Mar 31, 2015
A. Basis of Preparation of Financial Statements
a) The financial statements have been prepared under the historical
cost convention in accordance with the generally accepted accounting
principles and the provisions of the Companies Act subject to what is
stated herein below, as adopted consistently by the company.
b) The company generally follows mercantile system of accounting and
recognizes significant items of income and expenditure on accrual
basis.
B. Fixed Assets
Fixed assets are stated at cost of acquisition inclusive of inward
freight, duties & taxes and incidental expenses relating to acquisition
and are net of modvat credit. In respect of major projects, related
pre-operational expenses form part of the value of assets capitalized.
C. Depreciation
Depreciation is calculated on fixed assets on 'Straight Line Method' in
accordance with Schedule II of the Companies Act, 2013.
D. Foreign Currency Transactions, Derivatives Instruments and hedge
Accounting
a) Transactions denominated in foreign currencies are normally recorded
at the exchange rate prevailing at the time of the transaction.
b) Items denominated in foreign currencies at the year end and not
covered by forward exchange contracts are translated at year end rates
and those covered by forward exchange contracts are translated at the
rate ruling at the date of transaction as increased or decreased by the
proportionate difference between the forward rate and exchange rate on
the date of transaction, such difference having been recognized over
the life of the contract.
c) Any income or expense on account of exchange difference either on
settlement or on translation is recognized in the profit or loss
statement.
d) The company uses foreign currency forward contracts and currency
options to hedge its risks associated with foreign currency
fluctuations relating to certain firm commitments and forecasted
transactions. Derivative instruments are initially measured at fair
value and are re-measured at subsequent reporting dates. Mark to market
losses on such measurement are recognized in the profit & loss
statement.
E. Investments
a) Long term investments are stated at cost. Provision for diminution
in the value of long term investments is made only if such a decline is
other than temporary in the opinion of the management
b) Current investments are valued at cost or market value whichever is
lower. The decline in the value of current investments is provided in
the accounts each year
F. Inventories
Inventories are valued at lower of cost or market price except for
waste. Waste is valued at realizable value. The cost comprises of cost
of purchase, cost of conversion and other cost including appropriate
production overheads incurred in bringing such inventories to their
present location. In case of raw materials and stores & spares the cost
is determined using FIFO method.
G. Sales
Sales are inclusive of recovery of excise duty and packing charges and
net of returns and sales tax.
H. Taxes, Duties etc.
Excise duty has been accounted on the basis of both payments made in
respect of goods cleared as also provision made for goods lying in
bonded warehouses. Provision is made for goods meant for sale in
domestic tariff area only.
I. Employee Retirement Benefits
Company's contribution to state plans are charged to revenue every
year. Liability to defined benefit plans is determined on the basis of
an actuarial valuation at the end of the year. Actuarial gains and
losses comprises experience adjustments and the effect of changes in
actuarial assumptions and are recognized immediately in the profit and
loss statement as income or expense.
J. Borrowing Cost
Interest and other costs in connection with the borrowing of the funds
to the extent related / attributed to the acquisition /construction of
qualifying fixed assets are capitalized upto the date when such assets
are ready for its intended use and other borrowing cost are charged to
profit & loss statement.
K. Earning per Share
Basic earning per share is calculated by dividing the net profit for
the year attributable to equity shareholders by the weighted average
number of equity shares outstanding during the year.
Diluted earning per share is calculated by dividing the net profit
attributable to equity shareholders by the weighted average number of
equity shares outstanding during the year (adjusted for the effects of
dilutive options).
L. Deferred Taxation
Deferred taxation is provided using the liability method in respect of
the taxation effect arising from all material timing differences
between the accounting and tax treatment of income and expenditure
which are expected with reasonable probability to crystallize in the
foreseeable future.
Deferred tax benefits are recognized in the financial statements only
to the extent of any deferred tax liability or when such benefits are
reasonably expected to be realizable in the near future.
M. Impairment of Assets
Impairment loss is provided to the extent the carrying amount of assets
exceeds their recoverable amount. Recoverable amount is the higher of
an asset's net selling price and its value in use. Value in use is the
present value of estimated future cash flows expected to arise from the
continuing use of an asset and from its disposal at the end of its
useful life.
N. Operating Lease
Operating lease receipts and payments are recognized as income or
expenses in the profit and loss statement on a straight line basis over
the lease term.
O. Contingent Liabilities
Contingent liabilities not provided for in the accounts are separately
shown in the Annual Statement of Accounts.
P. Events occurring after Balance Sheet date
Events occurring after the Balance Sheet date have been considered in
the preparation of financial statements.
