Basic of Preparation of Financial Statements.
The financial statements accounts of the Company are prepared on the
basis of historical cost convention expect for certain fi>ed assets
which are revalued, in accordance with the generally accepted
principles in india, Accounting Standards notified under Section.211
(3C) of the Companies Act, 1956 and the relevant provisions thereof.
Fixed Assets are stated at cost net of cenvat/value added tax and
includes amounts added on revaluations, less accumulated depreciation
and impairment loss, if any. All costs, including financing till
commencements of commercial production, net charges on foreign
exchanges contracts and adjustments arising from exchanges rate
variations attributable to the fixed assets are capitalised.
Depreciation on Fixed Assets is provided on Straight Line Method as per
the classification and in the manner specified in Schedile- XIV to the
Companies Act, 1956 Depreciation on Plant & Machinery is provided on
Straight Line Method basis as the plant is in a continuous process.
Use of Estimates.
The preparation of financial statements require 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 periods.
Difference between the actual results and estimates are recognised in
the period in which the results are known/materialised.
Inventories are valued as follows:
a) Finished Products produced and purchased by the Company are carried
at lower of cost and net realizable value.
b) Raw Material produced and purchases by the Company are carried at
lower of cost and net realizable value.
c) Work in Progress is carried at lower of cost and net realizable
d) Scrap is carried at lower of cost and net realizable value.
e) Stores and spare parts are carried at cost.
Cenvat credit on Excise Duty paid goods is accounted for by reducing
the purchase cost of related goods.
Foreign Currency Transactions
(a) Transactions denominated in foreign currencies are recorded at the
exchanges rate prevailing on the date of transaction.
(b) Monetary items denominated in foreign currencies at the year end
are restated at year ends rates. In case of items which are covered by
forward exchanges contracts, the difference between the year end rate
and rate on the date of the contracts is recognised as exchange
difference and the premium paid on forward contracts is recognised over
the life of the contract.