(a) SYSTEM OF ACCOUNTING :
Financial Statements are prepared under historical cost convention, on
accrual basis of accounting and in accordance with the provision of
Companies Act, 1956 and also complies with Accounting Standards issued
by the Institute of Chartered Accountants of India to the extent
(b) FIXED ASSETS :
Fixed Assets are capitalised at cost inclusive of Inward Freight,
Duties, Taxes and Installation expenses. The Companys Fixed Assets
comprise of block of assets as defined under the Income- tax Act, 1961
and are classified based on the percentage of depreciation. Upon
transfer of fixed assets falling within the particular block of assets,
sale consideration is removed from the said block of assets. When
particular block of assets cease to exist either due to sale of entire
assets comprising in the particular block or otherwise, any excess or
deficiency in the said block is transferred to Profit & Loss Account.
As per Accounting Standard 28 on Impairment of assets, where the
carrying amount of fixed assets exceeds the recoverable amount on the
reporting date, the carrying amount is reduced to the recoverable
amount. The recoverable amount is measured as the higher of net selling
price and the value in use determined by the present value of estimated
future cash flow.
Inventories are valued at cost or net realisable value whichever is
less. Inventories are valued on FIFO basis
Company is providing for the depreciation on the block of assets at the
rate specified under the Income Tax Act. Depreciation on the asset
acquired during the year is charged for the entire year if used for
more than 180 days and 50% of the depreciation is charged during the
year if asset acquired is used for less than 180 days. No depreciation
has been charged on assets sold during the year.
(e) Retirement Benefits :
(i) Short term employee benefits are recognised as an expense at the
undiscounted amount in the Profit & Loss Account of the year in which
the related service is rendered.
(ii) Contribution payable to recognized provident fund which is defined
contribution scheme is charged to Profit & Loss Account. Gratuity
which si defined benefit is accrued based on actuarial valuation as at
Balance Sheet date by an independent actuary. The company contributes
annually to recognized Employees Gratuity Trust Fund and the
contribution is charged to the Profit & Loss Account each year.
The Company extends the benefit of leave encashment to all its
employees while in service as well as on retirement. Consequently
provision of leave is made based on presumption of encashment of
accumulated leave as on the balance sheet date.
(f) WARRANTY CLAIMS
Warranty claims for the batteries sold are accounted as and when lodged
with the company .
(g) REVENUE RECOGNITION POLICY :
(i) Sale of Exide Batteries are accounted at the time of despatch.
(ii) Interest, dividend etc. are accounted as and when the right to
receive the same is established.
(iii) Service income is recognised as and when services are rendered.
(h) FOREIGN CURRENCY TRANSACTIONS :
The transactions in foreign exchange are accounted at the exchange rate
of prevailing on the date of transactions. The transactions which
remained unsettled on the Balance Sheet date are recorded at the
closing rate prevailing on that date. All gains or losses on foreign
exchange transactions other than those related to fixed assets are
recognised in the Profit & Loss Account.
(i) ACCOUNTING FOR TAXES ON INCOME
Provision for current tax is made after taking into consideration
benefit admissible under the provision of the Income Tax Act. Deferred
tax resulting from timing difference between the book and taxable
profit is accounted for using the Tax rate and laws that have been
enacted or substantively enacted as on Balance Sheet date. The deferred
tax asset is recognized and carried forward only to the extent that
there is a reasonable / virtual certainty that assets will be realized
Long term Investments are stated at cost. In case of long term
investments, provision / write down is made for permanent diminution in
value. Current assets are valued at lower of cost or fair market value.