a. Basis of Accounting
The financial statements are prepared under the historical cost
convention, on accrual basis and in accordance with the generally
accepted accounting principles in India (GAAP), the Accounting
Standards (AS) issued by the Institute of Chartered Accountants of
India and the applicable relevant provisions of the Companies Act,
1956. The financial statements are presented in Indian Rupees rounded
off to the nearest thousand.
b. Revenue Recognition
Income from sale of goods is recognized upon transfer of significant
risk and reward of ownership of the goods to the customer which
generally coincides with delivery and acceptance of the goods sold.
Interest income is recognized on accrual basis.
c. Fixed Assets
All fixed assets are stated at cost of acquisition, less accumulated
depreciation. In the case of fixed assets acquired for new projects /
expansion, interest cost on borrowings and other related expenses up to
the date of commercial production incurred towards acquiring fixed
assets are capitalized.
Depreciation on fixed assets is provided as per the straight line
method at the rates and in the manner specified in Schedule XIV of the
Companies Act, 1956. Depreciation on additions / deletions of assets
during the year is provided on a pro-rata basis.
e. Retirement Benefits
Retirement benefit in the form of contribution to Provident Fund is
charged to the Profit and Loss Account of the period when the
contributions to the respective funds are due.
The company has gratuity scheme with Life Insurance Corporation of
India. The premium thereof is paid in terms of the policy and charged
to Profit and Loss Account. Leave encashment and other benefit are
provided on the basis of actuarial valuation at the year end.
Raw Materials, Stores, Spares, Consumables, Packing Material and
Work-in-Progress are valued at cost. Cost is ascertained on weighted
average basis. WIP is valued at direct cost plus allocated overheads at
appropriate stages. Finished Goods are valued at lower of cost or net
realizable value. In accordance with Accounting Standard 2 issued by
the Institute of Chartered Accountants of India, provision is made for
excise duty on closing stock of finished goods.
g. Impairment of Assets
The Company evaluates all its assets for assessing any impairment and
accordingly recognizes the impairment, wherever applicable, as provided
in Accounting Standard 28, Impairment of Assets.
h. Taxes on Income
Provision for current tax is made, at the current rate of tax, based on
assessable income computed on the basis of relevant tax rates and tax
laws. Deferred tax resulting from timing differences between the book
Profits and the tax Profits is accounted to the extent that the
timing differences are expected to crystallize. Deferred tax assets are
not recognized unless there is sufficient assurance with respect to
reversal of the same in the future.
i. Contingent Liabilities and Provisions
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is probable that there will be an outfl ow of resources.
Contingent Liabilities are not recognized but are disclosed in the
Notes. Contingent Assets are neither recognized nor disclosed in the fi
nancial statements. Provisions, Contingent Liabilities and Contingent
Assets are reviewed at each balance sheet date.
j. Foreign Currency Transactions
Transactions denominated in foreign currencies are recorded at the
exchange rate prevailing on the date of transaction. Monetary items
denominated in foreign currencies, if any at year end are restated at
the year end rate. Any gain or loss on account of exchange difference
either on settlement or on translation is recognized in the Profit &