Basis of Accounting:
These financial statements have been prepared under historical cost
convention from books of accounts maintained on an accrual basis
(unless otherwise stated hereinafter) in conformity with accounting
principles generally accepted in India and comply with the Accounting
Standards issued by the Institute of Chartered Accountants of India and
referred to Sec 211(3C) of the Companies Act, 1956. The accounting
policies applied by the company are consistent with those used in
Fixed Assets are stated at their original cost, which includes
expenditure incurred in the acquisition of Assets/ construction of
Assets, Pre-operative expenses till the commencements of operation and
Interest up to the date of commencement of commercial production.
Depreciation has been provided on the straight-line method in
accordance with Schedule XIV of the Companies Act, 1956.
Long term Investments are stated at acquisition cost and provision is
made for diminution, other than temporary, in value of the investments.
Current investments are valued at lower of cost or market value/net
The cost of various categories of inventory is determined as follows:
1. Raw material and Packing Materials At Cost including local taxes
(Net of setoff) or Net realisable value, whichever is lower.
2. Stock in Process At Cost or Net realisable value, whichever is
3. Stock of Finished Goods At Cost or Net realisable value, whichever
4. Consumable Stores & Spares At Cost or Net realisable value,
whichever is lower.
5. Scrap At Net realisable value
Cost of raw material and packing materials are determined using first
in first out (FIFO) method. Costs of finished goods and stock in
process include cost of raw material and packing materials, cost of
conversion and other costs incurred in bringing the inventories to the
present location and condition.
Employees Retirement Benefits:
(a) Defined Contribution Plans.
The Company has Defined Contribution Plan post employment benefit in
the form of provident fund for eligible employees, which is
administered by Regional Provident Fund Commissioner; Provident fund is
classified as Defined Contribution Plan as the Company has no further
obligation beyond making the contributions. The Company''s contributions
to defined Contribution Plans are charged to the Profit and Loss
Account as and when incurred.
(b) Defined Benefit Plan.
The Company has Defined Benefit Plan for post employment benefit in the
form of Gratutity for eligible employees, which is administered through
a Group Gratuity Policy with Life Insurance Corporation of India
(L.I.C). The Liability for the above Defined Benefit Plan is provided
on the basis of an actuarial valuation as carried out by L.I.C. The
actuarial method used for measuring the liability is the Projected Unit
(c) Termination Benefits, if any, are recognized as an expense as and
(d) The Company does not have policy of leave encashment and hence
there is no liability on this account. Refer to additional note no.14
Gross Sales are inclusive of State Excise duty, MVAT, and Net of
returns, Claims, and Discount etc.
The Company recognises sale of goods when the significant risks and
rewards of ownership are transferred to the buyer, which is usually
when the goods are loaded in party''s vehicle and are ready for dispatch
after clearance from excise officials at the factory.
Interest Income is accounted on accrual basis and dividend income is
accounted on receipt basis.
Fixed deposit interest is accounted as per statement/documents issued
State Excise duty payable on finished goods is accounted for on
clearance of goods from the Factory. Company''s products do not attract
any Central Excise duty.
The Company had incurred expenses on brand development of various
products. The expenses were accounted as per prevailing Industry
Value Added Tax (VAT):
VAT payable of finished goods is accounted net of setoff i.e. VAT
payable on finished goods less VAT paid on inputs.
Provision is made for income tax liability estimated to arise on the
results for the year at the current rate of Tax in accordance with
Income Tax Act, 1961.
In accordance with the According standard 22, Accounting for Taxes on
Income, issued by the Institute of Chartered Accountants of India,
deferred Tax resulting from timing differences between book profit and
Tax profit is accounted for, at the current rate of Tax, to the extent
the timing differences are expected to crystallize.
Deferred Tax arising on account of depreciation is recognised only to
the extent there is a reasonable certainty of realisation.
A provision is recognized when an enterprise has a present obligation
as a result of a past event and it is probable that an outflow of
resources will be required to settle the obligation, in respect of
which a reliable estimate can be made. Provisions, other than
employee''s benefits, are not discounted to their present value and are
determined based on management estimate required to settle the
obligation at the balance sheet date. These are reviewed at each
balance sheet date and adjusted to reflect the current management
Expenses are net of taxes recoverable, where applicable.
1 Impairment of Assets:
Impairment losses, if any, are recognized in accordance with the
accounting standard 28 issued in this regard by The Institute of
Chartered Accountants of India.