A) Basis of Preparation of Financial Statements :
(i) The financial statements are prepared under the Historical Cost
Convention, on the accrual basis of accounting and in accordance with
the provisions of the Companies Act, 1956 and comply with the
Accounting Standards notified by the Companies (Accounting Standards)
Rules, 2006 and the relevant provisions of Companies Act, 1956.
(ii) Estimates and Assumptions used in preparation of the Financial
Statements are based upon Management''s evaluations of the relevant
facts and circumstances as of the date of the financial statements,
which may differ from the actual results at a subsequent date.
B) Fixed Assets and Depreciation :
(i) Fixed Assets :
Fixed Assets are stated at cost (net of Cenvat and sales tax credit )
of acquisition or construction or at manufacturing cost in case of
Company manufactured assets, less accumulated depreciation (except on
free hold land). The cost includes freight, duties, taxes, and
incidental expenses related to acquisition, installation, erection and
(ii) Depreciation :
a) Depreciation is provided as per the Written Down Value (w.d.v.)
method at the rates specified in Schedule XIV to the Companies Act,
b) Leasehold land ''s value is written off on the basis of the tenure.
c) Depreciation is provided on pro-rata basis on additions/deductions
during the year.
(iii) Liquidated Damage
Liquidated Damage , if any,are accounted for as and when recovery is
effected and matter is considered as settled by management and the same
is adjusted in the cost of relevant assets.
C) Investments :
Long term Investments are stated at cost. Provision is made to
recognise any diminution in the value, other than temporary, in the
carrying amount of any long term investments.
Current Investments are carried at lower of cost and fair value
determined on an individual investment basis.
D) Inventories :
Inventories are valued at the lower of cost (Value of cost is computed
on a weighted average basis) and estimated net realisable value.
Finished goods and work-in-progress include costs of conversion and
other costs incurred in bringing the inventories to their present
location and condition. Excise duty is included in the value of
finished goods inventory.
Carbon Credit is valued at Cost or estimated net realisable value
whichever is lower
E) Revenue Recognition
Sale of goods is recognised when the significant risks and rewards of
ownership of goods have passed on to the customers which is generally
on despatch of goods. Gross Sales include excise duty but excludes
sales tax and are net of discounts.
F) Employees Retirement Benefits :
Defined Contribution plans: The company makes specified monthly
contributions towards employee provident fund. Defined benefit plans:
The company''s gratuity and leave wages are defined benefit plans. The
present value of the obligation under such defined benefit plans is
determined based on acturial valuation using the projected unit credit
method, which recognises each period of services as giving rise to
additional unit of employee benefit entitlement and measure each unit
separately to build up the final obligation.
The obligation is measured at the present value of the estimated future
The discount rates used for determining the present value of the
obligation under defined benefit plans, is based on the market yields
on Government securities as at the balance sheet date.
Actuarial gains and losses are recognised immediately in the profit and
Short term employee benefits are recognized as an expense at the
undiscounted amount in the Profit and Loss Account in the year in which
the related service is rendered.
G) Foreign Currency Transactions :
Transactions in foreign currency are accounted at exchange rates
prevailing at the time of the transaction. All exchange gains / losses
arising out of such transactions are taken to profit and loss account.
Foreign currency monetary assets and liabilities are translated at the
exchange rates prevailing on the last working day of the accounting
H) Taxation :
Provision is made for income tax liability which may arise on the
results for the year at the current rate of tax in accordance with the
Income-tax Act, 1961.
The deferred tax for timing differences between the book profit and tax
profits for the year is accounted for using the tax rates enacted as of
the balance sheet date. Deferred tax assets arising from temporary
timing differences are recognised to the extent there is reasonable
certainty that the assets can be realised in future.
I) Segment Reporting:
a) Identification of Segments
The Company''s operating business are organised and managed separately
according to the nature of activity , with each segment representing a
strategic business unit that offers different activity.
b) Allocation of common costs
Common allocable costs are allocated to each segment according to the
sales of each segment to the total sales of the Company.
c) Unallocated items
Corporate assets and liabilities, income and expenses which relate to
the Company as a whole and are not allocable to segments, have been
included under unallocated items.
J) Impairment of Assets :
At each balance sheet date, the Company assesses whether there is any
indication that an asset may be impaired. If any such indication
exists, the Company estimates the recoverable amount. If the carrying
amount of the assets exceeds its recoverable amount, an impairment loss
is recognised in the profit and loss account to the extent the carrying
amount exceeds recoverable amount. During the year there was no
impairment of assets.
K) Provisions and Contingent Liabilities
a) Provisions in respect of present obligation arising out of past
events are made in the accounts when reliable estimates can be made
about the amount of obligation.
b) Contingent Liabilities are disclosed when there is a possible
obligation that may, but probably will not, require an outflow of
L) Earnings per Share
Basic and diluted earning per share is computed by dividing the net
profit attributable to equity share holders for the year, by the
weighted average number of equity shares outstanding during the year.
The estimate liability for product warranties is recorded when products
are sold. These estimates are established using historical information
on the nature, frequency and average cost of warranty claims and
mangement estimates regarding posible future incidence based on
corrective actions on product failures.