Mar 31, 2014
A. Basis of Preparation of Financial Statements
a) The financial statements have been prepared under the historical
cost convention in accordance with the generally accepted accounting
principles and the provisions of the Companies Act, 1956, subject to
what is stated herein below, as adopted consistently by the company.
b) The company generally follows mercantile system of accounting and
recognizes significant items of income and expenditure on accrual
basis.
B. Fixed Assets
Fixed assets are stated at cost of acquisition inclusive of inward
freight, duties & taxes and incidental expenses relating to acquisition
and are net of modvat credit. In respect of major projects, related
pre-operational expenses form part of the value of assets capitalized.
C. Depreciation
Depreciation is calculated on fixed assets on ''Straight Line Method''
in accordance with Schedule XIV of the Companies Act, 1956 as under:
a) In respect of Plant & Machinery by applying the revised rates in
force in terms of the notification dated 16.12.1993. Based upon legal
opinion depreciation has been provided at the rate prescribed for
continuous process plant.
b) In respect of other assets at the rates in force prior to the above
mentioned notification and at the revised rates on assets acquired
thereafter.
D. Foreign Currency Transactions, Derivatives Instruments and hedge
Accounting
a) Transactions denominated in foreign currencies are normally recorded
at the exchange rate prevailing at the time of the transaction.
b) Items denominated in foreign currencies at the year end and not
covered by forward exchange contracts are translated at year end rates
and those covered by forward exchange contracts are translated at the
rate ruling at the date of transaction as increased or decreased by the
proportionate difference between the forward rate and exchange rate on
the date of transaction, such difference having been recognized over
the life of the contract.
c) Any income or expense on account of exchange difference either on
settlement or on translation is recognized in the statement of profit &
loss.
d) The company uses foreign currency forward contracts and currency
options to hedge its risks associated with foreign currency
fluctuations relating to certain firm commitments and forecasted
transactions. Derivative instruments are initially measured at fair
value and are re-measured at subsequent reporting dates. Mark to market
losses on such measurement are recognized in the statement of profit &
loss.
E. Investments
a) Long term investments are stated at cost. Provision for diminution
in the value of long term investments is made only if such a decline is
other than temporary in the opinion of the management.
b) Current investments are valued at cost or market value whichever is
lower. The decline in the value of current investments is provided in
the accounts each year.
F. Inventories
Inventories are valued at lower of cost or market price except for
waste. Waste is valued at realizable value. The cost comprises of cost
of purchase, cost of conversion and other cost including appropriate
production overheads incurred in bringing such inventories to their
present location. In case of raw materials and stores & spares the cost
is determined using FIFO method.
G Sales
Sales are inclusive of recovery of excise duty and packing charges and
net of returns and sales tax.
H. Taxes, Duties etc.
Excise duty has been accounted on the basis of both payments made in
respect of goods cleared as also provision made for goods lying in
bonded warehouses. Provision is made for goods meant for sale in
domestic tariff area only.
I. Employee Retirement Benefits
Company''s contribution to state plans are charged to revenue every
year. Liability to defined benefit plans is determined on the basis of
an actuarial valuation at the end of the year. Actuarial gains and
losses comprises experience adjustments and the effect of changes in
actuarial assumptions and are recognized immediately in the statement
of profit and loss as income or expense.
J. Borrowing Cost
Interest and other costs in connection with the borrowing of the funds
to the extent related / attributed to the acquisition / construction of
qualifying fixed assets are capitalized upto the date when such assets
are ready for its intended use and other borrowing cost are charged to
profit & loss account.
K. Earning per Share
Basic earning per share is calculated by dividing the net profit for
the year attributable to equity shareholders by the weighted average
number of equity shares outstanding during the year.
Diluted earning per share is calculated by dividing the net profit
attributable to equity shareholders by the weighted average number of
equity shares outstanding during the year (adjusted for the effects of
dilutive options).
L. Deferred Taxation
Deferred taxation is provided using the liability method in respect of
the taxation effect arising from all material timing differences
between the accounting and tax treatment of income and expenditure
which are expected with reasonable probability to crystallize in the
foreseeable future.
Deferred tax benefits are recognized in the financial statements only
to the extent of any deferred tax liability or when such benefits are
reasonably expected to be realizable in the near future.
M. Impairment of Assets
Impairment loss is provided to the extent the carrying amount of assets
exceeds their recoverable amount. Recoverable amount is the higher of
an asset''s net selling price and its value in use. Value in use is the
present value of estimated future cash flows expected to arise from the
continuing use of an asset and from its disposal at the end of its
useful life.
N. Operating Lease
Operating lease receipts and payments are recognized as income or
expenses in the statement of profit and loss on a straight line basis
over the lease term.
