1. Basis of preparation of financial statements
The Financial statements are prepared under the historical cost
convention, on accrual basis, in accordance with applicable mandatory
accounting standards issued by the Institute of Chartered Accountants
of India and the relevant provisions of the Companies Act, 1956.
2. Revenue recognition
Revenue in respect of sales includes excise duty wherever applicable,
other taxes, job charges and net of returns, claims and rate
3. Fixed assets and capital work-in-progress
Fixed Assets are stated at cost of acquisition or construction after
reducing accumulated depreciation. Cost is inclusive of freight,
duties, levies, interest, installation charges and other incidental
expenses incurred for bringing the assets to their working condition
for intended use. Capital work-in-progress includes the cost of fixed
assets that are not yet ready for their intended use, including
pre-operative expenses pending capitalization.
Depreciation is provided on fixed assets as per the Straight Line
Method at rates provided in Schedule XIV of the Companies Act, 1956 on
pro-rata basis from the date assets have been put to use.
The inventories are valued at cost or net realizable value, whichever
is lower and the cost is arrived as follows:
Raw material cost is at landing cost inclusive of all attributable
expenses and is computed on First In First Out basis.
Work-in-progress and finished goods cost include material cost and
appropriate production overheads and excise duty, wherever applicable.
7. Retirement benefits
The Company makes regular contribution to Provident Fund and
contributions are charged to Profit & Loss Account.
The Company does not have any specified laid down scheme for retirement
benefits. However the same is accounted for as and when become
8. Borrowing Cost
Interest and other costs in connection with the borrowing of the funds
to the extent related/attributed to the acquisition/construction of
qualifying fixed assets, if any are capitalized up to the date when
such assets are ready for its intended use and other borrowing costs
are charged to Profit & Loss Account.
9. Foreign currency transactions
Transactions in foreign currency are recorded at the exchange rates
prevailing on the date of transactions. In case of liabilities incurred
for the acquisition of fixed assets the loss or gain is included in
carrying amount of related fixed assets. In other cases, the difference
between year-end rate and exchange rate at the date of the transaction
is recognized as income or expense in the profit and loss account.
10. Preliminary Expenditure
Preliminary expenses and public issue expenses are amortized over a
period of ten years.
The Income-tax liability is provided in accordance with the provisions
of the Income-tax Act, 1961.
Deferred tax is recognized, subject to the consideration of prudence,
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 subsequent periods.