of addition or up to the month prior
to the month of disposal, as applicable.
e) Intangible Assets are amortized over a period of 5 years or based on
the period of usage/licence, whichever is lower.
f) Individual assets costing less than Rs.5,000 each are depreciated in
full in the year of acquisition.
4 IMPAIRMENT OF ASSETS:
At each balance sheet date, the carrying values of the tangible and
intangible assets are reviewed to determine whether there is any
indication that those assets have suffered an impairment loss. If any
such indication exists, the recoverable amount of the asset is
estimated in order to determine the extent of the impairment loss (if
Where there is an indication that there is a likely impairment loss for
a group of assets, the Company estimates the recoverable amount of the
group of assets as a whole, and the impairment loss is recognised.
Investments that are intended to be held for more than a year, from the
date of acquisition, are classified as long term investments and are
carried at cost. However, provision for diminution is made in the value
of investments, if such diminution is other than of temporary nature .
Current investments are stated at lower of cost or fair value.
a) Finished Goods and work-in-progress are valued at lower of cost and
net realizable value. Cost comprises of materials, labour, and an
appropriate proportion of production overheads and excludes interest,
selling and distribution expenses. Material cost is computed on
weighted average basis.
b) Raw materials, stores and spares are valued at lower of cost and net
realizable value. Cost computed on weighted average basis includes
freight .taxes and duties net of CENVAT/VAT credit, wherever
7 REVENUE RECOGNITION:
a) Revenues are recognized and expenses are accounted on their accrual
with necessary provisions for all known liabilities and losses. Revenue
from Sale of goods are recognised on despatch of goods. Sales are
accounted net of sales tax / VAT, discounts and returns as applicable.
b) Revenue from rendering of services is recognised on completion of
services, as per the terms of contracts with customers.
c) Export Benefits under Advance licence scheme are recognized on
accrual basis on completion of export obligation.
d) Dividend income on investments is accounted for when the right to
receive the payment is established. Interest income is recognised on a
time proportion basis considering the underlying interest rate.
8 EMPLOYEE BENEFITS: SHORTTERM EMPLOYEE BENEFITS
Short term employee benefits including performance incentive and
compensated absences which are expected to occur within 12 months after
the end of the period in which the employee renders related service are
determined as per Company''s policy and recognized as expense based on
expected obligation on undiscounted basis.
LONG TERM COMPENSATED ABSENCES
Accumulated Compensated absences which fall due beyond 12 months is
provided for in the books on actuarial basis at the year end using
projected unit credit method.
DEFINED CONTRIBUTION PLANS
Superannuation fund. Provident fund and Pension fund are defined
contribution plans towards which the company makes contribution at
predetermined rates to the Superannuation Trust, and the Regional
Provident Fund Commissioner respectively. The same is debited to the
Statement of Profit and Loss on an accrual basis.
The Company also makes contributions to state plans namely Employee''s
State Insurance Fund and Employee''s Pension Scheme 1995 and has no
further obligation beyond making the payment to them.
DEFINED BENEFIT PLAN
The liability for gratuity to employees as at the Balance sheet date is
determined on the basis of actuarial valuation using Projected Unit
Credit method. The amount is funded to a Gratuity fund administered by
the trustees and managed by Life Insurance Corporation of India. The
liability thereof is paid and absorbed in the profit and loss account
at the year end. Actuarial Gains and losses arising during the year are
recognised in the Statement of Profit and Loss immediately.
Termination benefits are recognized as an expense as and when incurred.
9 INCOME TAX:
Income tax comprises the current tax provision and the net change in
the deferred tax asset or liability during the year. Deferred tax
assets and liabilities are recognized for the future tax consequences of
timing differences between the carrying values of the assets and
liabilities and their respective tax bases. Deferred tax assets are
recognized subject to management''s judgment that realization is more
likely than not. Deferred tax assets and liabilities are measured using
enacted tax rates expected to apply to taxable income in the years in
which the timing differences are expected to be received or settled.
