a) These accounts have been prepared on the historical cost basis & on
the principles of going concern.
b) The accounts are maintained in accordance with the
generalljt,accepted Accounting principle and in compliance of
provisions of the Companies Act, 1956 except otherwise stated.
Sales comprise sale of goods net of return and does not include duties
iii) Fixed Assets :
a) Gross block of fixed assets are stated at cost.
b) Depreciation: .
Depreciation is provided under the straight line method at the rates
provided by schedule - XIV to the Companies Act, 1956. No depreciation
has been provided on Fixed Assets of chemical division as the Assets
has not been used during the year.
Inventories are valued at cost or net realisable value whichever is
lower. Cost has been determined on Weighted average method.
Long Terms Investments are being valued at cost, Provision is made for
loss only if there is permanent diminution in the value of investment
in the opinion of the management.
vi) Deferred Taxation:
Income Tax expense comprises current tax and deferred tax charge or
release. The deferred tax charge or credit is ;recognised using current
tax rates. Deferred tax assets arising from unabsorbed depreciation 6r
carry forward losses are recognised only if there is virtual certainty
of realisation of such amounts. Other deferred tax assets are
recognised only to the extent there is reasonable certainty of
realisation in future. Such assets are reviewed at each Balance Sheet
date to reassess the realisation.
vii) Research & Development Expenditure
Research & ^Development expenditure reduced by grant received has been
amortised over a period of 5 years.
viii) Contingent Liability
These are disclosed by way of notes to the Accounts provision is made
in respect of those liabilities, which are likely to materialize after
the year and till the finalisation of Accounts have material effect on
the position stated in the Balance Sheet.
ix) Excise duty
Excise duty has been accounted on the basis of both payments made in
respect of goods cleared as also provision made for good lying in
bonded warehouses and cleared goods and the same has been treated as
part of the cost of respective stock as per the revised guidance note
on accounting treatment For Excise duty issued by the Institute of
Chartered Accountants of India. Amount of excise duty shown as
deduction from sales in the total Excise duty for the year except the
duty related to difference between closing stock and opening stock.
Excise duty related to the difference between closing stock and opening
stock is recognized separately in the Profit And Loss A/c.
x) Impairment of Assets
An asset is treated as impaired, when carrying cost of assets exceeds
its recoverable amount. An impairment loss is charged to the Profit and
Loss Account in the year in which an asset is identified as impaired.
The impairment loss recognized in prior accounting periods is reversed
if there has been a change in the estimate of the recoverable amount.
xi) Foreign Currency Transactions
i) Transactions denominated in foreign currencies are recorded at the
rates of exchange in force at the time transaction are affected.
Transactions denominated in foreign currencies at the year end and not
covered by forward exchange contracts are translated at year end rates
and those covered by forward exchange contracts are translated at the
rate ruling at the date of transaction as increased or decreased by the
proportionate difference between the forward rate and the exchange rate
on the date of transaction, such difference having been recognized over
the life of the contract.
ii) Any income or expense on account of exchange difference either on
settlement or on translation is recognized in the profit and loss.
xii) Employee Benefits
i) Short-term employee benefits are recognized as an expense at the
undiscounted amount in the Profit andlLoss Account of the year in which
the related service is rendered.
ii) Post employment and other long term employee benefits are
recognized as an expense in the profit and loss account for the year in
which the employee has rendered services. The expense is recognized on
xiii) Borrowing Cost ;
Borrowing cost thlat are directly attributable to the acquisition or
construction of qualifying assets are capitalized asjpartjof the cost
of such assets. A qualifying asset is one that necessarily takes
substantial period of time to g^et ready for intended use. All other
borrowing cost are charged to revenue.