a) BASIS OF PREPARATION OF FINANCIAL STATEMENTS:
i) The financial statements are prepared under the historical cost
convention in accordance with the generally accepted accounting
principles in India, the applicable Accounting Standards issued by the
Institute of Chartered Accountants of India and relevant presentational
requirements of the Companies Act, 1956.
ii) Accounting policies not specifically referred to otherwise are in
consonance with prudent accounting principles.
iii) All income and expenditure items having material bearing on the
financial statements are recognized on accrual basis.
b) FIXED ASSETS
Fixed Assets are stated at acquisition cost (Net of Modvat / cenvat, if
any) including directly attributable cost of bringing them to their
respective working conditions for the intended use less accumulated
depreciation. All costs, including financing/borrowing cost till
commencement of commercial production attributable to the fixed assets
have been capitalized.
C) REVENUE RECOGNITION
All revenue income and expenditure are recognized on accrual concept of
Sale of Precured Tread Rubber
Revenue is recognized when significant risks and rewards of ownership
of goods have passed to the buyer and is disclosed including Excise
Duty and Sales tax and excluding returns, as applicable.
Interest income is recognized on a time proportion basis taking into
account the amount outstanding and the rate applicable.
Depreciation on fixed assets has been provided on straight-line method
at the rates specified in Schedule XIV of the Companies Act, 1956 on
Inventories are valued at lower of cost or net realizable value. Cost
is determined using FIFO method.
f) FOREIGN CURRENCY TRANSACTIONS
Transactions denominated in foreign currencies are normally recorded at
the exchange rate prevailing at the time of the transaction.
Forward contracts for hedging: The company uses foreign exchange
forward contracts to hedge its exposure to movements in foreign
exchange rates. The use of these foreign exchange forward contracts
reduces the risk or cost to the company and the company does not use
the foreign exchange forward contracts for speculation purposes.
The premium arising at the inception of such a forward exchange
contract be amortized as expense over the life of the contract.
Investments made by the company are primarily of long term nature and
are value at cost. Provision will be made for decline, other than
temporary, in the value of investments.
h) BORROWING COSTS
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 cost are charged to revenue.
i) EMPLOYEE BENEFITS
Gratuity: Liability towards gratuity is provided on the basis of
actuarial valuation made by an independent actuary.
Provident Fund: Contributions paid to the prescribed authority are
charged to revenue every year.
Leave Encashment: is at the discretion of the management and is charged
to revenue in the year of payment.
j) EARNING PER SHARE
The Company reports its Earnings per Share (EPS) in accordance with
Accounting Standard 20 issued by the Institute of Chartered Accountants
k) TAXES ON INCOME
The current charge for income tax is calculated in accordance with the
relevant tax regulations applicable to the company.
Deferred tax asset and liability is recognized for future tax
consequences attributable to the timing differences that result between
the profit offered for income tax and the profit as per the financial
statements. Deferred tax asset & liability are measured as per the tax
rates / laws that have been enacted or substantively enacted by the
Balance Sheet date.
I) PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as 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 are neither recognized nor disclosed in the