1.1 Basis of accounting and preparation of financial statements
The financial statements of the Company have been prepared in
accordance with the Generally Accepted.
1.2 Use of estimates
The preparation of the financial statements in conformity with Indian
GAAP requires the Management to make estimates and assumptions
considered in the reported amounts of assets and liabilities (including
contingent liabilities) and the reported income and expenses during the
year. The Management believes that the estimates used in preparation of
the financial statements are prudent and reasonable. Future results
could differ due to these estimates and the differences between the
actual results and the estimates are recognised in the periods in which
the results are known / materialise.
Inventories are valued at cost. Cost includes all charges in bringing
the goods to the point of sale.
1.4 Depreciation and amortisation
Depreciation has been provided on the straight-line method as per the
rates prescribed in Schedule XIV to the Companies Act, 1956.
1.5 Revenue recognition Sale of goods/services:
Sales comprise sale of goods net of trade discount and sales tax.
Excise duty collected has been included in sales value.
1.6 Other income
Interest income is accounted on accrual basis. Dividend income is
accounted for when the right to receive it is established.
1.7 Tangible fixed assets
Fixed assets are carried at cost less accumulated depreciation and
impairment losses, if any. The cost of fixed assets includes interest
on borrowings attributable to acquisition of qualifying fixed assets up
to the date the asset is ready for its intended use and other
incidental expenses incurred up to that date. Exchange differences
arising on restatement / settlement of long-term foreign currency
borrowings relating to acquisition of depreciable fixed assets are
adjusted to the cost of the respective assets and depreciated overthe
remaining useful life of such assets. Machineryspares which can be used
only in connection with an item of fixed asset and whose use is
expected to be irregular are capitalised and depreciated over the
useful life of the principal item of the relevant assets. Subsequent
expenditure relating to fixed assets is capitalised only if such
expenditure results in an increase in the future benefits from such
asset beyond its previously assessed standard of performance.
1.8 Employee benefits
Employee benefits include provident fund, superannuation fund, gratuity
fund,. Liability of Gratuity has been provided as actually determined
as at the year end and contribution is being made to LIC of India under
group gratuity fund. However, leave encashment on separation has been
accounted for on payment basis.
1.9 Earnings per share
Basic earnings per share is computed by dividing the profit / (loss)
after tax (including the post taxeffect of extraordinary items, if any)
by the weighted average number of equity shares outstanding during the
1.10 Taxes on income
Current tax is the amount of tax payable on the taxable income for the
year as determined in accordance with the provisions of the Income Tax
1.11 Treatment of Prior Period and Extra Ordinary Items
Any material (other than those arising out of over/ under estimation in
earlier years) arising as a result of error or omission in preparation
of earlier years financial statements are separately disclosed.
1.12 Provisions and Contingent liabilities
A provision is made based on reliable estimate when it is probable that
an outflow or resources embodying economic benefits will be required to
settle an obligation. Contingent liabilities, if material, are
disclosed by way of notes to accounts.
1.13 Excise Duty
Excise duty payable on finished goods held in plant is neither included
in expenditure nor valued in stocks, but it is accounted for on
clearance of goods from plant. This accounting treatment has no impact
1.14 Research and Development
Research and Development costs other than cost of fixed assets
acquired/ developed, or charged as expenditure in the year in which
they are incurred