(i) BASIS OF PREPARATION OF FINANCIAL STATEMENTS:
The financial statements have been prepared to comply in all material
respect with the mandatory Accounting standard issued by the Institute
of Chartered Accountants of India and the relevant provision of
Companies Act 1956. The Financial Statement have been prepared under
the historical cost convention on accrual basis except in case of
assets for which provision for impairment is made and valuation is
carried out. The Accounting policies have been consistently applied by
the Company and are consistent with those used in previous year.
(ii) FIXED ASSETS, DEPRECIATION & IMPAIRMENT LOSS:
Fixed Assets are stated at cost net of modvat/cenvat. The cost
includes all pre-operative expenses and the financing cost of borrowed
fund relating to the construction period in the case of new projects.
Depreciation has been provided on straight line basis at the rates
prescribed in Schedule XIV of the Companies Act. 1956.
The carrying amounts of the fixed assets are reviewed at each Balance
Sheet date to assess whether they are recorded in excess of their
recoverable amounts. In case the recoverable amount of the Fixed Assets
is lower than its carrying amount a provision is made for the
Long term investment are stated at cost, provision is made to recognize
a decline, other than temporary, in the value of long term investments.
The raw material & components, stores, packing materials and
work-in-progress are valued at cost and finished goods are valued at
lower of cost or net realizable value on First in First out basis.
Excise and Custom Duties payable in respect of finished goods/imported
material held in bond are provided for and consequently include cost of
conversion and other cost incurred in bringing the inventories to their
present location and conditions. Obsolete unserviceable and slow moving
inventories are duly recognized and provided.
(v) TRADE RECEIVABLES :
Trade Receivables are stated after making adequate provision for
doubtful debts / advances.
(vi) RECOGNITION OF INCOME AND EXPENDITURE:
a) All income and expenditure are accounted on accrual basis.
Sales are inclusive of Excise Duty, but net of Sales Tax, returns and
trade discounts. Revenue from sales is recognized on transfer of all
significant risk and rewards of ownership to the buyer.
(vii) RETIREMENT BENEFITS:
(a) Contribution to Provident Fund is made to Regional Provident Fund
Commissioner. Contributions towards Super Annuation Fund and Gratuity
are made to the schemes of Life Insurance Corporation of India based on
premium actuarially assessed and intimated in terms of the policies
taken with them. These contributions are charged to Profit & Loss
(b) Provision for incremental liability in respect of encashable
privilege leave is made on the basis of independent actuarial valuation
at the year end.
(viii) FOREIGN CURRENCY TRANSACTIONS:
Transactions in Foreign Currencies are recorded at the exchange rate
prevailing at the date of transaction. Foreign currency denominated
Current Assets and Current Liabilities at year end exchange rates. The
resulting gains or losses are recognised in the Statement of Profit &
Loss. The premia or gain/losses arising from forward cover transactions
are recognised in the Statement of Profit & Loss Account over the life
of the forward contract.
(ix) TAXES ON INCOME:
Income tax expenses comprise Current Tax and Deferred Tax charge or
credit. Provision for Current Tax is made on the assessable income at
the tax rate applicable to the relevant Assessment Year. The Deferred
Tax Asset and Deferred Tax Liability is calculated by applying tax rate
and tax laws that have been enacted or substantively enacted by the
Balance Sheet date. Deferred Tax Assets arising mainly on account of
brought forward losses and unabsorbed depreciation under tax laws, are
recognised, only if there is virtual certainty of its realization,
supported by convincing evidence. Deferred Tax Assets on account of
other timing differences are recognized, only to the extent there is a
reasonable certainty of its realization. At each Balance Sheet date,
the carrying amounts of Deferred Tax Assets are reviewed to reassure
(x) EARNINGS PER SHARE:
Basic earnings per share is calculated by dividing the net profit or
loss for the period attributable to equity shareholders by the weighted
average number of equity shares outstanding during the period. For the
purpose of calculating diluted earnings per share, the net profit or
loss for the period attributable to equity shareholders and weighted
average number of shares outstanding during the period are adjusted for
the effects of all dilutive potential equity shares.
(xi) CASH FLOW STATEMENT:
Cash flows are reported using the indirect method, where by profit
before tax is adjusted for effects of transactions of a non-cash
nature, any deferrals of past or future operating cash receipts or
payments and item of income or expenses associated with investing or
financing cash flows. The cash flows from operating, investing and
financing activities of the company are segregated.
(xii) EVENTS OCCURRING AFTER THE DATE OF BALANCE SHEET:
Events occurring after the date of the Balance Sheet, wherever
material, are considered up to the date of approval of accounts by the
Board of Directors.