(a) Use of Estimates - The presentation of financial statements is in
conformity with the generally accepted accounting principles requires
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 period.
Difference between the actual and the estimates are recognized in the
period in which the results are known / materialized.
(b) Fixed Assets - Fixed assets are stated at cost of acquisition or
construction, net of cenvat / value added tax, less accumulated
depreciation. All costs, including trial production and financing costs
till commencement of commercial production are capitalized.
(c) Depreciation - Depreciation on fixed assets is provided at the
rates and in the manner specified in Schedule XIV of the Companies Act,
1956, on written down value method.
(d) Investments - Long term investments are carried at cost. Provision
for diminution in the value of long term investments is made only if
such a decline is other than temporary in the opinion of management.
Current investments are carried at the lower of costs and market value
/ net assets value, computed individually.
(e) Inventories - In general, all inventories of finished goods,
work-in-progress etc., are stated at lower of cost or net realisable
value. Cost of inventories comprise of all cost of purchase, cost of
conversion and other cost incurred in bringing the inventory to their
present location and condition. Raw material and stores and spares are
stated at cost on FIFO basis. Scrap is valued at estimated net
realisable value. Inventories of finished goods and scrap includes
excise duty whenever applicable.
(f) Foreign Currency Transaction - (i) Transactions denominated in
foreign currencies are normally recorded at the exchange rate
prevailing at the time of the transaction.
(ii) Monitory items denominated in foreign currencies at the year end
are restated at the year end rates.
(iii) Non-monetary foreign currency items are carried at cost.
Any income or expense on account of exchange difference either on
settlement or on translation is recognised in the Profit and Loss
(g) Preliminary Expenses - The preliminary expenses are amortized /
charged to the profit and loss account over a period of ten years.
(h) Turnover - Turnover include sales of scrap, service charges, export
incentive and excise duty but excludes sales tax / value added tax.
(i) Borrowing Cost - Borrowing costs that are attributable to the
acquisition or construction of qualifying assets are capitalized as
part of the cost of such assets. A qualifying asset is one that
necessarily takes substantial period of time to get ready for intended
use. All other borrowing costs are charged to revenue.
(j) Impairment of Assets - An asset is treated as impaired when the
carrying cost of asset exceeds its recoverable value. An impairment
loss is charged to the Profit and Loss account in the year in which an
asset is identified as impaired. The impairement loss recognized in
prior accounting periods is reversed if there has been a change in the
estimate of the recoverable amount.
(k) Provision, Contingent Liabilities and Contingent Assets - Provision
involving substantial degree of estimation in measurement is recognized
when there is present obligation as a result of past events and it is
probable that there will be an outflow of resources. Contingent
Liabilities are not recognized but are disclosed in the notes.
Contingent Assets neither recognized nor disclosed in the financial