1 ACCOUNTING ASSUMPTION
The financial statements are drawn up in accordance with the historical
cost convention on accrual basis and comply with the accounting
standards referred to in Sec 211 (3C) of the Companies Act, 1956.
2 FIXED ASSETS
All fixed assets are stated at cost of acquisition less accumulated
depreciation and impairment loss, if any. Cost comprises the purchase
price, material cost and any attributable/incidental cost incurred by
the Company for bringing the asset to its working condition for its
intended use. In the case of fixed assets acquired for new projects /
expansions, finance cost of borrowing and other related expenses up to
the date of commercial production incurred towards acquiring fixed
assets are capitalized.
a. The Company assesses at each balance sheet date whether there is
any indication that an asset may be impaired. If any such indication
exists, the Company estimates the recoverable amount of the asset. If
such recoverable amount of the asset or the recoverable amount of the
cash-generating unit to which the asset belongs is less than its
carrying amount, the carrying amount is reduced to its recoverable
amount. The reduction is treated as an impairment loss and is
recognized in the Profit & Loss account.
b. A previously recognized impairment loss is increased or reversed
depending on changes in circumstances. However, the carrying value
after reversal is not increased beyond the carrying value that would
have prevailed by charging usual depreciation if there was no
Depreciation on all fixed assets except moulds is provided on
straight-line method at the rate specified in Schedule XIV of the
Companies Act, 1956. Depreciation on additions / deletions is provided
on pro-rata basis to the months of additions / deletions.
Moulds with predetermined useful life, are depreciated on the actual
usage of the mould impression used for production during the reporting
period. Deprecation on mould provided in the books is not less than
deprecation if provided at the rates specified in the schedule XIV of
the Companies Act, 1956.
Investments are classified as long-term investments and are stated at
cost. Diminution in value, if any, which is of a temporary nature, is
6 VALUATION OF INVENTORIES
Raw materials, Stores & spares, and Packing Materials are valued at
weighted average cost. Work in progress and finished goods are valued
at lower of cost or net realizable value. Cost of working in progress
and finished goods is determined by taking materials, labour cost and
other appropriate allocable overheads. Excise Duty on goods
manufactured by the company and are remaining in inventory is included
as part of valuation of finished goods.
7 REVENUE RECOGNITION
Sales are recognized, on invoicing and actual dispatch to customers and
are recorded inclusive of Excise Duty and Sales Tax. Technical Services
and Other Fees, Interest incomes are accounted on accrual basis.
Dividends and Insurance Claims are accounted on receipt basis.
8 EXCISE DUTY
The Excise Duty in respect of Closing Inventory of Finished Goods is
included as part of the Inventory. The amount of CENVAT Credit, in
respect of Material consumed for Sales is deducted from Cost of
9 FOREIGN CURRENCY TRANSACTION
The transactions in foreign currency are accounted at exchange rate
prevailing on the date of transaction. Monetary items denominated in
foreign currency outstanding at the year-end are translated at the
year-end exchange rate and the unrealized exchange gain or loss is
recognized in the profit and loss account.
Exchange difference (Realized / Unrealized) as on reporting date,
arising on long term Foreign Currency Monetary Items so far as they
relate to acquisition of depreciable asset, are added to or deducted
from the cost of the asset. (This change in the accounting policy has
been made during the financial year 2011-12 in exercise of the option
given by the Government of India, Ministry of Corporate Affairs vide a
Notification dated December 29, 2011, amending the Companies
(Accounting Standards) Rules, 2006.)
10 RETIREMENT BENEFITS
The Company''s contributions in respect of Provident Fund are charged
against revenue every year. Present Liability for future payment of
Gratuity and unveiled leave benefits to the employees at the end of
the year is provided on the basis of actuarial valuation and is charged
11 BORROWING COSTS
Borrowing costs are recognized as an expense in the period in which
they are incurred, except to the extent where borrowing costs that are
directly attributable to the acquisition, construction, or production
of an asset till put for its intended use is capitalized as part of the
cost of that asset.
12 A. Current Tax
Provisions for Current Income tax liability is made on estimated
Taxable Income under Income Tax Act, 1961 after considering permissible
tax exemptions, deductions and disallowances. This liability is
calculated at the applicable tax rate or Minimum Alternate Tax rate
under section 115JB of The Income Tax Act, 1961 as the case may be.
B. Deferred Tax
Deferred Tax liability ascertained as on 31st March ''02 resulting
from timing differences between book profits and tax profits is
accounted for under the liability method, at the tax rate specified
under section 115JB of the Income Tax Act, 1961 to the extent that the
timing differences are expected to crystallize. Deferred tax liability
on timing difference arising subsequent to 31st March, 2002 is
accounted at regular rate as enacted in the Income Tax Act, 1961.
13 PROVISION AND CONTINGENT LIABILITIES
The Company recognizes a provision when there is a present obligation
as a result of a past event that probably requires an outflow of
resources and a reliable estimate can be made of the amount of the
obligation. A disclosure for a contingent liability is made when there
is a possible obligation or a present obligation that may, but probably
will not, requires an outflow of resources. Where there is a possible
obligation or a present obligation that the likelihood of outflow of
resources is remote, no provision or disclosure is made.
14. PROPOSED DIVIDEND
Dividend proposed by the Board of Directors is provided in the books of
account, pending approval of the Annual General Meeting.
15. MEASUREMENT OF EBIDTA.
As per the guidance note on revised schedule VI of the Companies Act
1956, issued by ICAI, the company has elected to present earnings
before interest, tax, depreciation & amortization (EBIDTA) as a
separate line item on the face of the statement of profit and loss. The
company measures EBIDTA on the basis of profit/(loss) from continuing
operations. In its measurements, the company does not include finance
costs, depreciation and amortization expense and tax expense.