a. Accounting Convention
The financial statements are prepared under the historical cost
convention and materially comply with the mandatory accounting standard
issued by the Institute of Chartered Accounts of India.
b. Fixed Assets
Fixed Assets are stated at their original cost, net of MODVAT,
Including Freight, Duties, Taxes and other incidental expenses relating
to acquisition and installation. Exchange difference in respect of
liabilities incurred to acquired Fixed Assets including gains/losses
arising from forward contracts is adjusted to the carrying amount of
Expenditure incurred during the period of construction are carried
forward as Capital Work-in-Process and on completion, the costs are
allocated to the respective Fixed Assets.
Depreciation is provided on a prorata basis, from the date the assets
have been installed and put on use, on Straight Line Method at the
rates and in the manner specified in Schedule XIV of the Companies Act,
Stores, Spares, Raw Material, Packing Material and Work-in-Progress are
stated at cost. Finished Goods are stated at lower of cost and
realisable value. Waste is valued at realisable value.
The basis for determining cost for various categories of inventories is
as follows :
i) Stores, Spares, Raw Material and
Packing Material : First in first out
ii) Finished Goods and
Work-in-Progress : Cost plus appropriate various
e. Foreign Currency Transactions
Transaction in Foreign Currency are recorded at the exchange rate
existing at the time of transaction. Any gain/loss arising at the time
of realisation is accounted for as Foreign Exchange Fluctuation in the
year of realisation. Foreign currency liabilities incurred for the
acquisition of Fixed Assets are translated at exchange rates prevailing
on the last working day of the accounting year and the loss or gain
arising out the said translation is adjusted to the cost of Fixed
f. Excise Duty
The amount of Excise Duty paid on goods cleared and remaining unsold is
carried over and shown as `MODVAT Credit Receivable' under Loans and
g. Sales and Sales tax
Sales are recognised at the point of the despatch to the customers.
Sales are inclusive of Excise Duty and Freight. The Company is
eligible for Sales Tax exemption under the terms and conditions of
Director of Industries, Haryana.
h. Claims and Benefits
Claims receivables and modvat benefit are accounted for on accrual
basis. Subsidy granted under capital investment scheme will be
accounted on receipt basis.
i. Income from Investments/Deposits
Income from Deposits is credited to revenue in the year in which it
j. Miscellaneous Expenditure
Preliminary Expenses are being written off over a period of ten years.
Share Issue Expenses and Deferred Revenue Expenditure are being written
off over a period of five years.
k. Contingent Liabilities
Unprovided contingent liabilities are disclosed in the accounts by way
of notes giving nature and quantum of such liabilities.
Demand received from custom department not acknowledge as debt amount
to Rs. 31,13,695/- (Previous year Rs.31,13,695/-) against EPCG
Commitment not met out by the Company.