Mar 31, 2014
(a) The company follows the accural system of accounting in accordance with the requirement of the Companies Act, 1956 and complies with the accounting standards referred to in sub- section 211 of the said Act.
(b) The accounts are prepared on historical cost basis and on the basis of going concern. Accounting policies not specifically referred to otherwise are consistent with generally accepted accounting priniciples.
Mar 31, 2012
A. BASIS FOR PREPARATION OF FINANCIAL STATEMENTS
The financial statements have been prepared under the historical cost convention on the accrual basis and in accordance with Generally Accepted Accounting Principles (GAAP) applicable in India, the Accounting Standards notified under section 211(3C) and other relevant provisions of the Companies Act, 1956.
b. USE OF ESTIMATES
The preparation of Financial Statements in conformity with GAAP requires that the management of the Company makes estimates and assumptions that affect the reported amounts of income and expenses of the period, the reported balances of assets and liabilities and the disclosures relating to contingent liabilities as of the date of the financial statements. Examples of such estimates include the useful lives of fixed assets and intangible assets, provision for doubtful debts/advances, future obligations in respect of retirement benefit plans, etc. Actual results could differ from these estimates. Differences between the actual results and estimates are recognized in the period in which the results are known/ materialized. Management believes that the estimates used in preparation of financial statements are prudent and reasonable.
c. FIXED ASSETS:
Fixed Assets are stated at cost less accumulated depreciation. All significant costs relating to the acquisition and installation of fixed assets are capitalized. Assets acquired under finance lease are recognized at the inception of lease at the lower of the fair value or present value of Minimum Lease payments. The initial direct costs incurred in connection with the finance lease are recognized as an assets under the lease.
d. DEPRECIATION AND AMORTISATION:
Depreciation on Fixed Assets has been provided on Straight-line Method (SLM) at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956 which coincides with the useful life of the assets as estimated by the management. Depreciation on assets sold/discarded during the period is proportionately charged. Individual low cost assets (acquired for less than Rs.5,000/-) are depreciated in the year of acquisition. Intangible assets are amortized over their estimated useful life on straight-line basis.
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.
Current Investments are carried at lower of cost or market/fair value determined on an individual investment basis.
Long Term Investments are valued at cost. Provision for diminution in the value of long term investment is made only if such decline is other than temporary in nature.
f. FOREIGN CURRENCY TRANSACTIONS:
Foreign exchange transactions are normally recorded at the exchange rate prevailing on the date of the respective transaction. Foreign exchange monetary items in the balance sheet are translated at the year-end rates. Exchange differences on settlement of/ conversion are recognized in the Profit or Loss Account.
g. BORROWING COSTS
Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that takes necessarily substantial period of time to get ready for the intended use. All other borrowing costs are charged to revenue.
h. REVENUE RECOGNITION
i. The Company recognizes revenue on sale of goods when goods are dispatched to the customers which are when the risk and rewards of the ownership of the goods pass on to the customers.
ii. Sales are net of discounts and inclusive of Excise Duty and Sales tax, wherever applicable.
iii. Interest income is recognized on time-proportion basis.
Inventories are valued at lower of cost and estimated net realizable value after providing for cost of obsolescence and other anticipated losses, wherever considered necessary. Cost includes taxes, duties and all incidental expenses directly attributable to the purchases. Method of assignment of cost is as under:
i. Raw Material, Stores and Spares: First in First out Method
ii. Work In Progress: Direct Expenses plus appropriate factory overheads on the basis of completed production
iii. Finished goods: Cost of goods plus direct expenses plus appropriate factory overheads
iv. Traded goods: Actual costs
j. EMPLOYEE BENEFITS:
In accordance with the Payment of Gratuity Act, 1972, the company provides for gratuity, a non-funded defined benefit retirement plan ("Gratuity Plan") covering all employees. The company estimates its liability on valuation as per the payment of Gratuity Act as of each year-end balance sheet date and is charged to Profit and Loss Account in accordance with AS-15 (Revised).
b. Provident Fund/ESI:
(i) The Company's superannuating scheme, State governed provident fund scheme and employee state insurance scheme are the defined contribution plans. The company contributes a fixed sum to the Provident Fund/ Employee State Insurance Scheme maintained by the Central Government. The contribution paid/payable under the schemes is recognized during the period in which the employee renders the related service.
c. Leave Salary:
In respect of Leave Salary, the same is accounted as and when the liability arises in accordance with the provision of law governing the establishment and at each balance sheet date the leave encashment eligibility is determined and provided for.
Finance Lease: Leases which effectively transfer to the company the entire risks and benefit incidental to ownership of the leased item, are classified as Finance Lease. Lease rentals are capitalized at the lower of the fair value and present value of the minimum lease payments at the inception of the lease term and disclosed as leased assets. Lease payments are apportioned between finance charges and reduction of the lease liability based on the implicit rate of return. Finance charges are charged directly against income life of the assets.
l. TAXES ON INCOME:
Taxes on Income are accrued in the same period as the revenue and the expenses to which they relate. Deferred tax assets are recognized to the extent there is a virtual certainty of its realization.
m. GOVERNMENT GRANTS:
Subsidy received from the State Government towards the part of the project cost has been shown under the head "Reserves and Surplus"
n. EARNINGS PER SHARE:
Earnings considered in ascertaining the Company's earnings per share comprise of the net profit after tax. The number of shares used in computing the basic earnings per share is weighted average number of shares outstanding during the year. The number of shares used in computing diluted earnings per share comprises the weighted average share considered for deriving basic earnings per share, and also the weighted average number of shares, if any, which would have been issued on the conversion of dilutive potential equity shares, if any.
o. IMPAIRMENT OF ASSETS:
As at Balance Sheet Date, the carrying amount of assets is tested for impairment so as to determine:
"a. Provision for Impairment Loss, if any, required or"b. The reversal, if any, required of impairment loss recognized in previous periods.""
Impairment Loss is recognized when the carrying amount of an asset exceeds its recoverable amount.
A provision is recognized when an enterprise has a potential 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 based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to the current best estimates.