SIGNIFICANT ACCOUNTING POLICIES 1.Basis of Accounting: The financial statements are brpared under historical cost convention in accordance with Indian Generally Accepted Accounting Principles (GAAPs), and materially comply with the mandatory accounting standards issued by the Institute of Chartered Accountants of India (ICAI) and the provisions of the Companies Act, 1956. 2.Fixed Assets: Fixed Assets are stated at cost of acquisition/construction net of CENVAT applicable CENVAT credit. The cost includes Purchase price and all other attributable costs of bringing the assets to its working condition for its intended use 3.Debrciation: a. Debrciation on fixed assets is provided on straight-line method at the rates specified in Schedule XIV to the Companies Act, 1956. No debrciation is charged on fixed assets where cumulative debrciation as on the beginning of year is either equivalent or more than the cost of assets. Individual assets purchased during the year and costing less than Rs.5,000/- are debrciated in full in the year of purchase. b. Debrciation has been provided on Triple shift working basis. 4.Basis of Valuation of Inventories: a. Raw Material :At lower of cost or net realizable value b. Work in Progress :At lower of estimated cost or net realizable value c. Finished Goods :At lower of cost or net realizable value d. Consumable, Stores, Oil & Fuel :At lower of cost or net realizable value 5.Recognition of Income and Expenditure: a. The revenue from sale of goods is recognized at the time of sale of goods. b. Expenditure is recognized on accrual basis. However, certain income/ expenses which are indeterminable are accounted for as and when settled/ finalized. 6.Retirement & Other Benefits a. Retirement Benefits The Gratuity and Leave Encashment is provided on yearly basis. The contribution to Provident Fund is made on monthly basis at brscribed rates. b. Other Benefits The Contribution to E.S.I. Fund is made on monthly basis at brscribed rates. The provision for the payment of Bonus is made as per the applicable rules. 7.Foreign Currency Transactions Transactions in foreign currencies for import and export of Raw materials, Capital goods and Finished goods are recorded at the rates brvailing on the date of transactions. Exchange gain or loss on conversion of liabilities incurred to acquire capital assets is adjusted to the cost of such assets. Exchange gain or losses on transactions of revenue nature are recognized in the Profit and Loss account. 8.Taxes on Income Income tax comprises of current tax and deferred tax. The deferred tax assets and liabilities are recognized for the future tax consequences of timing differences, subject to the consideration of prudence. Deferred tax assets and liabilities are measured using the tax rates enacted or substantively enacted by the Balance Sheet date. 9.Earning Per Share: Basic earning per share is calculated by dividing the net profit for the period attributable to equity shareholders by the number of equity shares outstanding at the year-end. 10.Events Occuring after the Balance Sheet Data Events occurring after the date of Balance Sheet are considered up to the date of finalization of accounts 11.Forward Contracts The company uses foreign exchange forward and options contracts to hedge its exposure to movements in foreign exchange rates. The use of these foreign exchange forward and options contracts reduce the risk or cost to the company and the company does not use those for trading or speculation purpose 12.Contingent Liabilities Liabilities which are material and whose future outcome cannot be ascertained with reasonable certainty are treated as Contingent Liabilities and same are disclosed in Notes on Accounts. |