(i) The financial statements are prepared in compliance with all
material aspects of the Accounting Standards notified under Companies
(Accounting Standards) Rules, 2006 by the Central Government of India
and the relevant provisions of the Companies Act, 1 956. (ii) The
financial statements are prepared on the basis of historical cost
convention, and on the accounting principles of a going concern. (iii)
All expenses and income to the extent ascertainable with reasonable
certainty are accounted for on accrual basis.
b) Use of Estimates:
The presentation of financial statements in conformity with generally
accepted accounting principles (GAAP) requires management make
estimates and assumptions that affects the reported amounts of assets
and liabilities and the disclosures of contingent liabilities on the
date of financial statements and reported amounts of revenue and
expenses for that year. Actual results could differ from those
estimates. Any revision to accounting estimates is recognised
c) Fixed Assets:
(i) Fixed assets are capitalised at cost inclusive of freight, duties,
taxes and all incidental expenses related thereto and net of cenvat
credit. (ii) Pre-operative expenses incurred during construction
period are allocated to various assets in proportion to their capital
cost. (iii) Fixed assets are stated at cost less accumulated
d) Depreciation / Amortisation:
(ii) Premium on leasehold land is being amortised over the period of
lease. OD Depreciation on fixed assets is provided on straight-line
method at the rates and in the manner as specified in Schedule XIV to
the Companies Act, 1 956. (iii) Continuous Process Plant as defined
in the said Schedule, has been considered on technical assessment and
depreciation provided accordingly.
Long-term investments are stated at cost of acquisition less provision
for permanent diminution in the value of such investments determined
for each investment individually. Current investments are valued at
lower of cost and fair value.
(i) Raw materials are valued at lower of cost and net realisable value.
Cost is computed on FIFO basis.
(ii) Finished goods and stock-in-process include estimated cost of
conversion and other costs incurred in bringing the inventories to
their present location and condition. (iii) Stores and spares are
charged to consumption in the year of procurement. (iv) Valuation of
stock in trade of shares is carried out at lower of its cost and quoted
market price, computed scrip wise. Cost is ascertained on FIFO basis.
g) Operating Cycle:
Assets and Liabilities have been classified in to current and
Non-Current based on the Operating Cycle.
h) Revenue Recognition:
Revenue from sales is recognised on dispatch of material and when risk
and reward are transferred to the customers. Revenue from sale of
shares is recognised on the basis of brokers contract note. -
i) Equity Derivative Transactions:
Profit / loss in respect of the contracts for equity index options
and/or commodity futures are accounted in the statement of profit and
loss on the expiry of the respective contract or on the same being
squared-off. In case of unsettled contracts for equity index options
as at the balance sheet date, mark-to-market position is recognised in
case of losses and ignored in case of profits, considering conservative
j) Accounting for Taxes on Income:
Provision for taxation comprises of current tax and deferred tax.
Current tax represents tax on Profits for the current year as
determined as per the provisions of the Income Tax Act, 1961.
The deferred tax for timing differences between the book and tax
profits for the year are accounted based on tax rates in force and tax
laws that have been enacted or substantively enacted as of the balance
sheet date. Deferred tax assets arising from timing differences, are
recognised to the extent there is reasonable / virtual certainty that
these would be realized in future and are reviewed for the
appropriateness of their respective carrying values at each balance
k) Borrowing Costs:
Borrowing Costs attributable to acquisition and construction of
qualifying assets are captalised as a part of the cost of such asset up
to the date when such asset is ready for its intended use. Other
borrowing costs are charged to the Statement of Profit and Loss.
I) Transactions in Foreign Currency:
Foreign currency transactions are recorded at the exchange rates
prevailing on the date of such transactions. Monetary assets and
liabilities as at the Balance Sheet date are translated at the rates of
exchange prevailing at the date of the Balance Sheet. Gains and losses
arising on account of differences in foreign exchange rates on
settlement/ translation of monetary assets and liabilities are
recognised in the Statement of Profit and Loss. Non-monetary foreign
currency items are carried at cost.
m) Retirement Benefits:
Liability in respect of retirement benefits is provided and charged to
the Statement of Profit and Loss on accrual basis as follows:
a) Provident / Pension Funds: At a specified percentage of salary /
wages for eligible employees.
b Leave Encashment: As determined on the basis of accumulated leave to
the credit of the employees as at the year end as per the Company''s
rules. c) Gratuity is provided in accordance with the provisions of
Accounting Standard (AS) - 15 Employee Benefits on the basis of
actuarial valuation carried out as at year end by an independent
n) Impairment of Assets:
The Company assesses at each balance sheet date whether there is any
indication that an asset may be impaired. If any such indication
exists, the management estimates the recoverable amount of the asset.
If such recoverable amount of the asset is less than its carrying
amount, the carrying amount is reduced to ts recoverable amount. The
reduction is treated as an impairment loss and recognised in the
Statement of Profit and Loss. If at the balance sheet date there is an
indication that if a previously assessed impairment loss no longer
exists, the recoverable amount is reassessed and the asset is reflected
at the recoverable amount subject to a maximum of depreciated
o) Accounting for Provisions and Contingent Liabilities:
The Company creates a provision when there is a present obligation as a
result of a past event that probably requires an outflow of resources
and a reliable estimate can be made of the amount of the obligation. A
disclosure for a contingent liability is made when there is a possible
obligation or a present obligation that may, but probably will not,
require an outflow of resources.