| (a) BASIS OF PREPARATION
The Financial Statements have been prepared in accordance with the
generally accepted accounting principles in India under the the
historical cost convention, on accrual basis, except for certain
tangible assets which are being carried at revalued amounts. These
financial statements have been prepared to comply in all material
aspects with the accounting standards notified under Section 211 (3C)
Companies Act' 1956 and on a going concern concept and the significant
policies followed by the Company are stated hereunder:
(b) TANGIBLE ASSETS
Tangible Assets are Stated at Cost including pre-operative expenses
allocated to respective assets in proportion to cost thereof.
(c) DEPRECIATION AND AMORTISATION
i) The full value of leasehold land is amortized over the period of
lease.
ii) Depreciation on Tangible Assets has been provided under
straight-line method on pro-rata basis at rates prescribed in Schedule
XIV of the Companies Act, 1956 (As amended).
iii) The total value of Intangible Assets are amortized over the
period of five Years.
(d) IMPAIRMENT OF ASSETS
An assets is treated as impaired when the carrying cost of assets
exceeds its recoverable value. An impairment loss is charged to the
Statement of Profit and Loss in the year in which an asset is
identified as impaired. The impairment loss recognized in prior
accounting period is reversed if there has been a change in the
estimate of recoverable amount.
(e) INVESTMENTS : At lower than the cost, after
writing down Permanent
diminution in value.
(f) INVENTORIES
Basis of Valuation
Raw Material : At Cost
Stores & Spare parts : At Weighted Average Cost
Work in Process & Finished Goods : At Cost or Market Value
whichever is lower, Cost for
this to purpose is determined
with reference to cost of
materials, labour and
appropriate Overhead.
Waste Stock : At estimated realizable value.
(g) FOREIGN EXCHANGE TRANSACTIONS
Foreign Exchange Transactions during the year are accounted for at
average rates of exchange of the month immediately preceding the month
of transactions. Exchange Loss or Gain on settlement made at rates
prevailing on the date of actual payments/realization is disclosed as
such in the Accounts. Debt/ Liabilities in foreign currencies remaining
unsettled at year end are converted at year end rates.
(h) BORROWING COSTS
Borrowing costs, if attributable to the acquisition and construction of
a qualifying asset are capitalized as part of cost of the asset.
Borrowing costs other than above nature are recognized as expenses in
the period in which these are incurred.
(i) EMPLOYEES BENEFITS
a) Defined Benefit Scheme: For defined benefit scheme the cost of
providing benefit is determined using the projected unit credit method
with actuarial valuation being carried out at each balance sheet date.
The retirement benefit obligation recognized in the balance sheet
represents the value of defined benefit obligation as reduced by fair
value of planned assets. Actuarial gain and losses are recognized
obligation in full during the period in which they occur.
b) Leave Encashment is accounted for an accrual basis.
(j) REVENUE RECOGNITION
Items of Income & Expenditure are recognized on accrual basis.
(k) SALES
Sales includes inter unit transfers.
(l) TAXATION
Current Tax if any, determined on the basis of the amount of tax
payable under the Income Tax Act, 1961.
Deferred Tax Liability/ Assets subject to consideration of prudence are
recognized & carried forward only when there is reasonable certainty
that sufficient taxable income will be available against which such
Deferred Tax Liabilities/Assets can be adjusted.
(m) PROVISION AND CONTINGENT LIABILITES:
The company recognizes a provision when there is a present obligation
as a result of a past event that probably requires an outflow of
resources and a reliable estimate can be made of the amount of the
obligation. A disclosure for a contingent liability is made when there
is a possible obligation or a present obligation that may, but probably
will not, require an outflow of resources. Where there is possible
obligation or a present obligation and the likelihood of outflow of
resources is remote, no provision or disclosure for contingent
liability is made. Contingent liabilities are generally not provided
for in the accounts and are disclosed separately in Notes on Accounts.
(n) EARNING PER SHARE
Basic earning per share is calculated by dividing the net profit or
loss for the period attributable to equity shareholders by weighted
average number of equity shares outstanding during the period. The
weighted average number of equity shares outstanding during the period
and for all periods presented is adjusted for the events, such as bonus
share, other than conversion of potential equity shares that have
changed the number of equity shares outstanding, without a
corresponding change in resources. For the purpose of calculating,
diluted earning per share, the net profit or loss for the period
attributable to equity shareholders and the weighted average number of
shares outstanding during the period is adjusted for the effects of all
dilutive potential equity shares.
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