1. Basis of Preparation of Financial statements : The Financial
Statements have been prepared in accordance with Indian Generally
Accepted accounting principles (GAAP), generally under the historical
cost convention on accrual basis except insurance, Interest on debtors
and other claims receivable, which are accounted for on receipt/payment
basis. GAAP comprises of mandatory Accounting Standards notified by
companies (Accounting Standards) Rules 2006 and relevant provisions of
the companies Act 1956, the Guidelines issued by ICAI and Securities
and Exchange Board of India (SEBI). Accounting Policies have been
consistently adopted except where a change in existing GAAP requires a
change in accounting policy hitherto in use.
2. Use of Estimates : The presentation of financial statements
requires estimates and assumptions to be made that affect the reported
amount of assets and liabilities on the date of the financial
statements and the reported amount of revenues and expenses during the
reporting period. Difference between the actual results and the
estimates are recognized in the period in which the results are
3. Fixed Assets, Intangible Assets and Depreciation :
(i) (a) Fixed assets are stated at cost of acquisition or construction
less depreciation. All cost relating to the acquisition & installation
of fixed assets are capitalized.
(b) Addition in Fixed assets is stated at cost net of VAT and Cenvat
credit, Custom duty (where applicable). All cost relating to
acquisition and installation of fixed asset are capitalized.
(c) Agricultural land is shown at cost price.
(ii) Revalued assets are recorded at revalued amount less depreciation
on revalued amount.
(iii) (a) Depreciation on fixed assets is provided on written down
value basis at the rates and in the manner prescribed in Schedule XIV
of Companies Act, 1956. Depreciation in respect of revalued amount, the
additional depreciation attributable to revaluation is withdrawn from
revaluation reserve. Depreciation on addition in fixed assets has been
adjusted after deducting the amount of excise duty & VAT availed as
Cenvat and VAT set off.
(b) Depreciation on assets added/disposed off during the year has been
provided on prorata basis with reference to date of addition/disposed
except for items on which 100% depreciation rate are applicable.
(iv) Fixed assets acquired in exchange or in part exchange for another
asset are recorded at the net book value of the assets given up,
adjusted for any balancing payment or receipt of cash or other
(v) Capital Assets under erection/installation/construction are
reflected in the Balance sheet as Capital Work in Progress.
4. Purchases : Purchase of all Raw materials, Aluminium wire Rods,
glassine paper, packing material, Oil & Lubricants, Gas Cylinder,
production, mechanical & Electrical stores, Polythene and polyester
film & paper are accounted for on basic price & CST. Cenvat and VAT on
purchase of these items are shown as Cenvat recoverable & VAT
recoverable is adjusted against the Excise/Sales Tax liabilities.
5. Investments : Short term investments are stated at cost or market
price, whichever is lower.
Long term Investments are stated at cost. Provision for diminution in
the value of long-term investments is made only if such a decline is
other than temporary in the opinion of the management.
Dividends reinvested are added to the cost of investments on the NAV of
the date of distribution of dividend by mutual funds.
6. Inventories & Other Current Assets :
Inventories as taken and certified by the management are valued as
(a) Raw materials, dyes & Chemicals : At cost excluding cenvat credit
and VAT. packing material, Polyester Film, Paper and Polythene
(b) Production, Electrical, Mechanical and : At cost excluding cenvat
credit & VAT consumable store & spares
(c) Oil & lubricants : At cost excluding excise duty except HSD.
(d) Work in process : At estimated cost (valued as certified by the
(e) Aluminium wire rods : At cost or market price whichever is lower.
(f) Scrap & rejected goods : At net realizable value determined by
(g) Finished goods : Valuation of finished goods Manufactured but not
cleared from excise bonded warehouse up to the end of the year is at
cost or market price, whichever is lower inclusive of Excise Duty.
(Cost price estimated by deducting approx 8.75% from the selling
(h) Stock at port & in transit : At Selling price
(i) Stock in transit/ware house (Purchase) : At purchase price
including clearing expenses and custom duty paid.
(j) DEPB licences Purchased : At cost.
(k) Gas Cylinder : At cost
(l) Returned Material outside factory : At Net Realisable Value on the
basic sale price solder at price certified by management.
(m) Stock with Consignment Agent : At cost (estimated by deducting
8.75% from the selling price) plus excise and expenses as per Invoice.
Note: The cost of raw materials, dyes, chemicals, packing material, oil
& lubricant and consumable stores are arrived at on first in first out
method and in the case of basic raw material, freight inward expenses
have also been considered.
7. Expenditure :
(a) All other expenses are accounted for on accrual basis and
consumption of stores has been taken on actual consumption.
