1. Basis of Accounting:
The financial statements have been prepared under the historical cost
convention on an accrual system based on principle of going concern and
are in accordance with the generally accepted accounting principles and
the accounting standards referred to in section 211 (3C) of the
Companies Act, 1956.
2. Fixed Assets:
Fixed assets are capitalized at cost inclusive of freight, duties,
taxes, insurance, installation and net of cenvat credit and VAT set
Depreciation on fixed assets for own use has been provided based on
straight-line method and at the rates prescribed by Schedule XIV of the
Companies Act, 1956. Depreciation on assets added/disposed off during
the period is provided on pro-rata basis from the date of addition or
up to the date of disposal, as applicable. Depreciation on building
constructed on lease hold land is provided over the lease Period. Cost
of improvements to land and building taken on lease are amortized over
the remaining lease period.
4. Impairment of Assets:
Impairment loss is recognized wherever the carrying amount of an asset
is in excess of its recoverable amount and the same is recognized as an
expense in the statement of profit and loss and carrying amount of the
asset is reduced to its recoverable amount.
Reversal of impairment losses recognized in the prior years is recorded
when there is an indication that the impairment losses recognized for
the asset no longer exist or have decreased.
Long Term Investments are stated at cost except that there is permanent
diminution in value of the said investment as required by AS-13.
a) Raw materials are valued at cost or net realizable value which ever
is lower as per FIFO method followed.
b) Work-in-process is valued at estimated cost (including factory
over-heads and depreciation)
c) Manufactured finished goods are valued at lower of estimated cost
(including factory overheads and depreciation) or net realizable value
as per FIFO method followed.
d) Traded goods are valued at lower of cost or net realizable value as
per FIFO method followed.
e) Re-usable waste generated on conversion of defective or damaged or
obsolete stocks are valued at estimated material cost.
7. Purchases And Sales:
a) Purchases are recorded net of cenvat credit.
b) Sales are recognized at the time of dispatches and include excise
duty, VAT and are net of returns. In case of export sales, revenue is
recognized as on the date of bill of lading, being the effective date
Income tax expense comprises current tax, deferred tax charge or
release and charge on account of fringe benefit tax. The deferred tax
charge or credit is recognized using substantially enacted rates. In
the case of unabsorbed depreciation or carry forward losses, deferred
tax assets are recognized only to the extent there is virtual certainty
or realization of such assets. Other deferred tax assets are recognized
only to the extent there is reasonable certainty of realization in
future. Such assets are reviewed as at each Balance Sheet date to
9. Retirement Benefits:
Provisions for/contributions to retirement benefits schemes are made as
a) Provident fund on actual liability basis.
b) Gratuity based on actuarial valuation done as at the reporting date.
10. Provisions, Contingent Liabilities and Contingent Assets:
Provisions involving substantial degree of estimation in measurement
are recognized when there is present obligation as a result of past
event and it is probable that there will be an outflow of resources.
Contingent Liabilities are not recognized but are disclosed in the
notes. Contingent Assets are neither recognized nor disclosed in the
financial statement except where virtual certainty is there.
11. Use of Estimates:
The preparation of financial statements in conformity with the
generally accepted accounting principles requires estimates and
assumptions to be made that affect the reported amounts of assets and
liabilities on the date of financial statements and the reported
amounts of revenues and expenses during the reported Period. Difference
between the actual results and estimates are recognized in the Period
in which the results and estimates are recognized in the Period in
which the results are known or materialize.
12. Provisioning/Write-off of Doubtful Debts:
Unrealizable Debts and Sundry balances has been written-off to present
true and fair view of the Management and as per the policy adopted by
the Management of the company in the previous years.