Mar 31, 2011
A) Preparation of financial statements
The financial statements have been prepared under the historical cost convention, in accordance with Generally Accepted Accounting Principles in India and the provisions of Companies Act, 1956.
b) Method of Accounting
The Company follows mercantile system of accounting and recognizes income and expenditure on accrual basis.
c) Fixed Assets
Fixed Assets are stated at their original cost of acquisition, net of accumulated depreciation and CENVAT credit, and include taxes, freight and other incidental expenses related to their acquisition / construction / installation. Pre-operative expenses relatable to a specific project are capitalized till all the activities necessary to prepare the qualifying asset for its intended use are completed. Expenses capitalized also include applicable borrowing costs.
Investments are classified into current and long-term investments. Current Investments are carried at lower of cost or fair market value. Any diminution in their value is recognized in the profit and loss account. Long-term investments, including investment in subsidiaries, are carried at cost. Diminution of temporary nature in the value of such long-term investments is not provided for except when such diminution is determined to be of a permanent nature.
Inventories are valued at cost or net realizable value, whichever is less. Cost comprises of expenditure incurred in the normal course of business in brining such inventories to its their location. Finished goods at the factory are valued at cost in all applicable cases. Obsolete, non-moving and defective inventories are identified at the time of physical verification of inventories and adequate provision, wherever necessary, is made for such inventories.
f) Intangible Assets
Intangible Assets are recognized in the Balance Sheet at cost, net of any accumulated amortization / impairment. Preliminary expenses are amortized over a period of 5 years. De-merger expenses are amortized over a period of ten years.
g) Revenue Recognition
Income is recognized when the goods are dispatched in accordance with terms of sale. Sale is inclusive of excise duty.
In respect of income from services, income is recognized as and when the rendering of services is complete. Revenue from time period services is recognized on the basis of time incurred in providing such services.
h) Borrowing Costs
Borrowing costs that are directly attributable to the acquisition or construction of a qualifying asset are capitalized as part of cost of such asset. Other borrowing costs are treated as a period cost and are expensed in the year of occurrence.
Depreciation is provided on straight-line method at the rates specified in Schedule XIV to the Companies Act, 1956. Depreciation on assets added, sold or discarded is provided for on pro-rata basis.
j) Foreign Currency Transaction
Foreign currency transactions, being in the nature of integral operations, are accounted for at the rates of exchange prevailing as on the date of transaction. Gains and losses resulting from settlement of such transactions and from translation of monetary assets and liabilities denominated in foreign currencies are recognized in the profit and loss account. Exchange differences relating to fixed assets are adjusted to the cost of the asset.
k) Impairment of assets
An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable value. An impairment loss is charged to the Profit and Loss account in the year in which an asset is identified as impaired.
l) Income and Deferred Tax
The provision made for income tax in the accounts comprises both the current and deferred tax. Current tax is provided for on the taxable income for the year. The deferred tax assets and liabilities for the year arising on account of timing differences (net) are recognized in the Profit and Loss account and the cumulative effect thereof is reflected in the Balance Sheet.
m) Contingent Liabilities and Contingent Assets
Liabilities, which are contingent in nature, are not recognized in the books of account but are disclosed separately in the Notes. Contingent Assets are neither recognized nor disclosed in the books of account.
Mar 31, 2010
1.A. METHOD OF ACCOUNTING
a) The financial statements are prepared under the historical cost convention using the accrual method of accounting unless stated otherwise hereinafter.
b) The Accounting policies not specifically referred are consistent with generally accepted accounting principles unless otherwise stated hereinafter.
B. REVENUE RECOGNITION
All income and Expenditure are accounted for an accrual basis. Dividend income is recognized as and when received.
C. FIXED ASSETS
Fixed Assets are stated at cost less depreciation, cost includes all identifiable expenditure incurred to bring the assets to its present condition and location.
a) Depreciation has been provided based on the usuage of the asset.
b) Depreciation on fixed assets added/disposed off during the year is provided on pro-rata basis.
Investments held by company are of long term nature, which is carried at cost. Provisions against diminution in value of investment has been made in case diminution is considered as other than temporary as per the criteria laid down by the Board of Directors, after considering that such investment are of strategic in nature.
F. VALUATION OF INVESTORIES
Closing stock is valued at cost or net realizable market value whichever is lower. Cost for the above purpose is ascertained on FIFO method, however Unlisted stocks are valued at cost only.
G TAX ON INCOME
Current tax is determined as the tax payable in respect of taxable income for the year if any.
Deferred tax for the year is recognized on timing difference; being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.
Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date. Deferred tax assets are recognized and carried forward only if there is a reasonable / virtual certainty of realization.
H. PRELIMINARY EXPENSES
Preliminary expenses and pre-operative Expenses are amortized over a period of 10 years I. DISCLOSURE AS PER AS-15 - RETIREMENT BENEFITS AS - 15 is not applicable as the number of employees have not fulfilled the required conditions for its applicability.
J. SEGMENTAL REPORTING
The company prepares its segmental information in conformity with the accounting policies adopted for preparing and presenting the financial statements of the Group as a whole.
2. RELATED PARTY DISCLOSURE
There are no Related party disclosures as required by Accounting Standard 18 "Related Party Disclosure"
NOTE: Related party relationship is identified by the Management an relied upon by the auditor.
3. DEFERRED TAX
The deferred tax liability (asset) has been provided as explained in para G above to comply with Accounting Standard 22 on According for Taxes on Income, Issued by the Institute of Charted Accountants of India.
The Company has Deferred Tax Asset of Rs.29,39,812 as compared to Rs. 27,95,441