Mar 31, 2014
(a) Accounting Convention
The Accounts of the Company are prepared under the Historical Cost
Convention on the Accrual Basis of Accounting in accordance with the
Generally Accepted Accounting Principles in India ("GAAP") and in
compliance with the mandatory Accounting Standards notified under the
Companies (Accounting Standards) Rules, 2006, as amended, and with the
relevant provisions of the Companies Act, 1956. The Financial
Statements are presented in Indian Rupees rounded off to the nearest
rupees.
The preparation of financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent
liabilities at the date of financial statements and the results of
operations during the reporting periods. Examples of such estimate
include future obligations under employee benefit plans, income taxes,
useful lives of fixed assets and intangible assets, impairment of
assets, provision for doubtful debts etc. Management believes that the
estimates used in the preparation of the financial statements are
prudent and reasonable. Actual results could vary from these estimates.
Appropriate changes in estimates are made as the management becomes
aware of the changes in circumstances surrounding the estimates. Any
revision to accounting estimates is recognized in the period in which
such results are known/ materialized. Effect of material changes is
disclosed in the notes to the financial statements.
The Company has also reclassified the previous year figures in
accordance with the requirements applicable in the current year.
All assets and liabilities have been classified as current or
non-current as per the Company''s normal operating cycle and other
criteria set out in the revised Schedule VI to the Companies Act, 1956.
Based on the nature of products and the time between the acquisitions
of assets for processing and their realization in cash and cash
equivalents, the Company has ascertained its operating cycle as 12
months for the purpose of current-non-current classification of assets
and liabilities.
(b) Tangible Assets, Depreciation
i. Tangible assets are stated at Cost less Accumulated Depreciation,
Impairment loss, if any, ascertained as per the Accounting Standard 28
(Impairment of Assets). Cost comprises the Purchase Price and any such
costs attributable for the purpose of bringing the asset to its working
condition for its intended use.
ii. Tangible Assets under construction, Advances paid towards
acquisition of Tangible Assets and Cost of Assets not ready for use as
at the year end, are disclosed as Capital Work-In Progress.
iii. In respect of Tangible Assets depreciation is provided on Straight
line basis applying the rates specified in schedule XIV of Companies
Act 1956 except Computer.
iv. Tangible Assets below Rs.10000 are fully depreciated in the year of
acquisition.
(c) Investment
Investments of long term-nature are stated at cost, less adjustment for
any diminution, other than temporary, in the value thereof. Current
Investment are stated at lower of cost or market value.
(d) Inventory
1. Finished and Semi-Finished Products produced and purchased by the
company are carried at Cost and net realisable value, whichever is
lower.
2. Work in Progress is carried at lower of cost and net realisable
value.
3. Raw Material is carried at lower of cost and net realisable value.
4. Stores and Spares parts are carried at cost. Necessary provision is
made and expensed in case of identified obsolete and non moving items.
Cost of Inventory is generally ascertained on the "Weighted average''
basis.
Cost Comprises expenditure incurred in the normal course of business in
bringing such inventories to its location and includes, where
applicable, appropriate overheads based on normal level of activity.
Packing Material is considered as finished goods. Consumable stores are
written off in the year of Purchase.
(e) Employee Benefits
Provision for Gratuity, Leave Encashment and bonus has not been made as
none of the employee have completed the minimum qualified period of
services.
(f) Impairment of Assets
At each balance sheet date, the management reviews the carrying amounts
of each cash generating unit to determine whether there is any
indication that those assets were impaired. If any such indication
exits, the recoverable amount of the assets is estimated in order to
determine the extent of impairment loss. Recoverable amount is higher
of an asset''s net selling price and value in use. In assessing value in
use, the estimated future cash flows expected from the continuing use
of the assets and from its disposal are discounted to their present
value using a pre-tax discount rate that reflects the current market
assessments of time value of money and the risks specific to the
assets. Cash flows used to determine value in use are derived from
annual budgets and strategic plans of the cash generating units.
(g) Revenue Recognition
Sale are recognized on when substantial risks and rewards of ownership
in the goods are transferred to the buyer i.e. delivery as per terms of
sale.
(h) Other Income
Interest Income and income from Investments are accounted on accrual
basis.
Dividend Income is recognized when the right to receive dividend is
established.
(i) Foreign Currency Transactions
Transactions in Foreign Currency and Non-Monetary Assets are accounted
for at the Exchange Rate prevailing on the date of the transaction. All
monetary items denominated in Foreign Currency are converted at the
Year-End Exchange Rate. The Exchange Differences arising on such
conversion and on settlement of the transactions are recognized as
income or as expenses in the year in which they arise.