O. Contingent Liabilities
Contingent liabilities not provided for in the accounts are separately
shown in the Annual Statement of Accounts.
P. Events occurring after Balance Sheet date
Events occurring after the Balance Sheet date have been considered in
the preparation of financial statements.
Mar 31, 2013
A. Basis of Preparation of Financial Statements
a) The financial statements have been prepared under the historical
cost convention in accordance with the generally accepted accounting
principles and the provisions of the Companies Act, 1956, subject to
what is stated herein below, as adopted consistently by the company.
b) The company generally follows mercantile system of accounting and
recognizes significant items of income and expenditure on accrual
basis.
B. Fixed Assets
Fixed assets are stated at cost of acquisition inclusive of inward
freight, duties & taxes and incidental expenses relating to acquisition
and are net of modvat credit. In respect of major projects, related
pre-operational expenses form part of the value of assets capitalized.
C. Depreciation
Depreciation is calculated on fixed assets on ''Straight Line Method'' in
accordance with Schedule XIV of the Companies Act, 1956 as under :
a) In respect of Plant & Machinery by applying the revised rates in
force in terms of the notification dated 16.12.1993. Based upon legal
opinion depreciation has been provided at the rate prescribed for
continuous process plant.
b) In respect of other assets at the rates in force prior to the above
mentioned notification and at the revised rates on assets acquired
thereafter.
D. Foreign Currency Transactions, Derivatives Instruments and hedge
Accounting
a) Transactions denominated in foreign currencies are normally recorded
at the exchange rate prevailing at the time of the transaction.
b) Items denominated in foreign currencies at the year end and not
covered by forward exchange contracts are translated at year end rates
and those covered by forward exchange contracts are translated at the
rate ruling at the date of transaction as increased or decreased by the
proportionate difference between the forward rate and exchange rate on
the date of transaction, such difference having been recognized over
the life of the contract.
c) Any income or expense on account of exchange difference either on
settlement or on translation is recognized in the profit and loss
statement.
d) The company uses foreign currency forward contracts and currency
options to hedge its risks associated with foreign currency
fluctuations relating to certain firm commitments and forecasted
transactions. Derivative instruments are initially measured at fair
value and are re-measured at subsequent reporting dates. Mark to market
losses on such measurement are recognized in the profit and loss
statement.
E. Investments
a) Long term investments are stated at cost. Provision for diminution
in the value of long term investments is made only if such a decline is
other than temporary in the opinion of the management.
b) Current investments are valued at cost or market value whichever is
lower. The decline in the value of current investments is provided in
the accounts each year.
F. Inventories
Inventories are valued at lower of cost or market price except for
waste. Waste is valued at realizable value. The cost comprises of cost
of purchase, cost of conversion and other cost including appropriate
production overheads incurred in bringing such inventories to their
present location. In case of raw materials and stores & spares the cost
is determined using FIFO method.
G. Sales
Sales are inclusive of recovery of excise duty and packing charges and
net of returns and sales tax.
H. Taxes, Duties etc.,
Excise duty has been accounted on the basis of both payments made in
respect of goods cleared as also provision made for goods lying in
bonded warehouses. Provision is made for goods meant for sale in
domestic tariff area only.
I. Employee Retirement Benefits
Company''s contribution to state plans are charged to revenue every
year. Liability to defined benefit plans is determined on the basis of
an actuarial valuation at the end of the year. Actuarial gains and
losses comprises experience adjustments and the effect of changes in
actuarial assumptions and are recognized immediately in the profit and
loss statement as income or expense.
J. Borrowing Cost
Interest and other costs in connection with the borrowing of the funds
to the extent related / attributed to the acquisition / construction of
qualifying fixed assets are capitalized upto the date when such assets
are ready for its intended use and other borrowing cost are charged to
profit and loss statement.
K. Earning per Share
Basic earning per share is calculated by dividing the net profit for
the year attributable to equity shareholders by the weighted average
number of equity shares outstanding during the year.
Diluted earning per share is calculated by dividing the net profit
attributable to equity shareholders by the weighted average number of
equity shares outstanding during the year (adjusted for the effects of
dilutive options).
L. Deferred Taxation
Deferred taxation is provided using the liability method in respect of
the taxation effect arising from all material timing differences
between the accounting and tax treatment of income and expenditure
which are expected with reasonable probability to crystallize in the
foreseeable future.
Deferred tax benefits are recognized in the financial statements only
to the extent of any deferred tax liability or when such benefits are
reasonably expected to be realizable in the near future.
M. Impairment of Assets
Impairment loss is provided to the extent the carrying amount of assets
exceeds their recoverable amount. Recoverable amount is the higher of
an asset''s net selling price and its value in use. Value in use is the
present value of estimated future cash flows expected to arise from the
continuing use of an asset and from its disposal at the end of its
useful life.
