(i) Revenue Recognition
All income and expenditure items having a material bearing on the
financial statements are recognized on accrual basis.
(ii) Fixed Assets
Fixed Assets are stated at cost of acquisition (Net of Modvat)
inclusive of expenses relating to acquisition.
(iii) Amortization and Depreciation
Depreciation on Fixed Assets is provided on straight line method at the
rates prescribed in Schedule XIV of the Companies Act, 1956 as amended
vide Notification No.GSR 756(E) dated 16.12.1993 issued by the Ministry
of Law, Justice and Company Affairs, Department of Company Affairs.
(iv) Retirement Benefits
(a) Provision for gratuity is made as per the provision of payment of
gratuity act, as calculated by the management.
(b) Liabilities in respect of encashment of accumulated leaves by the
employees is estimated by the management and charged to Profit & Loss
(c) As ascertained by the Company , the premium pertaining to provision
for superannuation fund has been paid to LIC & the amount appears in
superannuation Fund account has no longer liability against the assets
of the company.
(v) Provisions, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement
are recognized when there is present obligation as a result of past
events and it is possible that there will be an outflow of resources.
Contingent Liabilities are not recognized in the financial statements
but are disclosed in the notes to accounts. Contingent Assets are
neither recognized and nor disclosed in financial statements.
(vi) Foreign Currency Transactions
(a) Transactions denominated in foreign currency are intially recorded
at the exchange rate prevailing at the time of transaction. Current
Assets and Current liablities denominated in Foreign Currency are
converted into Indian rupees at the exchange rate prevailing at the
close of the year.
(b) Any income or loss on account of exchange fluctuation on settlement
/ year end, is recognised in the profit & loss account except in cases
where they relate to acquisition of fixed assets in which case they are
adjusted to the carrying cost of such asset ae per guidelines and AS-11
issued by Institute of Chartered Accountants of India.
(vii) Excise Duty
Excise Duty, Service Tax And VAT on inputs and services are carried
forward till it is utilized. Further Excise duty is accounted for on
the basis of both payment made in respect of goods cleared as also
provision made for goods lying in bonded warehouse.
(viii) Taxes on Income
(a) Provision for Income Tax is made at the amount expected to be paid
to the Tax Authorities in accordance with the Income Tax Act, 1961
using the tax rates as per the Tax Law that have been enacted or
substantively enacted as on the date of the Balance Sheet.
(b) Deferred Tax Assets and Liabilities are recognized on timing
differences, being the difference between taxable income and accounting
income that originate in one period and are capable of reversal in one
or more subsequent periods in accordance with the Accounting Standard
22 Accounting for Taxes on Income, issued by the Institute of
Chartered Accountants of India. Deferred Tax Assets and Liabilities are
recognised using the tax rates as per the Tax Law that have been
enacted or substantively enacted as on the date of the Balance Sheet.
(ix) Cash Flow Statement
Cash flows are made using the indirect method, whereby profit before
tax is adjusted for the effects of transactions of a non cash nature
and any deferrals or accruals of past or future cash receipts or
payments. The cash flows from Opearting Activities, Financing
Activities and Investing Activities are segregated.
(x) Impairment Of Assets
Fixed Assets are assesed annually on the balance sheet date havings
regards to the internal & external source of information so as to
analyze whether any impairment of the asset has taken place. If the
recoverable amount, represented by the higher of Net Selling Price or
the Value in use, is lesser than carrying amount of Cash-generating
unit, then the difference is recognized as Impairment Loss and is
debited to Profit and Loss Account. Further Suitable reversals are made
in the books of accounts as and when the impairment loss ceases to
exist or shows a decrease.
(xi) Miscellaneous Expenditure
Miscellaneous expenditure represents R & D deffered revenue expenditure
and are written off over a period of 10 years.
Borrowing cost that are directly attributable to acquisition or
construction of qualifying assets has been capitalized as part of such
asset as per AS-16 on Borrowing Costs issued by the ICAI. All other
borrowing cost are charged to revenue in the period when they are
Earning Per Share
EPS is calculated by dividing the net profit for the year attributable
to equity shareholders by the weighted average no. of equity shares
outstanding during the year as per AS-20 issued by the ICAI.
INVENTORIES Basis of Valuation
Raw Material At cost, based on first in first out method, or net
realisable value which ever is lower.
Work in progress At cost or net realisable value whichever is lower
Finished Goods At cost or net realisable value whichever is lower