(j) Taxes on Income
Current Income Tax is measured at the amount expected to be paid to the
tax authorities in accordance with the Income Tax Act, 1961.
Deferred Tax is recognized for all the timing differences, subject to
the consideration of prudence in respect of deferred tax assets.
Deferred Tax Assets are recognized and carried forward only to the
extent that there is reasonable certainty that sufficient future
taxable income will be available against which such deferred tax assets
can be realized.
(k) Cash & Cash Equivalent
Cash & Cash Equivalent for the purpose of cash flow statement comprises
of cash at bank and in hand and short term investments/ bank deposits
with an original maturity of three months or less.
(l) Provisions
A Provision is recognized when company has a present obligation as a
result of past events, it is probable that an outflow of resources
embodying economic benefits will be required to settle the obligation
and reliable estimate can be made of the amount of the obligation.
Provisions are not discounted to their present value and are determined
based on the best estimate required to settle the obligation at the
reporting date. These estimates are reviewed at each reporting date and
adjusted to reflect the current best estimates.
(m) Trade Receivables:
In respect of Receivable for Sundry Debtors (Incl. Receivable on Sale
of Investments) of Rs.28.77 Lacs and Other Trade receivable, the amount
of Bad & Doubtful Debts are is not ascertainable on account of non-
receipt of confirmation from the party.
Mar 31, 2011
A) Accounting Convention
The financial statements are prepared under historical cost convention,
on accrual basis, in accordance with the generally accepted accounting
principles in India and to comply with the Accounting Standards
prescribed in the Companies (Accounting Standards) Rules, 2006 issued
by the Central Government in exercise of the power conferred under
sub-section (1) (a) of section 642 and the relevant provisions of the
Companies Act, 1956 ("the Act").
b) Use of Estimates
The preparation of the financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent liabilities on the date of
the financial statements and the results of operations during the
reporting periods. Although these estimates are based upon management's
best knowledge of current events and actions, actual results could
differ from those estimates and revisions, if any, are recognized in
the current and future periods.
c) Fixed Assets & Depreciation.
(i) Fixed assets are stated at cost less accumulated
depreciation/amortization. Cost comprises the purchase price and any
attributable cost of bringing the asset to its working condition for
its intended use.
(ii) Fixed assets under construction, advances paid towards acquisition
of fixed assets and cost of assets not ready for use as at the year
end, are disclosed as capital work-in progress.
(iii) Depreciation on fixed assets is provided on WDV method on pro
rata basis from the date of addition at the rates and in the manner
prescribed in Schedule XIV to the Companies Act, 1956.
d) Investments
Investments classified as long-term investments are stated at cost.
Diminution in the investment has not been worked out and provided.
e) Inventory
Inventory comprises of raw materials, Semi finished and Finished goods
are valued at Cost or net realizable Value, whichever is lower.
Consumable stores are written off in the year of Purchase.
f) Employee Benefits
Provision for gratuity has not been made as none of the employee have
completed the minimum qualified period of services.
g) Claims, Demands and Contingencies
Details of disputed and or contingent liabilities are not available.
h) Provision for Current and Deferred Tax :
i) Tax liability of the company is estimated considering the provision
of Income Tax Act, 1961.
ii) Deferred tax is recognized subject to consideration of prudence, on
timing difference being the difference between taxable incomes and
accounting income that originate in one period, and are capable of
reversal in one or more subsequent period(s). Such deferred tax is
quantified using rates and laws enacted or substantively enacted as at
the end of the financial year.
i) Impairment of Assets
The Company assesses at each balance sheet date whether there is any
indication that an asset 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
cash generating unit to which the asset belongs is less than its
carrying amount, the carrying amount is reduced to its recoverable
amount and the reduction is treated as an impairment loss and is
recognized in the Profit and Loss Account. If at the balance sheet date
there is an indication that a previously assessed impairment loss no
longer exists, the recoverable amount is reassessed and the asset is
reflected at the recoverable amount subject to a maximum of depreciated
historical cost.
j) Revenue Recognition:
Revenue is recognized to the extent that it is probable that the
economics benefits will flow to the company and the revenue can be
reliably measured.
Sale of Goods:
Revenue is recognized when the significant risks and rewards of
ownership of the goods have passed to the buyer. Sales re reported net
of Sales Tax and Excise Duty.
Interest:
Revenue is recognized on a time proportion basis talking into accounts
the amount outstanding and the rate applicable.
k) Foreign currency transactions
Transactions in foreign currency and non-monetary assets are accounted
for at the exchange rate prevailing on the date of the transaction. All
monetary items denominated in foreign currency are converted at the
year-end exchange rate. The exchange differences arising on such
conversion and on settlement of the transactions are recognized as
income or as expenses in the year in which they arise.
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