a. The Company follows accrual system of accounting except for
insurance claims which are accounted on receipt basis
b. Basis of preparation of Financial Statements:
Financial statements are prepared under historical cost convention, in
accordance with generally accepted accounting principles, the
provisions of the Companies Act, 1956 and applicable mandatory
accounting standards issued by the ICA1.
c. Fixed Assets and Depreciation:
(i). Fixed assets are stated at cost.
(ii). Depreciation is provided on straight line method as per the rates
prescribed in Schedule XIV of the Companies Act, 1956.
(iii) Impairment of Assets - Management periodically assess using
external and internal sources whether there is any indication that an
asset is impaired.
d. Investments are treated as long term & are stated at Cost.
e. Valuation of Inventories:
(i). Stores, Spares, Loose Tools, Raw materials and consumables - at
(ii). Work-in-process at cost and Finished Goods at lower of cost or
net realisable value.
f. Sales: The export sales are accounted for on shipment of goods.
g. Retirement benefits:
(i). The Company is contributing to Employees Provident Fund &
Employees State Insurance Scheme. The contributions made by the
company are charged to the Profit and Loss account.
(ii) The gratuity covered by the Group Gratuity Insurance Scheme policy
with Life Insurance Corporation of India, and the premium paid is
charged to profit and loss account.
(iii). Provision for leave encashment as at the year end is charged to
Profit and Loss account.
h. Foreign Exchange Transactions:
(i) Foreign currency transactions are recorded at the exchange rate
prevalent as on the date of the transaction. The gains or losses on
realisation are accounted for in the Profit & Loss Account.
(ii) The foreign currency availed for foreign travel has been
translated at the exchange rate at the time of purchase
i. Borrowing costs
Interest cost on qualifying asset, being an asset that necessarily take
substantial period of time to get ready for its intended use or sale
(as per AS 16) is capitalised on the funds borrowed and utilised for
the acquisition of such asset.
j. Treatment of expenditure during construction period
Expenditure during construction period is included under Capital Work
in Progress and the same is allocated to the respective Fixed Assets on
completion of construction / erection.
k. Intangible Assets - Intangible Assets are recognised only if
a) it is probable that the future economic benefits that are
attributable to the assets will flow to the company, and
b) the cost / fair value of the assets can be measured reliably.
I. Provision & Contingent Liability - The company recognizes a
provision when there is a present obligation as a result of a past
event that probably requires an outflow of resources and a reliable
estimate can be made of the amount of the obligation. The disclosure
for contingent liability is made when there is a possible obligation or
a present obligation but outflow of resources is not probable.