Mar 31, 2015
(A) Basis of Preparation of Financial Statements:
The Company follows mercantile system of accounting except Leave Pay and retirement benefits which are accounted for on cash basis and sales claims are accounted for as and when settled.
(B) FIXED ASSETS
Fixed Assets are stated at cost including addition in value due to revaluation (refer Note No. 2.02) less depreciation. Cost includes direct expenses and interest on borrowings attributable to acquisition of fixed assets up to the date of commissioning of the assets and allocation of project & pre operative expenses.
Pursuant to the enactment of Companies Act 2013, the company has applied the estimated useful lives as specified in Schedule II. Accordingly, the unamortised carrying value is being depreciated / amortised over the revised/ remaining useful lives on straight line value method basis. The written down value of fixed assets whose lives have expired as at 01/04/2014 have been adjusted from opening retained earnings as on 01/04/2014.
i) Raw materials, Stores & Spares and work in process are valued at cost..
ii) Finished goods are valued at lower of cost or net realizable value.
iii) Scrap is valued at estimated realizable value.
Cost is computed on weighted average basis. Finished goods and process stock include cost of conversion and other cost incurred in bringing the inventories to their present location and condition but excludes VAT/Excise Duty, which are subsequently recoverable from the taxing authorities.
(E) REVENUE FROM SALE OF PRODUCT & SERVICES
Revenues from sales of product is recognized when all significant risk and rewards of ownership of goods are transferred to customers and are net of sales tax, inclusive of Excise duty, net of rate differences and freight on certain parties.
(F) EMPLOYEES BENEFITS
i) Contributions to provident and other funds made to the Government are charged off to the Statement of Profit & Loss .
ii) Gratuity Liability is defined obligation and calculated on the basis of actuarial valuation at the end of each financial year and it is being accounted for and as when paid.
iii) Leave salary is calculated on accumulated leave and is accounted for as and when paid.
Long term investments are stated at cost. Current investments are valued at lower of cost or fair market value. Provision for diminution in the value of long term investments is made only if such a decline is other than temporary.
(H) EXCISE DUTY
Excise duty is accounted for on the basis of payments made in respect of goods cleared and provision is made on closing stock of finished goods & scrap.
(I) SEGMENT REPORTING
The accounting policies applicable to the reportable segments are the same as those used in the preparation of the financial statements. Segment revenue and expenses include amounts, which are directly identifiable to the segment or allocable on a reasonable basis Segment assets include all operating assets used by the segment and consist primarily of debtors, inventories and fixed assets. Segment liabilities include all operating liabilities and consist primarily of deposit from customers, creditors etc.
Current Tax :
Provision for current tax is recognized in accordance with the provisions of Income Tax Act, 1961 and is made annually based on the tax liability after taking credit for tax allowances and exemptions.
Deferred Taxes :
The carrying amount of deferred tax liabilities is reviewed at each Balance Sheet date. The deferred tax asset and deferred tax liability are calculated by applying tax rates and tax laws that have been enacted as on Balance Sheet date. Deferred tax assets arising mainly on account of brought forward losses / unabsorbed depreciation/other timing differences under tax laws are recognized only if there is a virtual certainty of its realization supported by convincing evidence. Deferred tax liabilities on account of timing differences are recognized only at each balance sheet date.
(K) IMPAIRMENT OF ASSETS
An assets is treated as impaired when the carrying cost of the asset exceeds its recoverable value. An impairment loss is charged to the Statement of Profit & Loss in the year in which an asset is identified as impaired.
(L) PROVISION, CONTINGENT LIABILITIES & CONTINGENT ASSETS
Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the Notes. Contingent Assets are neither recognized nor disclosed in the financial statements.
(M) EARNING PER SHARE
Basic earning per share is calculated by dividing the net profit or loss for the period attributable to equity shareholder by the weighted average number of equity share outstanding during the period.
For purpose of calculating diluted earning per share net profit or loss for the period attributable to equity shareholder by the weighted average number of equity share outstanding during the period are adjusted for the effects of all dilutive potential equity shares.