The accounts are prepared on accrual basis under the historical cost
convention and in accordance with the accounting standards specified
under sub section (3c) of section 211 of the Companies Act, 1956.
1.2 Fixed Assets:
a. Fixed assets are stated at cost less accumulated depreciation. Cost
of acquisition of fixed assets is net of CENVAT / Input VAT Credit and
inclusive of freight, duties, taxes, incidental expenses including
interest on specific borrowings as allotted.
b. Expenditure during construction/erection period is included under
Capital Work-in-Progress and allocated to the respective fixed assets
on completion of construction/erection.
Investments are stated at cost, inclusive of all expenses relating to
acquisition. Provision for diminution in the market value of long-term
investments is made, if in the opinion of the Management such
diminution is permanent in nature.
Inventories are valued at the lower of the cost (net of CENVAT / Input
VAT Credit) or net realisable value (except scrap / waste which are
valued at estimated realisable value). Cost is computed on monthly
weighted average basis. Finished Goods and Process Stock include cost
of conversion and other costs incurred in bringing the inventories to
their present location and condition.
1.5 Borrowing Costs:
Borrowing cost is charged to statement of Profit and Loss except cost
of specific borrowing for acquisition of qualifying assets which is
capitalised till date of commercial use of the said asset.
Sales are inclusive of Excise Duty and net of rebates and Sales Tax.
1.7 Employee Benefits:
(i) Defined Contribution Plans:
Employee Benefits in the form of Employee Provident Pension Funds are
considered as Defined Contribution plans and the contributions are
charged to the statement of Profit & Loss of the year when the
contributions to the said fund are due.
(ii) Defined Benefit Plans:
Retirement Benefit in the form of Gratuity is considered as Defined
Benefit Obligation and is provided for on the basis of an actuarial
valuation using the projected unit credit method as at the date of
(iii) Other Long Term Benefits:
Long-Term Compensated Absences are provided on the basis of an
actuarial valuation using the Projected Unit Credit Method as at the
date of Balance Sheet.
Actuarial gains / losses, if any, are immediately recognised in the
statement of Profit & Loss.
Depreciation on buildings and plant and machinery is charged under
straight-line method and on the remaining assets under written down
value method at the rates specified in Schedule XIV of the Companies
1.9 Foreign Currency Transactions:
Transactions on account of foreign currency are accounted for at the
rates prevailing on the date of the transaction. Foreign Currency
assets and liabilities are restated at the rates prevailing as on the
date of Balance Sheet. Exchange rate differences are dealt with in the
statement of Profit and Loss. Premium or discount on forward exchange
contracts are amortised and recognised in the statement of Profit &
Loss over the period of the contract.