(a) ACCOUNTING CONCEPTS
i) The accounts are prepared on historical cost convention and in
accordance with applicable Accounting standards except where otherwise
stated. For recognition of Income and Expenses, Mercantile System of
Accounting is followed.
(b) REVENUE RECOGNITION
Revenue from sale of goods is recognised upon passage of title to the
customers, which generally coincides with their delivery.
(c) FIXED ASSETS
Fixed Assets are stated at cost less accumulated depreciation. The cost
of an asset comprises its purchase price and any directly attributable
cost of bringing the asset to working condition for its intended use.
Depreciation is provided on Straight Line Method at rates specified in
Schedule XIV of the Companies Act, 1956 as amended vide notification
dated 16th December, 1993 issued by the Department of Company Affairs,
Government of India.
(e) FOREIGN CURRENCY TRANSACTIONS
Transactions arising in foreign currency are accounted for at the rates
closely approximating those ruling on the transaction date.
Amounts payable and receivable in foreign currency are translated at
the exchange rate prevailing on the balance sheet date. In respect of
forward contract, the forward premium or discount is recognized as
income and expenses over the life of contract in the profit and loss
account and exchange difference between the exchange rate prevailing at
the year end and the date of the inception of the forward exchange
contract is recognized as income or expenses in the Profit & Loss
(f) EXCISE DUTY
The Company accounts for excise duty on manufactured goods at the time
of their clearance from the factory rather than at the point of
manufacture. This has, however, no impact on the operating results of
Inventories are valued as follows:
Raw Material - at lower of cost or net realizable value
Stores & Spare Parts - at lower of cost or net realizable value
Goods Under Process - at lower of cost or net realizable value
Finished Goods - at lower of cost or net realizable value
Cost is determined using FIFO Method
(h) RETIREMENT BENEFITS:
a) Contribution to defined contribution scheme such as Provident Fund
is charged to the profit & loss account as incurred.
b) The provision for Gratuity and Leave with wages liability are based
on actuarial valuation.
c) Company provides for privilege leaves not availed of by the
employees at the end of the year.
(i) AMORTISATION OF MISCELLANEOUS EXPENDITURE
Preliminary and Share issue expenses are amortised over a period to
(j) Finance Leases, which effectively transfer to the Lessee
substantially all risks and benefits incidental to ownership of the
leased item, are capitalized at the inception of the lease period at
the lower of the fair value and present value of the minimum lease
payments at the inception of the lease term by credit to liability for
an equivalent amount. Lease payments are apportioned between the
Finance charges and reduction of the lease liability so as to achieve a
constant rate of interest on the remaining balance of the liability.
(k) Impairment of Assets
At each Balance Sheet an assessment is made whether any indication
exists that an asset has been impaired. If any such indication exists,
an impairment loss i.e the amount by which the carrying amount of an
asset exceeds its recoverable amount is provided in books of accounts.