1. ACCOUNTING SYSTEM / REVENUE RECOGNITION:
a) Financial statements are prepared as a going concern on accrual
basis under Historical cost convention and in accordance with the
generally accepted accounting principles.
b) All expenses and income to the extent ascertainable with reasonable
certainly are accounted for on accrual basis.
c) Interest on overdue debts/insurance and other claims to the extent
considered recoverable are accounted in the year of claims. However,
claims whose recovery cannot be ascertained with reasonable certainty
are accounted on acceptance/ receipt basis.
d) The presentation of financial statements in conformity with
generally accepted accounting principles (GAAP) requires management to
make estimates and assumptions that affects the reported amounts of
assets and liabilities, and the disclosures of contingent liabilities
on the date of the financial statements. Actual results could differ
from those estimates. Any revision to accounting estimates is
recognized prospectively in the current and future periods.
e) Sales exclude trade discounts, rejections and breakages.
2. FIXED ASSETS:
Fixed Assets are stated at cost less depreciation. All major
modifications/additions including expenses, interest during
construction period to fixed assets, which result in increasing the
operational efficiency of the assets, are capitalized.
A fixed asset is treated as impaired when the carrying cost of asset
exceeds its recoverable value. An impairment loss is charged to the
Profit & Loss Account in the year in which an asset is identified as
impaired. If at the balance sheet date there is any indication that a
previously assessed impairment loss no longer exists, then such loss is
reversed and the asset is restated to that effect.
Expenditure during construction period is included under Capital Work
In Progress and the same is allocated to the respective Fixed Asset on
the completion of its construction.
(a) Depreciation on Building, Plant & Machinery including furnace,
electrical installation and water system during the period is provided
on Straight Line Method (SLM) at the rates specified in Schedule XIV of
the Companies Act, 1956 from the date of assets put to commercial use.
(b) Depreciation on other assets is provided on Written Down Value
Method (WDV) at the rates specified in Schedule XIV of the Companies
(c) Each Individual Fixed Assets costing below Rs.5000 are fully
depreciated in the year of acquisition.
Raw materials, packing materials and fuel are valued at cost determined
on weighted average basis. Stores and spare parts are valued at cost.
Loose tools and Moulds are valued at residual value. Finished goods are
valued at lower of cost or market value. Stock-in-process i.e. molten
glass is valued at cost.
All investments are of long term nature and are valued at cost.
6. RETIREMENT BENEFITS:
i. Provident Fund and Pension Fund: Contribution to Provident Fund and
Pension Fund as per the requirements of the applicable laws are charged
to revenue in the period they are incurred.
ii. Gratuity: Gratuity payable to Employees is accounted on accrual
iii. Leave Encashment: Leave Encashment is accounted for on cash basis.
7. FOREIGN CURRENCY TRANSACTIONS:
Transactions in foreign currencies are recorded at the exchange rate
prevailing on the date of transaction. Current Assets and Current
Liabilities are reinstated at period-end exchange rates and the
profit/loss so determined and the realized exchange gains and losses
are recognized in the profit and loss account.
8. BORROWING COSTS:
Interest and other cost in connection with the borrowing of the funds
to the extent related / attributed to the acquisition / construction of
qualifying fixed assets are capitalized up to the date when such assets
are ready for its intended use and other borrowing costs are charged to
9. LEASE / HIRE PURCHASE TRANSACTIONS:
The actual cost of the assets acquired under the hire purchase
transactions is capitalized while the annual finance charges are
charged to revenue accounts. In respect of assets taken on lease, the
value thereof is not capitalized but contracted lease rental are
charged to revenue accounts on accrual basis.
Provision for current tax are determined in accordance with the Income
Tax Act, 1961. The Deferred Tax for timing differences between the book
and tax profits for the period is accounted for, using the tax rates
and laws that have been substantively enacted as of the Balance Sheet
Deferred tax assets are recognized only to the extent there is
reasonable certainty that the assets can be realized in future,
however, where there is unabsorbed depreciation or carry forward loss
under taxation laws, deferred tax assets only if there is virtual /
reasonable certainty of realization of such assets. Deferred tax assets
are reviewed at each balance sheet date and written down or written up
to reflect the amount that is reasonable / virtual certain as the case
may be to be realized.
11. PROVISION AND CONTINGENT LIABILITIES:
A provision is made based on a reliable estimate when it is probable
that an outflow of resources embodying economic benefits will be
required to settle an obligation. Contingent liabilities, unless the
possibility of the outflow of resources embodying economic benefits is
remote, are disclosed separately in Notes to Accounts and / or provided
for depending upon the management''s perception as to whether the said
liability is likely to materialize or not. Contingent assets are not
recognized or disclosed in the financial statements.