a) Fixed Assets
i. Fixed Assets are stated at cost, less accumulated depreciation and
impairment loss (if any)
ii. Cost of Fixed Assets includes all incidental costs until the
assets are ready for their intended use.
iii. Cost of Fixed Assets not ready to use as on the Balance sheet date
are disclosed under Capital Work in Progress and Advances paid
towards acquisition of fixed assets outstanding as at Balance Sheet
date are disclosed as Capital Advances under Long term loan and
iv. Depreciation is calculated by Straight Line Method at rates
prescribed under the Schedule XIV of the Companies Act, 1956. In
respect of additions during the year, it is calculated on pro-rata
basis from the month of addition.
v. Impairment of Assets - The carrying amounts of assets are reviewed
at each balance sheet date, if there is any indication of impairment
based on internal/external factors. An impairment loss is recognized to
the extent of carrying amount is greater than the recoverable amount of
the asset. Recoverable amount is the higher of net selling price and
value in use.
b) Intangible assets are valued at cost, less accumulated amortization
and impairment loss (if any). Computer software is amortized over the
useful life of 6 years (as estimated by the Management).
i. Stock of finished goods is valued at lower of cost and net
realizable value. Cost includes raw material cost, excise duty, other
manufacturing expenses and depreciation.
ii. All other stocks are valued at cost or net realizable value,
whichever is lower. The cost includes expenses incurred in bringing
them to present location and condition excluding excise duty. The cost
formula used is weighted average.
i. Sales are inclusive of excise duty and exclusive of discounts and
returns, ii.Sales revenue is recognized at the time of dispatch of
e) Value of Import Entitlements is accounted for by reduction from cost
of raw materials in the year of export.
f) Employee Benefits
Contribution to Provident Fund is charged to accounts on accrual basis.
Provision for leave encashment and gratuity has been made on the basis
of actuarial valuation.
g) Foreign Currency Transactions
i. Foreign currency transactions are recorded at the exchange rates
prevailing on the date of transaction. Gain or loss arising out of
subsequent fluctuations is accounted for on actual payment or
ii. Monetary items denominated in foreign currency as at the Balance
Sheet date other than those covered by forward contracts, are converted
at exchange rates prevailing on that date and those covered by forward
contract are covered at Contracted Rate.
iii. Exchange differences relating to fixed assets are adjusted in the
cost of assets. Any other exchange differences are dealt with in the
profit & loss account.
iv. Forward Exchange Contracts :
The Company uses foreign currency forward contracts to hedge its risk
associated with foreign currency fluctuations relating to certain firm
The Company does not use derivative financial instruments for
h) Custom duty on goods stored in bonded warehouse is accounted for at
the time of clearance.
i. The provision for current tax is ascertained on the basis of
assessable profit computed in accordance with provisions of the Income
Tax Act, 1961.
ii. Deferred tax is recognized (subject to the consideration of
prudence) on timing differences (being the differences between the
taxable income and accounting income that originate in one period and
are capable of reversal in one or more subsequent periods).
j) Operating leases - Lease charges paid for operating leases are
charged to profit and loss account on straight line basis over the
The Company has issued only one class of equity shares having a par
value of Rs.10 per share. Each holder of Equity Share is entitled to
one vote per share. The Company declares and pays dividend in Indian
rupees. The dividend proposed by the Board of Directors is subject to
the approval of the shareholders at the Annual General Meeting.