a) BASIS OF ACCOUNTS
The financial statements are prepared in accordance with the historical
cost convention on accrual basis of accounting and in accordance with
generally accepted accounting practices in India and confirm to the
applicable Accounting standards issued by the Institute of Chartered
Accountants of India and relevant provisions of the Companies Act,
b) FIXED ASSETS
Fixed assets are stated at cost of acquisition, inclusive of inward
freight, duties & taxes and incidental expenses related to acquisition
Raw materials,stores,spares & consumables are valued at cost net of
cenvat credit. Stock in process & finished goods and Traded Goods are
valued at lower of cost or estimated net realisable value. Scrip''s are
valued, scrip wise, at lower of cost or market price.
Long term Investments are stated at cost of acquisition inclusive of
expenditure incidental to acquisition. A provision for diminution is
made to recognise a decline, other than temporary in the value of long
term investment. Current Investments are stated at lower of cost or
fair value determined on an individual basis.
e) MISCELLANEOUS EXPENDITURE
Expenditure in respect of issue of shares, pre-incorporation and other
preliminary expenses, are written-off over a period of 10 years from
the year in which these are incurred.
Depreciation is calculated on fixed assets on Straight line method in
accordance with schedule XIV of the Companies Act,1956 prorata from the
month in which assets are acquired & put to use and in respect of
deductions, upto and including the month in which such deductions are
g) INCOME FROM INVESTMENTS
Income from investments is credited to revenue in the year in which it
h) REVENUE RECOGNITION Revenue is recognised on dispatch of materials
to customers from the plant.
I) CONTINGENT LIABILITIES
Unprovided contingent liabilities are disclosed in the accounts by way
of notes giving nature and quantum of such liabilities.
j) FOREIGN CURRENCY TRANSACTION
Foreign currency transaction are recorded by applying the prevailing
exchange rate on TRANSACTION date. All exchange rate differences are
dealt with in Profit and Loss Account.
k) RETIREMENT BENEFITS
1. Short term benefits are recognised as an expense at the
undiscounted amount in the profit and loss account of the year in which
the related service is rendered.
2. Post employment and other long term employee benefits are
recognised as an expense in the profit and loss account for the year in
which the employee has rendered service. The expense is recognised at
the present value of the amount payable determined on the basis of
calculating the accrual amount it self, as number of employees is very
3. Compensation paid under the company''s Voluntary Retirement scheme
is charged to the profit and loss account in the year of payment.
Tax expense for the period, comprising current tax and deferreed tax,
is included in determining the net profit/(loss) for the year.
The Company provides for deferred tax using the net liability method
based on the tax effect of timing differences resulting from
recognition of items in the financial statements. The deferred tax
charge or credit is recognised using the tax rates and tax laws that
have been enacted or substantially enacted by the balance sheet date.
m) Purchases are net of Cenvat Credit. Sales are net of excise duty &
sales tax.There is no impact on Profit & Loss Account for Duty & Taxes.