1. Basis of accounting: -
These financial statements have been prepared in accordance with the Generally Accepted
Accounting Principles in India (Indian GAAP) including the Accounting Standards notified
under the act.
The presentation of financial statements in conformity with GAAP requires estimates and
assumptions to be made that affect the reported amount of assets and liabilities on the date
of the financial statements and reported amount of revenues and expenses during the
reporting period. Difference between the actual result and estimates are recognized in the
period in which the results are known/materialized.
2. Use of Estimates: -
The preparation of financial statements in conformity with Indian GAAP requires the
management to make judgments, estimates and assumptions that affect the reported
amounts of revenues, expenses, assets and liabilities and the disclosure of contingent
liabilities, at the end of the reporting period. Although these estimates are based on the
management's best knowledge of current events and actions, uncertainty about these
assumptions and estimates could result in the outcomes requiring a material adjustment to
the carrying amounts of assets or liabilities in future periods.
3. Revenue Recognition: -
Expenses and Income considered payable and receivable respectively are accounted for on
accrual basis.
Revenue is recognized on the basis of generally accepted accounting principles in India that
there will be certain economic benefit and amount of such benefit is measured reliably.
4. Property. Plant & Equipment: -
Property, Plant & Equipment including intangible assets are stated at their original cost of
acquisition including taxes, freight and other incidental expenses related to acquisition and
installation of the concerned assets less depreciation till date.
Cost model has been adopted for all class of items of Property Plant and Equipment.
5. Depreciation
Depreciation on Fixed Assets is provided to the extent of depreciable amount on the Written
down Value (WDV) Method/SLM method.
Depreciation on assets acquired/sold during the year is recognized on a pro-rata basis to the
statement of profit and loss till the date of acquisition/sale.
The carrying amount of assets is reviewed at each balance sheet date if there is any
indication of impairment based on internal/external factors. An impairment loss is
recognized wherever the carrying amount of an asset exceeds its recoverable amount. The
recoverable amount is the greater of the assets, net selling price and value in use. In
assessing value in use, the estimated future cash flows are discounted to their present value
using a pre-tax discount rate that reflects current market assessments of the time value of
money and risks specific to the asset.
After impairment, depreciation is provided on the revised carrying amount of the asset over
its remaining useful life.
6. Foreign currency Transactions: -
Transactions arising in foreign currencies during the year are converted at the rates closely
approximating the rates ruling on the transaction dates. Liabilities and receivables in foreign
currency are restated at the year-end exchange rates. All exchange rate differences arising
from conversion in terms of the above are included in the statement of profit and loss.
7. Investments:-
On initial recognition, all investments are measured at cost. The cost comprises purchase
price and directly attributable acquisition charges such as brokerage, fees and duties.
Current investments are carried in the financial statements at lower of cost and fair value
determined on an individual investment basis. Long-term investments are carried at cost.
However, provision for diminutions in value is made to recognize a decline other than
temporary in the value of the investments.
On disposal of an investment, the difference between its carrying amount and net disposal
proceeds is charged or credited to the statement of profit and loss.
8. Inventories:-
Inventories are valued as under: -
9. Borrowing cost: -
Borrowing costs that are attributable to the acquisition or construction of the qualifying
assets are capitalized as part of the cost of such assets. A qualifying assets is one that
necessarily takes a substantial period of time to get ready for its intended uses or sale. All
other borrowing costs are charged to revenue in the year of incurrence. The amount of
borrowing cost capitalized during the year is Nil.
10. Retirement Benefits: -
The retirement benefits are accounted for as and when liability becomes due for payment
and in any other cases where it is being accounted is as per applicable accounting
framework.
11. Taxes on Income: -
The effect of Accounting Standard - 22 relating to accounting for taxes on income issued by
the Institute of Chartered Accountants of India is being considered for determining timing
difference between book and taxable profits under the head ‘Income from Business or
Profession' of the assessee.
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