| 1. Basis of preparation
The financial statements of the company have been prepared in
accordance with generally accepted accounting principles in India
(Indian GAAP). The company has prepared these financial statements to
comply in all material respects with the applicable accounting
standards notified under the Companies (Accounting Standards) Rules,
2006, (as amended) and the relevant provisions of the Companies Act,
1956. The financial statements have been prepared on an accrual basis
and under the historical cost convention.
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. Tangible fixed assets and depreciation
Fixed assets are stated at cost, less accumulated depreciation and
impairment losses, if any. Cost comprises the purchase price and any
attributable cost of bringing the asset to its working condition for
its intended use.
Depreciation is provided using Straight Line Method at the rates
estimated by the Management which coincides with the rates prescribed
under Schedule XIV of the Companies Act, 1956.
4. Impairment
The carrying amounts of assets are reviewed at each balance sheet date
to see 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.
5. Borrowing costs
Borrowing cost includes interest, amortization of ancillary costs
incurred in connection with the of borrowings and exchange differences
arising from foreign currency borrowings to the extent they are
regarded as an adjustment to the interest cost.
Borrowing costs directly attributable to the acquisition, construction
or production of an asset that necessarily takes a substantial period
of time to get ready for its intended use or sale are capitalized as
part of the cost of the respective asset. All other borrowing costs are
expensed in the period they occur.
Notes forming part of the financial statement for the year ended March
31,2014
6. Investments
Investments, which are readily realizable and intended to be held for
not more than one year from the date on which such investments are
made, are classified as current investments. All other investments are
classified as long-term investments.
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
diminution in value is made to recognize a decline other than temporary
in the value of the investments.
7. Revenue recognition
Revenue is recognized to the extent that it is probable that the
economic benefits will flow to the company and the revenue can be
reliably measured. The following specific recognition criteria must
also be met before revenue is recognized:
(i) Revenue from sale of goods
Sales are recognized net of returns and trade discounts, on transfer of
significant risks and rewards of ownership to the buyer, which
generally coincides with the delivery of goods to customers.
(ii) Interest
Interest income is recognized on a time proportion basis taking into
account the amount outstanding and the applicable interest rate.
Interest income is included under the head "other income" in the
statement of profit and loss.
(iii) Dividends
Dividend income is recognized when the company's right to receive
dividend is established by the reporting date.
8. Inventory Valuation
Inventories are valued at the lower of cost and the net realizable
value after providing for obsolescence and other losses, where
considered necessary. Cost includes all charges in bringing the goods
to the point of sale, including octroi and other levies, transit
insurance and receiving charges. Work-in-progress and finished goods
include appropriate proportion of overheads and, where applicable,
excise duty.
9. Foreign currency translation
(i) Initial recognition
Foreign currency transactions are recorded in the reporting currency,
by applying the exchange rate between the reporting currency and the
foreign currency at the date of the transaction.
(ii) Conversion
Foreign currency monetary items are reported using the closing rate.
Non-monetary items which are carried in terms of historical cost
denominated in a foreign currency are reported using the exchange rate
at the date of the transaction; and non-monetary items which are
carried at fair value or other similar valuation denominated in a
foreign currency are reported using the exchange rates that existed
when the values were determined.
(iii) Exchange differences
Exchange differences arising on the settlement of monetary items or on
reporting Company's monetary items at rates different from those at
which they were initially recorded during the year, or reported in
previous financial statements, are recognized as income or as expenses
in the year in which they arise.
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