1. IMPAIREMENT OF ASSETS
The carrying amounts of assets are reviewed at each Balance Sheet date
if there is any indication of impairment based on internal/external
factors. An impairment loss will be recognized wherever the carrying
amount of an asset exceeds its estimated recoverable amount. The
recoverable amount is greater of the assets net selling price and
value in use. In assessing the value in use, the estimated future cash
flows are discounted to the present value using the weighted average
cost of capital.
(a) Long Term Investments made by the Company are carried at cost.
However permanent diminution in value of investments, if any, is
(b) Current investments are carried at lower of cost or market value
determined on individual investment , basis.
Inventories are valued at lower of cost or estimaied net realisable
value. Cost of inventories is computed on FIFO basis. Work inprogress
includes cost of material (net of available Cenvat credit and other set
offs), labour and factory overheads, finished product also includes
excise duty on product manufactured.
4. REVENUE RECOGNITION
(a) A sale is recognised on dispatch to customers and includes excise
duty charged to customers. Sales are stated exclusive of Sales tax/M
(b) Revenue from services-is recognised on completion of the services
and is stated exclusive of service tax.
(c) Dividend income is recognised when the right to receive the
dividend is established.
(d) Interest income is recognised on the time proportion basis.
5. COST OF PURCHASE
Cost of raw material, bought out components, outside processing
charges, stores and spares, consumables purchased is accounted for in
the books of accounts net of available Cenvat credit and other set
6. EMPLOYEE BENEFITS
(a) Benefit in the form of Provident Fund and Pension Schemes whether
in pursuance of law or otherwise which are defined contribution is
accounted on actual basis and charged to Profit & Loss account.
(b) Payment for present liability of future payment of gratuity is
being made to approved gratuity fund, which fully covers the same under
cash accumulation policy of the Life Insurance Corporation of India.
The employees gratuity is a defined benefit funded plan. The present
value of the obligation under such defined benefit plan is determined
based on the actuarial valuation using the Projected Unit Credit Method
as at the date of Balance Sheet and the short fall in the fair value of
the Plan Assets is recognized as an obligation.
(c) Defined Contribution to Life Insurance Corporation of India for
employees covered under Superannuation Scheme are accounted at the rate
of 13% of such employees annual salary.
(d) Payment for present liability of future payment of Privilege Leave
Benefits is being made to Group Leave Encashment Fund, which fully
covers the same under cash accumulation policy of the Life Insurance
Corporation of India. The present value of the obligation under such
defined plan is determined based on the actuarial valuation using the
Projected Unit Credit Method as at the date of Balance Sheet.
7. RESEARCH AND DEVELOPMENT
Expenditure on research and development and patents are charged to
Profit and Loss account in the year in which they are incurred except
in case of development of new products undertaken where the same are
deferred & expensed out over a reasonable period for which the benefit
is received / expected to receive after commercial viability of the
products. Depreciation on assets used specifically for development
purposes is charged at the rates applicable to similar class of assets.
8. FOREIGN CURRENCY TRANSACTIONS -
(a) Foreign currency transaction relating to purchase and sale of goods
and services are recorded at the exchange rates prevailing at the time
of transaction and adjusted to the rates prevailing at the time of
settlement of the transaction during the accounting year and are
recognized in Profit and Loss account.
(b) Current assets and Current liabilities remaining unsettled at the
close of the accounting period are converted at the year-end exchange
(c) In respect of fixed assets acquired out of foreign currency loans,
the corresponding loan liabilities are restated at the rate prevailing
at the year end or at rates covered by forward contracts (where
applicable) and resultant differences are adjusted to the cost of fixed
(d) Whenever foreign currency loan is availed by the company for
working capital requirement, the difference between the forward rate
and the exchange rate at the date of the transaction is recognized as
income or expense over the life of the contract and recognized in the
relevant Profit and Loss account.
9. DEFERRED REVENUE EXPENDITURE
Deferred Revenue expenditures are amortised proportionately over a
period of five / six years.
10. CONTINGENCIES AND EVENTS OCCURRING AFTER BALANCE SHEET
Accounting for contingencies (gains and losses) arising out of
contractual obligations are made only on the basis of mutual
Events occurring after the date of Balance Sheet are considered upto
the date of adoption of the accounts, where material.
(a) Provision for Income Tax is made on the basis of the estimated
taxable income for the current accounting year in accordance with the
Income Tax Act, 1961.
(b) The deferred tax for timing differences between the book and tax
profits for the year is accounted for using the tax rates and laws that
have been enacted or substantively enacted as of the Balance Sheet
(c) Deferred tax assets arising from timing differences are recognized
to the extent there is reasonable certainty that these would be
realised in future.
12. Related Party
Disclosure in term of Accounting Standard 18 on RELATED PARTY
DISCLOSUREfor the year 2010-2011 is asperANNEXURE-1
13. Segmental Reporting
Disclosure in term of Accounting Standard 17 on SEGMENTAL
REPORTINGfor the year 2010-2011 is as perANNEXURE-2
14 The figures of previous year has been regrouped/rearranged where
necessary to make them comparable with those of the current year.