a) The financial statements are prepared under the historical cost
convention and have been prepared in accordance with applicable
mandatory Accounting Standards and relevant presentational requirements
of the Companies Act, 1956.
b) Fixed Assets are stated at cost less depreciation. The cost of fixed
assets includes interest on specific borrowings obtained for the
purpose or acquiring fixed assets up to the date of commissioning of
the assets and other incidental expenses incurred up to that date.
c) Plant and machinery includes expenses incurred on erection and
commissioning, foundation, laboratory equipment, air and water
pollution devices, electric installations, technical know-how fees,
tools, and miscellaneous fixed assets other than land, building,
furniture & fixture, vehicles, office equipments, computer equipments
and air conditioning equipments. Technical know-how fee is inseparable
and hence treated as part of plant & machinery. No adjustment is
required to be made as per accounting standard 26 on intangible assets,
issued by the Institute of Chartered Accountants of India.
d) Long term investments are valued at cost. Where investments are
reclassified from current to long term, transfers are made at the lower
of cost and fair value at the date of transfer.
e) Inventories of raw materials, stock-in-process, semi finished
products, stores, packing materials, spares and loose tools, finished
products are valued at lower of cost or net realizable value. In
determining the cost, first in first out method is used .
f) Prior year expenses / income, if any are adjusted in the respective
head of expenses/ income. This has no effect on the working result of
g) Depreciation has been provided on the straight-line method at rates
and in the manner prescribed in Schedule XIV of the Companies Act,
1956.Deprivation on addition to assets or sales / discardment of assets
is calculated on pro rata basis from the date of such addition or upto
the date of such discernment as the case may be.
h) Provision for employee benefits charged on accrual basis is
determined based on Accounting standard (AS) 15 (Revised) Employees
Benefits issued by the Institute of Chartered Accountants of India as
I) Contribution to provident fund scheme is charged to revenue.
II) Liability for gratuity and privilege leave is determined on
i) The Government grants are recognized only on the assurance that the
same will be received. The Government grants in respect of capital
investment have been shown as capital reserve.
j) Contingent liabilities are not provided for and are disclosed by way
of notes. This has no effect on the working result of the Company.
k) Income Tax are accounted for in accordance with Accounting Standard
-22 on Accounting for Taxes on Income. Income Tax Comprise of both
current and deferred Tax.
Current Tax is measured at the amount expected to be paid to /
recovered from the revenue authorities, using applicable tax rates and
The tax effect of the timing differences that result between taxable
income and accounting income and are capable of reversal in one or more
subsequent periods are recorded as Deferred Tax Asset or Deferred Tax
Liability. Deferred Tax Assets and Liabilities are recognized for
future tax consequences attributable to timing differences. They are
measured using substantively enacted tax rates and tax regulations.
l) Foreign currency transactions denominated in foreign currencies are
normally recorded at the exchange rate prevailing at the time of the
m) Borrowing costs are directly attributable to the acquisition,
construction or production of qualifying assets is capitalized till the
month in which the assets is ready to use as part of the cost of that
asset. Other interest and borrowing costs are charged to revenue.
n) In case of the new industrial unit, all the operating expenditure
(including borrowing costs) specifically for the project, incurred upto
the date of installation, is capitalized and added pro-rata to the cost
of fixed assets.
o) Consignment sale is shown at net of expenses and are recognized when
goods are sold to a third party.
p) In the opinion of the company''s Management, there is no impairment
to the assets to which Accounting Standard 28 Impairment of Assets
applied requiring any revenue recognisition.