| A. ACCOUNTING CONCEPTS
The company follows mercantile system of accounting, recognizing income
and expenditure on accrual basis. The accounts are prepared on
historical cost basis and as a going concern. Accounting policies are
consistent with generally accepted accounting principles.
B. FIXED ASSETS
Fixed assets are stated at cost less the accumulated depreciation. The
cost of assets is inclusive of Freight, duties, taxes etc. except
excise duty levied thereon which has been reduced from the cost of
respective assets.
C. DEPRECIATION
Depreciation has been calculated on straight line method at the rates
given in schedule XIV to the companies Act,1956 Depreciation on
additions during the year has been provided on pro rata basis with
reference to the date on which assets is put to use. Depreciation on
plant & machinery has been provided by applying rate applicable to
continuous process plant.
D. REVENUE RECOGNITION
Revenue from sale of good is recognised upon passing of title of goods
to the customers which generally coincides with the delivery. Sales
include sales value of goods, Excise duty, cess & Education cess there
on. Other incomes are accounted for on accrual basis.
E. INVENTORIES
Inventories are valued on the basis given below:
(i) Raw material, chemicals, packing materials and stores & spares
parts are valued at lower of cost & net realisable value. Cost is
computed by applying yearly average cost.
(ii) Stock in process is valued at estimated cost.
(iii) Finished goods are valued at cost or market price, which ever is
lower.
F. STORES & SPARES
Stores & Spares consumed includes tools and implements.
G. INVESTMENTS
Long term Investments are stated at cost less permanent diminution in
value of such investments (if any).
H. INSURANCE CLAIMS
Insurance claims are accounted for when the measurability and the
collectability is established with reasonable certainty.
I. FORIEGN CURRENCY TRANSACTIONS.
All transactions related to import of waste paper, chemicals and spares
have been accounted for at the rate debited by bankers of the company.
Monetary assets and liabilities related to foreign currency transaction
remaining unsettled at the year end are translated at the rate the
payment is made subsequently.
J. BORORROWING COSTS
Borrowing cost specifically identified to the acquisition or
construction of a qualifying asset is capitalized as part of such
asset. A qualifying asset is one that necessarily takes substantial
period of time to get ready for its intended use. All other borrowing
costs are charged to profit & Loss account.
K. PROVISIONS, CONTINGENT LIABILITIES & CONTINGENT ASSETS
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent assets are neither recognized nor disclosed in the financial
statements. Contingent liabilities, if material, are disclosed by way
of notes.
L. EXPORT INCENTIVES
Credits against Duty Entitlement pass book is accounted for at the time
the company becomes eligible to receive entitlements.
M. GRATUITY AND LEAVE ENCASHMENT
Gratuity is provided as per acturial valuation. Leave encashment
provision is made for unutilized leave due to employees at the end of
the year.
N. DEFERRED TAX
Provisions for current tax is made as per the provisions of the Income
Tax Act 1961. Deferred tax liability/ Assets resulting from Timing
difference between book and taxable profits is accounted for
considering the tax rate and laws that have been substantively been
enacted by the balance sheet date. Deferred Tax Assets is recognized
and carried forward only to the extent that there is reasonable
certainty that the assets will be realized in future.
O. RESIDUARY
Accounting policies not specifically mentioned are consistent with
generally accepted accounting practices.
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