1. Method of Accounting:
a) The financial statements are prepared under the historical cost
convention as a going concern and on accrual basis in accordance with
Generally Accepted Accounting Principles in India, the Accounting
Standards notified under the Companies Act, 1956 and the relevant
provisions of the said Act.
b) All assets & liabilities have been classified as current &
non-current as per the Company''s normal operating cycle and other
criteria set out in the Schedule VI of the Companies Act, 1956. Based
on the nature of activities undertaken by the Company and their
realization in cash and cash equivalents, the company has ascertained
its operating cycle as 12 months for the purpose of current -
non-current classification of assets& liabilities.
2. FIXED ASSETS: -
a) All Fixed assets are carried at cost less depreciation. The cost
comprises of acquisition cost and any attributable cost of bringing the
asset to the condition for its intended use.
b) Depreciation on the assets is calculated on straight- line method at
the rates and in the manner prescribed in schedule XIV to the Companies
c) Individual assets acquired for less than Rs.5,000 are entirely
depreciated in the year of acquisition. Depreciation is charged on
pro-rata basis for the assets purchased during the year
d) Carrying amount of cash generating units/assets are reviewed at
balance sheet date to determine whether there is any impairment. If any
such indication exists the recoverable amount is estimated as the
higher of net realisable price and value in use. Impairment loss, if
any, is recognised whenever carrying amount exceeds the recoverable
3. INTANGIBLE ASSETS: -
All Intangible Assets are measured at cost and amortized so as to
reflect the pattern in which the assets economic benefits are consumed.
Brands are amortized over the estimated period of benefit, not
exceeding five years. Software capitalised is amortised over useful
life of three to five years equally commencing from the year in which,
the software is installed.
Long term investments are stated at cost. Provision, if any, is made
for permanent diminution in the value of investments. Current
investments are stated at cost or fair value whichever is lower.
Raw materials, stores and spares are valued at cost (net of CENVAT and
VAT set-off), determined on FIFO basis.
Work in process and finished goods are valued at lower of cost and net
realisable value. Cost is determined on the basis of direct cost
comprising raw material, direct labour and an appropriate portion of
direct production overheads.
6. FOREIGN CURRENCYTRANSACTION: -
a) Transactions in foreign currencies are recorded at the exchange
rates prevailing on the date of transaction. Foreign currency monetary
assets and liabilities are translated at year-end exchange rates.
Exchange difference arising on settlement of transactions and
translation of monetary items are recognised as income or expense in
the year in which they arise.
b) In respect of forward exchange contracts the difference between the
forward rate and the exchange rate at the inception of the contract is
recognised as income or expense over the period of the contract.
c) Gains or losses on cancellation / settlement of forward exchange
contracts are recognised as income or expense.
7. REVENUE RECOGNITION: -
a) Sale of products and services are recognized when the products are
shipped or services rendered. Income from job work is recognised on
completion and is included in sales.
b) Income in respect of overdue interest, insurance claims, export
benefits etc is recognised to the extent the company is reasonably
certain of its ultimate realisation.
a) Lease income on an operating lease is recognized in the statement of
profit and loss on a straight-line basis over the lease period.
9. EMPLOYEE BENEFITS: -
a) Short Term Employee benefits:
All short term employee benefit plans such as salaries, wages, bonus,
special awards and medical benefits which fall due within 12 months of
the period in which the employee renders the related services which
entitles him to avail such benefits are recognised on an undiscounted
basis and charged to the profit & loss account.
b) Defined contribution Plan:
The Company has a statutory scheme of Provident Fund with the Regional
Provident Fund Commissioner and contributions of the company are
charged to the profit & loss account on accrual basis.
c) Defined benefit Plan:
The Company''s liability towards gratuity to its employees is covered by
a group gratuity policy with an insurance company. The contribution
paid /payable to insurance company is debited to Profit & Loss Account
on accrual basis. Liability towards gratuity is provided on the basis
of an actuarial valuation using the Projected Unit Credit method and
debited to Profit & Loss Account on accrual basis. Charge to the Profit
and Loss Account includes premium paid, current service cost, interest
cost, expected return on plan assets and gain/loss in actuarial
valuation during the year net of fund value of plan asset as on the
balance sheet date.
10. BORROWING COSTS :-
Borrowing costs that are attributable to the acquisition, construction
or production of a qualifying asset are capitalised as part of cost of
such asset till such time as the asset is ready for its intended use. A
qualifying asset is an asset that necessarily requires a substantial
period of time to get ready for its intended use. All other borrowing
costs are recognised as an expense in the period in which they are
11. TAXES ON INCOME:-
Current tax is determined as the amount of tax payable in respect of
taxable income for the year. Deferred tax is recognised, subject to
consideration of prudence, on timing difference, being the difference
between taxable incomes and accounting income that originate in one
period and are capable of reversal in one or more year. Deferred tax
assets arising on account of unabsorbed depreciation or carry forward
of tax losses are recognized only to the extent that there is virtual
certainty supported by convincing evidence that sufficient future tax
income will be available against which such deferred tax assets can be
12. CONTINGENT LIABILITIES:-
Contingent liabilities with possible present obligation are disclosed
under Notes to Accounts. Contingent liabilities with probable present
obligation are provided based on the current estimates.