(b) Power unit generated from Enercon wind power plant which has been
wheeled for captive consumption after adjusting wheeling charges @ 10%
of the energy fed into grid to RVPNL Discom(s) is accounted on
effective tariff rate in power bill and simultaneously such figure was
also reflected in other operating revenue.
8. Employee Benefits :
(a) Defined contribution plans : The Company''s contribution to
provident fund is considered as defined contribution plans and are
charged as an expense as they fall due based on the amount of
contribution required to be made.
(b) Defined benefit plans : Gratuity payable to employees is provided
for on the basis of premium paid under group gratuity Scheme with Life
Insurance Corporation of India.
Provision of Leave encashment has been made on accrual basis on leave
un-availed balance available as on 31.03.2012.
Service Awards have been adjusted/accounted on the basis of completed
(c) Short-term employee benefits : Short term employee benefits are
recognised as an expense at the undiscounted amount in the statement of
profit and loss for the year in which the related service is rendered.
9. Borrowing Costs : Borrowing costs that are attributable to the
acquisition or construction of qualifying assets are capitalized as
part of the cost of such assets. A qualifying asset is one that
necessarily takes substantial period of time to get ready for intended
use. All other borrowing costs are charged to revenue.
10. Revenue Recognition :
(a) Sales are inclusive of Cenvat but are net of Sales returns,
Shortages and other discounts & rebates but excluding value of
recoveries made for insurance, freight and packing forwarding expenses,
which have been shown in the invoice value and are adjusted in the
(b) Discount and rebates on sales is accounted for as and when settled.
(c) Export sales are accounted for on the basis of exchange rate on
date of transactions and recognized only when export goods leaves the
territory of India.
(d) Revenue from investment is accounted on sale/disposal of such
(e) Export Incentive: (i) Revenue from DEPB Licences is recognised when
the licences are sold/utilized and are shown as other operating
revalue. (ii) Revenue of duty drawback has been accounted on accrual
(f) Units generated on Enercon wind power plant has been accounted on
the basis of effective tariff rate in respective month. Units generated
on Suzlon wind power plant has been accounted at contract price
(g) Interest receivable from debtor and dividend from investment are
considered on receipt basis.
(h) The Company has purchased DEPB Licenses from market at discounts
and the same has been shown as Discounts received on purchase of DEPB
in other income.
11. Transaction in Foreign Currencies (Other than for fixed assets) :
Transactions denominated in foreign currencies are normally recorded at
the exchange rate prevailing at the time of the transaction. Gain/Loss
arising out of fluctuation in between transaction date and realization
date are recognized in statement of profit & loss.
All foreign currency Monetary items at the year-end which not covered
by foreign exchange contracts are translated at year-end rates.
The difference between the foreign exchange contract rate and the
exchange rate on the date of transaction is recognized as income or
expenditure over the life of the contract.
Foreign Exchange Gain/Loss of buyer''s credit taken from foreign bank
has been recognized at the date of transaction and recognized in
statement of profit & loss.
12. Impairment of Assets :
All assets other than inventory, investment or deferred tax assets are
reviewed for impairment where event or changes in circumstances
indicate that the carrying amount may not be recoverable. Assets whose
carrying amount exceeds their recoverable amount will be written down
to recoverable amount. An impairment loss is charged to the statement
of Profit and Loss in the year in which an asset is identified as
13. Cenvat and VAT :
The value of Cenvat and VAT benefits eligible on raw materials, other
eligible inputs, production stores and capital goods is considered for
the clearances of finished goods
14. Accounting of Taxes on Income :
Provision for current tax is made after taking into consideration
benefits admissible under the provisions of the Income Tax Act, 1961.
Deferred tax resulting from timing differences between book and
taxable profit is accounted for using the tax rates and laws that have
been enacted or substantively enacted as on the balance sheet date. The
deferred tax asset is recognized and carried forward only to the extent
that there is a reasonable certainty that the asset will be realized in
15. Contingent Liabilities :
The company is not providing for contingent liabilities in the account
since the ultimate outcome thereof cannot be determined on the date of
balance sheet. However, notes on every contingent liabilities exist on
the date of balance sheet are given in notes on account. Contingent
assets are neither recognized nor disclosed in the balance sheet.
16. Earnings Per Share :
Basic and diluted earning per share are computed by dividing the net
profit after tax attributable to equity shareholders for the year, with
the weighted number of equity shares outstanding during the year.
Lease rentals under an operating lease, are recognized as an expenses
in the statement of Profit & Loss on a straight line basis over the
lease term. Lease Income from Operating lease is recognized in
statement of Profit & Loss on a Straight line basis over the Lease