(i) BASIS OF ACCOUNTING
Financial statements are prepared under the historical cost convention
and as a going concern and in accordance with the normally accepted
(ii) FIXED ASSETS
a. Tangible Assets :
Fixed assets are stated at cost net of Cenvat Credit, less accumulated
depreciation. Cost is inclusive of freight, duties, taxes and all
directly attributable costs of bringing the assets to their working
condition for its intended use.
b. Intangible Assets :
Trade Mark and Designs : Costs relating to Trade Marks and Designs
which are acquired are capitalised and amortised on a straight line
basis over a period of 5 years.
(iii) EXPENDITURE DURING CONSTRUCTION PERIOD
Expenditure incurred during the construction period is included under
capital Work-in-progress and will be capitalised when ready for
(iv) BORROWING COSTS
Borrowing costs that are attributable to construction of qualifying
assets are capitalised as part of cost of such assets till such time
the asset is ready for its intended use. A qualifying asset is an asset
that requires a substantial period of time to get ready for its
intended use. All other borrowing costs are recognized as expenses in
the period in which they are incurred.
Depreciation is provided on straight-line basis at the rates specified
in Schedule XIV of the Companies Act, 1956,onpro rata basis.
(a) Finished goods are valued at cost or market price whichever is
less. Cost includes appropriate share of related overheads and excise
duty payable on such goods.
(b) Stocks of raw- materials, stores, spare parts, material-in-transit
etc., are valued at First-in- First out (FIFO) method. Cost includes
expenses of procurement, excise and other duties net of Cenvat Credit.
Turnover includes Sale of Goods, Conversion Charges, Excise duty and
Value added tax net of Trade Discounts.
Investments are long term and valued at cost. Permanent diminution in
value will be recognised in the profit and loss account. Income from
Investments is recognised in the year in which it accrues andatgross
Excise duty has been accounted on the basis of both payments made in
respect of goods cleared as also provision made for goods lying as
Contribution to defined contribution schemes such as provident fund and
family pension fund is charged to Profit & Loss Account as incurred. In
respect of gratuity, no provision has been made in the accounts for the
actuarially ascertained liability for future payment of gratuity.
Gratuity payments are charged to profit and loss account in the year in
which payments are made.
(xi) FOREIGN CURRENCY TRANSACTIONS
(a) Transactions denominated in foreign currencies are normally
recorded at the exchange rate prevailing at the time of the
(b) The monetary items denominated in foreign currencies at the year-end
are translated at the year-end rates.
(c) Any income or expense on account of exchange difference either on
settlement or on translation is recognized in the Profit and
Income Tax is computed in accordance with Accounting Standard – 22
(AS-22) issued by the Institute of Chartered Accountants of India. Tax
expenses are accrued in the same period as the revenue and
expenses to which they relate.
a) Provision for current income tax is made on the tax liability
payable on taxable income after considering tax allowances, deductions
and exemptions determined in accordance with the prevailing tax laws.
The difference between taxable income and the net profit or loss before
tax for the year, as per the financial statements, are identified and
the tax effect of the deferred tax asset or deferred tax liability is
recorded for timing differences, i.e. differences that originate in one
accounting period and reverse in another.
(xiii) IMPAIRMENT OF ASSETS
Impairment is as curtained at each balance sheet date in respect of the
Company''s fixed assets. An impairment loss is recognized whenever the
carrying amount of an asset exceeds its recoverable amount. The
recoverable amount is the greater of the net selling price and value in
use. In assessing the value in use, the estimated future cash flows are
discounted to their present value based on an appropriate discount
(xiv) ACCOUNTING FOR PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT
Provisions are recognized in terms of Accounting Standard
29-''Provisions,Contingent Liabilities and Contingent assets''(AS-29),
issued by the ICAI, when there is a present legal or statutory
obligation as a result of past events.
Contingent liabilities are recognized only when there is a possible
obligation arising from past events due to occurrence or non-occurrence
of one or more uncertain future events not wholly within the control of
the Company or where any present obligation cannot be measured in terms
of future outflow of resources or where a reliable estimate of the
obligation cannot be made. Obligations are assessed on a non going
basis and only those having a largely probable outflow of resources are