1. Basis of Accounting
The financial statements have been prepared under historical cost
convention on accrual basis of accounting in accordance with accounting
principles generally accepted in India, the applicable Accounting
Standards (AS) and the relevant provisions of the Companies Act, 1956.
2. Valuation of Inventories
-Raw Material At cost -Material in Process
At estimated process cost.
- Finished Goods
At cost or market price whichever is lower.
(inclusive of Excise Duty)
- Stores Et Spares etc.
At estimated realisable value.
3. Excise Duty/Cenvat
- Excise Duty in respect of goods lying in the factory, at the close of
the year, is accounted for at the prevalent applicable rate of duty.
- Cenvat on capital goods is credited to respective assets.
- Cenvat on purchase of raw material and other material is deducted
from the cost of such material.
- Cenvat on Input Service is credited to respective expense.
4. Prior Period Items/Extra-ordinary Items
Prior period items/Extra-ordinary items, having material impact on the
financial affairs of the Company, are disclosed separately.
- Depreciation on fixed assets is provided, on the basis of actual
working days/utilisation, on written down value method, as per the
rates prescribed in Schedule XIV of the Companies Act, 1956.
- Depredation on additions to fixed assets is calculated on month-end
- Depreciation on assets sold & scrapped, during the year, is provided
upto the month in which such fixed assets are sold or scrapped.
6. Revenue Recognition
- Revenue from sales of goods is recognised when risk and rewards of
ownership are transferred to the customers.
- Revenue from services is recognised as and when services are rendered
and related costs incurred.
- Other income is recognised on accrual basis unless otherwise stated.
- Sales are shown net of Excise Duty and other taxes, as applicable.
7. Fixed Assets
- Fixed Assets are stated at their cost of acquisition or construction
less accumulated depreciation and impairment of assets, if any.
- Cost comprises of purchase price and any attributable cost of
bringing the asset to its working condition for its intended use.
Capital Work-in-Progress ''
Expenses incurred during construction/installation period are included
under capital work-in-progress and allocated to relevant fixed assets
in the ratio of cost of the respective assets on completion of
8. Foreign Currency Transactions
- Foreign currency transactions are recorded at the exchange rate
prevailing on the date of transaction.
- Gains or losses, if any, arising due to exchange differences at the
time of transaction or settlement are accounted for in the Statement of
Profit & Loss.
- Current Investments are carried at cost or fair value whichever is
- Long-term investments are carried at cost. Provision for diminution
in value of long term investments is made only, if a decline is other
10. Employee Benefits
- Contributions as required under the Statute/Rule are made to
Provident Fund and charged to the Statement of Profit 6t Loss of the
year when the contributions to the fund are due.
- Provisions of Employees State Insurance are not applicable.
- Leave Encashment and Bonus are accounted for on accrual basis.
- Gratuity is accounted for on accrual basis - the Company has not
opted for any policy for Group Gratuity Scheme from Life Insurance
Corporation of India or any other insurer covered under the specified
provisions of the Income Tax Act, 1961.
- Termination benefits are recognised as an expense as and when
11. Borrowing Costs
Borrowing costs which are directly attributable to acquisition,
construction or production of a qualifying asset are capitalised as a
part of the cost of such assets. Other borrowing costs are recognised
as an expense in the period in which they are incurred.
12. Operating Lease
Leases where significant portion of reward and ownership are retained
by the lessor is classified as Operating Lease Et lease rentals,
thereon, are charged to Statement of Profit & Loss.
13. Earning Per Share (EPS)
Annualised basic earning per equity share is arrived at based on net
profit/(loss) attributable to equity shareholders to the basic weighted
average number of equity shares.
14. Taxeson Income
- Current Tax is measured at the amount expected to be paid to the tax
authorities in accordance with the Indian Income TaxAct, 1961.
- Deferred tax is recognised, subject to the consideration of prudence
in respect of deferred tax assets/liabilities, on timing differences,
being the difference between taxable income and accounting income that
originate in one period and are capable of reversal in one or more
15. Impairment of Assets
The carrying amounts of assets are reviewed at each Balance Sheet date
if there is any indication of impairment based on internal/external
factors. An asset is treated as impaired when the carrying cost of the
assets exceeds its recoverable value. An impairment loss, if any, is
charged to the Statement of Profit and Loss in the year in which an
asset is identified as impaired. Reversal of impairment losses
recognised in prior years is recorded when there is an indication that
the impairment losses recognised for the assets no longer exist or have
16. Provisions, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement
are recognised 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 recognised but are disclosed in the
Notes to Accounts.
Contingent assets are neither recognised nor disclosed in the financial
17. Insurance and other claims
Insurance claims are accounted for on settlement of claims/on receipt.
18. Miscellaneous Expenditure
The Company follows the policy of treating some expenditure, the
benefits of which accrue to the Company over an extended period as
miscellaneous or deferred revenue expenditure and amortises such
expenditure over a period of upto five years depending on the nature &
expected future benefits of such expenditure.