The effect on deferred tax assets and liabilities arising from change in
tax rates is recognized in the income statement in the period of
enactment of the change.
10 FOREIGN CURRENCY TRANSACTIONS:
Foreign currency transactions are recorded at the rates of exchange
prevailing on the date of the transactions . Monetary assets and
liabilities outstanding at the year end are translated at the rate of
exchange prevailing at the year end and the gain or loss is recognized
in the Statement of Profit and Loss.
Exchange differences arising on actual payments/ realizations and year
end restatements are also recognised in the statement of profit and
11 RESEARCH AND DEVELOPMENT:
Revenue expenditure on research and development is charged as an
expense in the year in which it is incurred. Capital expenditure on
Research and Development is included in fixed assets and depreciated in
accordance with the depreciation policy of the company.
12 PROVISIONS AND CONTINGENT LIABILITIES:
A provision is recognized when an enterprise has a present obligation
as a result of past event, that can be estimated reliably 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 its present value and are determined
based on best estimate required to settle the obligation at the balance
These are reviewed at each balance sheet date and adjusted to reflect
the current best estimates. When no reliable estimate can be made, a
disclosure is made as contingent liability and is disclosed by way of
notes to accounts.
13 SEGMENT REPORTING:
The accounting policies adopted for segment reporting are in line with
the accounting policies of the Company with the following additional
a) Inter-segment revenues are accounted on the basis of prices charged
to external customers.
b) Revenue and expenses are identified to segments on the basis of
their relationship to the operating activities of the segment. Revenue
and expenses, which relate to the enterprise as a whole and not
allocable to segments on a reasonable basis are included under Other
un-allocable Expenditure net of un- allocable income.
14 EARNINGS/(LOSS) PER SHARE:
The basic earnings/ (loss) per share is computed by dividing the net
profit attributable to equity shareholders for the year by the weighted
average number of equity shares outstanding during the year. The number
of shares used in computing diluted earnings per share comprises the
weighted average shares considered for deriving basic earnings per
share, and also the weighted average number of equity shares that could
have been issued on the conversion of all dilutive potential equity
15 CASH FLOW STATEMENT
The cash flows from operating, investing and financing activities of
the Company are segregated based on the available information. Cash
flows from operating activities 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.
Note 2 (iii)
Rights, Preferences and Restrictions attached to shares
The Company has only one class of equity shares with voting rights (one
vote per share). The dividends proposed by the Board of directors is
subject to approval of the shareholders in the Annual General Meeting.
In the event of liquidation of the Company, the equity shareholders are
entitled to receive only the residual assets of the Company. The
distribution of dividend are in the proportion to the number of equity
shares held by the shareholders.
(a) Principal amount payable to Micro and Small Enterprises (to the
extent identified by the company from available information and relied
upon by the auditors) as at 31st March, 2012 is Rs.29.85 lacs (Previous
year - Rs 36.84 lacs)
(b) There are no dues to Micro and Small Enterprises as per The Micro,
Small and Medium Enterprises Development Act 2006 which are outstanding
for more than 45 days at the Balance Sheet date. The above information
has been determined to the extent such parties have been identified on
the basis of information available with the company. This has been
relied upon by the auditors.
The unclaimed dividend of Rs. 24.09 lacs represents those relating to
the years 2005 to 2011 and no part thereof has remained unpaid or
unclaimed for a period of seven years from the date they became due for
payment requiring transfer to the Investor Education and Protection
Note: In the previous year, dividend income from subsidiary was
recognised as income based on such declaration by the subsidiary
company even though the same was declared after the balance sheet date
as per requirements of old schedule VI. In the current year, such
dividend income is recognised only when the right to receive the same
on or before the balance sheet date is established. This method of
recognition has resulted in a change in accounting policy. However,
there is no impact on the current year profits on account of such