I. Basis of Presentation
The financial statements are prepared under the historical cost
convention modified by revaluation of fixed assets and in accordance
with applicable Accounting Standards and relevant presentation
requirements of the Companies Act. For recognition of income and
expenses, Mercantile system of Accounting is followed.
II. Fixed Assets
Fixed Assets are stated at cost or revaluation net of accumulated
depreciation. Cost comprises the purchase price and any directly
attributable costs of bringing the assets to working condition for its
intended use. When fixed assets are revalued,surplus on revaluation is
credited to Revaluation Reserve Account.
Investments are stated at cost of acquisition. Market value of quoted
Investments at the date of the Balance Sheet is disclosed. Adjustment
for increase / decrease in the value of investment, if any, is
accounted for on realisation of the investment.
Inventories are valued at lower of cost or net realisable value. Cost
for raw materials, store, packing material and consumables is generally
determined on FIFO basis. Cost for own manufacturued goods comprises of
materials and other attributable expenses and overheads (including
Depreciation on fixed assets has been provided on streight line method
basis. Depreciation on Plant and Machinery has been provided for at the
rates prescribed in Schedule XIV to the Companies Act 1956. In respect
of certain assets whose residual useful life is determined to be less
than the residual life as per books, depreciation is provided at the
adjusted higher rates so that the value thereof is written off over the
useful life detrmined. ''
VI. Retirement Benefits
Retirement benefit in the form of provident fund is a defined
contribution scheme. The contributions to the Provident fund are
charged to the statement of profit and loss for the year when the
contributions are due. The comapny has no obligation, other than the
contribution payable to the provident fund.
The company operates defined benefit plan viz gratuity. The costs of
providing benefits under this plan are determined on the basis of
actuarial valuation each year.
VII. Foreign Currency Transactions ''
Outstanding foreign currency assets and liabilities are translated at
the exchange rate prevailing as on Balance Sheet date or forward cover
rate (as stretched over the period of contract), as the case may be.
Gains or losses on these assets and liabilities including those on
cancellation of forward exchange contracts, relating to the acquisition
of fixed assets are adjusted to the cost of such fixed assets and those
relating to other accounts are recognised in the Profit and Loss
Account under res- pective heads of accounts. The difference between
the forward rate and the exchange rate at the date of transaction is
recognised as income or expencese over the life of contract.
VIII. Taxes on Income
Current tax is determined as the amount of tax payable in respect of
taxable income for the period. .
Deferred tax is recognised, subject to the consideration of prudence,
on timing differences, being the differeces between taxable income and
accounting income that originate in one period and are cap- able of
reversal in one or more subsequent periods. Deferred tax assets are not
recognised unless there is virtual certainty that sufficient future
taxable income will be available against which such deferred tax assets
can be realised.