| a. Basis of accounting: The financial statements are prepared under
the historical cost convention in accordance with the generally
accepted accounting principles in India and the provisions of the
Companies Act, 1956, except otherwise mentioned. The accounting
policies have been consistently applied by the Company and are
consistent with those in the previous years.
All assets and liabilities have been classified as current or
non-current as per the Company's normal operating cycle and other
criteria set out in the revised Schedule VI to the Companies Act, 1956.
Based on the nature of products and the time between the acquisition of
assets for processing and their realization in cash and cash
equivalents, the company has ascertained its operating cycle as 12
months for the purpose of current - non current classification of
assets and liabilities.
b. Fixed Assets: Fixed Assets are stated at cost net of Cenvat less
accumulated depreciation and impairment loss, if any. All costs till
commencement of commercial production attributable to fixed assets are
capitalised.
c. Capital work in Progress: All expenditure, including advance given
for capital expenditure are accumulated and shown as capital work in
progress until the assets are ready for commercial use. Assets under
construction are not depreciated.
d. Depreciation on Fixed Assets (Other than lease hold land) is
provided on straight line method at the rates and in the manner as
prescribed under schedule XIV of the Companies Act, 1956 on pro-rata
basis.
e. Impairment of Assets: The carrying amount of assets are reviewed at
each balance sheet date to determine, if there is any indication of
impairment based on internal/external factors. An asset is treated as
impaired when the carrying cost of the asset exceeds its recoverable
value i.e net selling price or value in use, whichever is higher. An
impairment loss, if any, is charged to profit & loss account in the
year in which an asset is identified as impaired.
f. Inventories: Inventories are valued at cost or net realisable value
whichever is less except scrap, which is valued at estimated realisable
value. Excise duty on goods manufactured by the company is included as
part of valuation of finished goods. Cost is determined using FIFO
basis.
g. Turnover: Turnover is inclusive of sales tax and excise duty
collected.
h. Taxes on Income: Provision for Income Tax is made for both current
and deferred taxes. Provision for current income tax is made on the
assessable income at the tax rate applicable to the relevant assessment
year. Deferred Tax resulting from 'timing difference' between the book
profit and taxable profit is accounted for using the tax rates and laws
that have been enacted or substantively enacted as on the balance sheet
date. The deferred tax asset is recognised and carried forward only to
the extent that there is a reasonable certainty that the assets will be
realised in future.
i. Retirement and other Employee Benefits:
a. Defined Contribution Plans : The company makes defined contribution
to E.S.I Scheme, which is recognised in the statement of profit & loss
on accrual basis.
b. Defined Benefit Plan: Gratuity is a defined benefit scheme and is
accounted based on actuarial valuation at the balance sheet date,
carried out once in three years by an independent actuary.
c. Short Term Employee Benefits: All employee benefits which are
wholly due within twelve months of rendering the services are
recognised in the period in which the employee rendered the related
services.
j. Provisions, Contingent Liabilities and Contingent Assets: The
company creates a provision when there is a present obligation as a
result of past events and it is probable that there will be outflow of
resources and a reliable estimate of the obligation can be made of the
amount of the obligation.
Contingent liabilities are not recognised but are disclosed in the
notes to the financial statements. 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.
Provisions are reviewed at each balance sheet date and adjusted to
reflect the current best estimate. If it is no longer probable that the
outflow of resources would be required to settle the obligation, the
provision is reversed.
Contingent assets are neither recognised nor disclosed in the financial
statements
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