Mar 31, 2013
A. Basis of preparation of Financial Statements:
i. These financial statements have been prepared to comply with all material respect with all the applicable Accounting Standards notified under section 211 (3C) of the Companies Act, 1956 and the relevant provisions of the Companies Act, 1956.
ii. The financial statements are prepared under the historical cost convention and on the accounting principles of going concern. The Company follows the accrual system of accounting where income & expenditure are recognized on accrual basis.
iii. Accounting policies not specifically referred to are consistent and in consonance with generally accepted accounting policies.
B. Use of Estimates:
The preparation of financial statements requires management to make estimates and assumptions that affect amounts in the financial statements and reported notes thereto. Actual results could differ from these estimates. Differences between the actual result and estimates are recognized in periods in which the results are known/ materialised.
C. Fixed Assets:
Fixed assets are stated at cost of acquisition or construction less accumulated depreciation and impairment loss, if any. The cost of an asset comprises of its purchase price (net of cenvat / duty credits availed wherever applicable) and any directly attributable cost of bringing the assets to working condition for its intended use. Expenditure on additions, improvements and renewals is capitalized and expenditure for maintenance and repairs is charged to profit and loss account. Fixed Assets costing upto Rs. 0.05 Lakh are depreciated fully in the year of purchase/ capitalisation.
Depreciation on fixed assets is provided on written down value (WDV) at the rates prescribed in schedule XIV of the Companies Act, 1956.
E. Valuation of Investments:
i. Investments that are readily realizable and intended to be held for not more than a year are classified as current investments. All other investments are classified as long term investments.
ii. Current Investments are carried at lower of cost and fair value determined on an individual investment basis.
iii. 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 investments.
F. Valuation of Inventories:
Cost of inventory includes all cost of purchases and other cost incurred in bringing the inventories to their present location and condition.
Closing Stock is valued as under:-
Raw Material - At cost or net realizable value whichever is less.
Work in Progress - At cost or net realizable value whichever is less.
Finished Goods - At cost or net realizable value whichever is less.
Loose Tools - At cost
Consumable Store - At cost
Industrial Scrap (by-products) - Estimated realizable value
G. Foreign Currency Transactions
Initial Recognition: Transactions denominated in foreign currencies are recorded at the exchange rates prevailing on the date of the transaction.
Conversion: At the year end, monetary items denominated in foreign currencies other than those covered by forward contracts are converted into rupee equivalents at the year-end exchange rates.
Exchange Differences: All exchange differences arising on settlement/conversion of foreign currency transactions are recognized in the statement of profit and loss.
Forward Exchange Contracts: In respect of transactions covered by forward contracts, the difference between the forward rate and the exchange rate at the date of the transaction is recognized as income or expense on the date of booking of forward contract.
H. Revenue Recognition:
Sale of goods is recognized on dispatches to customers, which coincide with the transfer of significant risks and rewards associated with ownership, Inclusive of excise duty and net of VAT & Discount. Interest income is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.
I. Borrowing Costs
Borrowing costs that are attributable to the acquisition / construction of qualifying assets are capitalized as part of the cost of such fixed assets up to the date when such assets are ready for its intended use. All other borrowing costs are recognized as an expense in the period in which they are incurred.
J. Employee Benefits
i. Short Term Employee Benefits:
All employee benefits payable within twelve months of rendering of services are classified as short term benefits. Benefits include salaries, wages, awards, ex-gratia, performance pay, etc. and are recognized in the period in which the employee renders the related service. Liability on account of encashment of leave, Bonus to employee is considered as short term compensated expense provided on actual.
ii. Post Employment Benefit :
a. Defined Contribution Plan:
Provident fund is a defined contribution scheme established under a State Plan. The contributions to the scheme are charged to the profit & loss account in the year when the contributions to the fund are due.
b. Defined Benefit Plan:
Company''s liability towards gratuity is determined using the projected unit credit method which considers each period of service as giving rise to an additional unit of benefit entitlement and measures each unit separately to build up the final obligation. The present value of the obligation under such defined benefit plans is determined based on the actuarial valuation at the date of the Balance Sheet.
K. Earning Per Share
Basic earning per share is computed by dividing the net profit after tax for the year after prior period adjustments attributable to equity shareholders by the weighted average number of equity shares outstanding during the year.
L. Taxation & Deferred Tax
Provision for Current Tax is made in accordance with the provision of Income Tax Act, 1961. Deferred tax is recognized on timing differences between taxable & accounting income / expenditure that originates in one period and are capable of reversal in one or more subsequent period(s).
M. Contingent Liabilities / Provisions
i. Contingent liabilities are not provided in the accounts and are disclosed separately in notes on accounts.
ii. Provision is made in the accounts in respect of contingent liabilities which is likely to materialize into liabilities after the year end, till the finalization of accounts and which have material effect on the position stated in the Balance Sheet.
N. Impairment Of Assets The company assesses at each balance sheet date whether there is any indication due to external factors that an asset or group of assets comprising a cash generating unit (CGU) 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 CGU, to which the asset belongs is less than the carrying amount of the asset or the CGU as the case may be, the carrying amount is reduced to its recoverable amount and the reduction is treated as impairment loss and is recognized in the statement of profit and loss. If at any subsequent balance sheet date, there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is re assessed and the asset is reflected at recoverable amount subject to a maximum of depreciated historical cost and is accordingly reversed in the statement of profit and loss.