a. Basis of Accounting
The accounts are prepared on historical cost convention on an accrual
basis and materially complies with the mandatory accounting standards
issued by the Institute of Chartered Accountants of India.
b. Fixed Assets
Fixed Assets are stated at cost, net of Cenvat, less accumulated
depreciation. All costs, including financial costs till commencement of
Depreciation on Fixed Assets other than Plant and Machinery has been
provided on “Straight Line Method at the rates provided in Schedule
XIV to the Companies Act, 1956. Depreciation on Plant and Machinery has
been provided on “Written down Value Method at the rates provided in
Schedule XIV to the Companies Act, 1956.
Inventories at year-end are valued at the lower of cost and net
realizable value. Raw Materials, Stores, Spares, Fuel, Packing
Materials, Finished Goods and Work in Progress are valued on FIFO
e. Foreign Currency Transactions
Transactions denominated in Foreign Currency are normally recorded at
the exchange rate prevailing at the time of transaction. Monetary
items denominated in foreign currencies at the year are translated at
the rate prevailing on the date of Balance Sheet. Exchange differences
are dealt with in the Profit & Loss account.
Sales are accounted for on dispatch of goods to the customers and are
inclusive of Excise Duty and Sales Tax but net of sales returns and
Long Term Investments are stated at its cost. Provision is only made to
recognize a decline other than temporary, in the value of investments.
h. Borrowing Cost
Borrowing Costs that are attributable to the acquisition or
construction of qualifying assets are capitalized as part of the cost
of such assets. All other borrowing costs are charged to revenue.
i) Provision for current tax is made and retained in the accounts on
the basis of estimated tax liability as per the applicable provisions
of the Income Tax Act, 1961.
ii) Deferred Tax resulting from timing differences between book and tax
profit is accounted for under the liability method, at the current
rates of tax, to the extent that the timing differences are expected to
j. Provisions, Contingent Liabilities and Contingent Assets
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 outflow of resources.
Contingent liabilities are not recognized but are disclosed in the
notes to accounts. Contingent Assets are neither recognized nor
disclosed in the financial statement.
k. Impairment of Assets
The Management Periodically assesses using external and internal
sources whether there is an indication that an asset may be impaired.
If an asset is impaired, the company recognizes the an impairment loss
as the excess of the carrying amount of the asset over the recoverable
l. Earning Per Share
Basic earning per share is calculated by dividing net profit after tax
for the year attributable to equity share holders of the company by the
weighted average number of equity shares issued during the year.
Diluted earning per share is calculated by dividing net profit
attributable to equity share holders (after adjustment for diluted
earnings) by average number of weighted equity shares outstanding
during the year.
m. Employee Benefits
(i) The employee and Company make monthly fixed Contribution to
Government of India Employee''s Provident fund equal to a specified
percentage of the covered employee''s salary, Provision for the same is
made in the year in which service are rendered by the employees.
(ii) The Liability for Gratuity to employee, which is a defined benefit
plan, is determined on the basis of actuarial Valuation based on
Projected Unit Credit method. Actuarial gain/Loss in respect of the
same is charged to the profit and loss account.
(iii) Leave encashment benefit to eligible employee has been
ascertained on actuarial basis and provided for. Actuarial gain/loss in
respect of the same is charged to the profit and loss account.