| a) Accounting Convention
The financial statements, other than the Cash Flow Statement, are
prepared under the historical cost convention, treating the entity as a
going concern and in accordance with the applicable accounting
standards and relevant provisions of the Companies Act, 2013.
b) Revenue Recognition
Revenue from domestic sale of goods is recognized at the time of
dispatch of goods from the factory. Sales are exclusive of VAT and CST.
Export sales are booked on the basis of the date of Bill of Lading.
c) Fixed Assets
Fixed Assets are stated at cost, net of taxes and duties subsequently
recoverable from government authorities less accumulated depreciation
and impairment loss, if any. Government grants relating to specific
fixed assets are treated as deferred income, which is recognized in the
Statement of Profit and Loss on a systematic basis over the useful life
of the asset.
All costs attributable to bringing the asset to its working condition
for its intended use, including financing costs till commencement of
commercial production and charges on foreign exchange contracts and
adjustments arising out of exchange rate variations attributable to the
fixed assets are capitalized.
d) Depreciation
Pursuant to the enactment of the companies Act 2013,the Company has
applied the estimated useful lives as specified in schedule II.
Accordingly the unamortized carrying value is being depreciated over
the revised/remaining useful lives. The written down value of fixed
assets whose lives have expired as at 1st April,2014 have been adjusted
net of taxes in the profit and loss by Rs. 584.21 lacs.
e) Inventories
Inventories are valued at cost or net realizable value, whichever is
lower. Raw Material and stores are valued at cost determined on a
weighted average basis. Work in process is valued at cost plus an
appropriate share of overheads depending upon the stage of completion.
Finished Goods are valued taking into account the raw material cost,
conversion cost and the overheads incurred to bring the goods to their
present location and condition.
f) Foreign Exchange Transactions Foreign Currency transactions are
accounted for at exchange rate prevailing on the date of transaction.
Premium on forward cover contracts in respect of import of raw
materials is charged to the Statement of Profit and Loss over the
period of contract. Amounts payable and receivable in foreign currency
at the Balance Sheet date, not covered by forward contracts, are
restated at the applicable exchange rate prevailing on the date of the
Balance Sheet. All exchange differences, if any, arising on revenue
transactions are charged/credited to the Statement of Profit and Loss.
g) Taxation
Provision for current tax is made in accordance with the provisions of
the Income Tax law applicable for the relevant year. Deferred tax
asset/liability is created in accordance with the requirements of
Accounting Standard 22 "Accounting for taxes on Income" issued by the
Institute of Chartered Accountants of India. Deferred Tax Asset is
created only to the extent there is virtual certainty that future
taxable income will be available against which such deferred tax asset
can be realized.
In terms of the Guidance Note on "Accounting for Credit available in
respect of Minimum Alternate Tax (MAT) under the Income Tax Act, 1961"
issued by the Institute of Chartered Accountants of India, MAT credit
is recognized as an asset only to the extent there is a convincing
evidence that the company will be paying regular income tax during the
specified period.
h) Employee Benefits
p(a) Short-Term Employee benefits
Employee benefits payable wholly within twelve months of rendering
services are classified as short term employee benefits and are
recognized in the period in which the employee renders the related
services.
(b) Post-employment benefits
Defined benefits Plans:
The employee gratuity scheme is a defined benefit plan. The present
value of defined benefit obligation as at the end of the year is
determined using the Projected Unit Credit method i.e. each period of
service rendered by the employee is considered to give rise to an
additional unit of benefit entitlement, gradually building up the final
obligation. he liability on account of compensated absences i.e. leave
with wages is accounted for on the basis of unutilized leave standing
to the credit of the employee at the close of the year. Defined
contribution Plans Contributions to the employees' provident fund,
which is a defined contribution plan, are recognized as expense in the
period in which the employee has rendered the services.
i) Provisions and contingencies
Provision is recognized in the balance sheet when, the company has a
present obligation as a result of past events and it is probable that
an outflow of economic resources will be required to settle the
obligations, and a reliable estimate of the amount of the obligation
can be made. A disclosure by way of 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 a
possible obligation or a present obligation that the likelihood of
outflow of resources is remote, no provision or disclosure is made.
Contingent assets are neither recognized nor disclosed in the financial
statements.
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