N. Operating Lease
Operating lease receipts and payments are recognized as income or
expenses in the profit and loss statement on a straight line basis over
the lease term.
O. Contingent Liabilities
Contingent liabilities not provided for in the accounts are separately
shown in the Annual Statement of Accounts.
P. Events occurring after Balance Sheet date
Events occurring after the Balance Sheet date have been considered in
the preparation of financial statements.
Mar 31, 2012
A. Basis of Preparation of Financial Statements
a) The financial statements have been prepared under the historical
cost convention in accordance with the generally accepted accounting
principles and the provisions of the Companies Act, 1956, subject to
what is stated herein below, as adopted consistently by the company.
b) The company generally follows mercantile system of accounting and
recognizes significant items of income and expenditure on accrual
basis.
B. Fixed Assets
Fixed assets are stated at cost of acquisition inclusive of inward
freight, duties & taxes and incidental expenses relating to acquisition
and are net of modvat credit. In respect of major projects, related
pre-operational expenses form part of the value of assets capitalized.
C. Depreciation
Depreciation is calculated on fixed assets on 'Straight Line Method' in
accordance with Schedule XIV of the Companies Act, 1956 as under :
a) In respect of Plant & Machinery by applying the revised rates in
force in terms of the notification dated 16.12.1993. Based upon legal
opinion depreciation has been provided at the rate prescribed for
continuous process plant.
b) In respect of other assets at the rates in force prior to the above
mentioned notification and at the revised rates on assets acquired
thereafter.
D. Foreign Currency Transactions, Derivatives Instruments and hedge
Accounting
a) Transactions denominated in foreign currencies are normally recorded
at the exchange rate prevailing at the time of the transaction.
b) Items denominated in foreign currencies at the year end and not
covered by forward exchange contracts are translated at year end rates
and those covered by forward exchange contracts are translated at the
rate ruling at the date of transaction as increased or decreased by the
proportionate difference between the forward rate and exchange rate on
the date of transaction, such difference having been recognized over
the life of the contract.
c) Any income or expense on account of exchange difference either on
settlement or on translation is recognized in the profit or loss
account.
d) The company uses foreign currency forward contracts and currency
options to hedge its risks associated with foreign currency
fluctuations relating to certain firm commitments and forecasted
transactions. Derivative instruments are initially measured at fair
value and are re-measured at subsequent reporting dates. Mark to market
losses on such measurement are recognized in the profit & loss account.
E. Investments
a) Long term investments are stated at cost. Provision for diminution
in the value of long term investments is made only if such a decline is
other than temporary in the opinion of the management.
b) Current investments are valued at cost or market value whichever is
lower. The decline in the value of current investments is provided in
the accounts each year.
F. Inventories
Inventories are valued at lower of cost or market price except for
waste. Waste is valued at realizable value. The cost comprises of cost
of purchase, cost of conversion and other cost including appropriate
production overheads incurred in bringing such inventories to their
present location. In case of raw materials and stores & spares the cost
is determined using FIFO method.
G. Sales
Sales are inclusive of recovery of excise duty and packing charges and
net of returns and sales tax.
H. Taxes, Duties etc.
Excise duty has been accounted on the basis of both payments made in
respect of goods cleared as also provision made for goods lying in
bonded warehouses. Provision is made for goods meant for sale in
domestic tariff area only.
I. Employee Retirement Benefits
Company's contribution to state plans are charged to revenue every
year. Liability to defined benefit plans is determined on the basis of
an actuarial valuation at the end of the year. The actuarial valuation
is recognized as an expenses. Actuarial gains and losses comprises
experience adjustments and the effect of changes in actuarial
assumptions and are recognized immediately in the profit and loss
account as income or expense.
J. Borrowing Cost
Interest and other costs in connection with the borrowing of the funds
to the extent related / attributed to the acquisition / consumption of
qualifying fixed assets are capitalized upto the date when such assets
are ready for its intended use and other borrowing cost are charged to
profit & loss account.
K. Earning per Share
Basic earning per share is calculated by dividing the net profit for
the year attributable to equity shareholders by the weighted average
number of equity shares outstanding during the year.
Diluted earning per share is calculated by dividing the net profit
attributable to equity shareholders by the weighted average number of
equity shares outstanding during the year (adjusted for the effects of
dilutive options).
L. Deferred Taxation
Deferred taxation is provided using the liability method in respect of
the taxation effect arising from all material timing differences
between the accounting and tax treatment of income and expenditure
which are expected with reasonable probability to crystallize in the
foreseeable future.
Deferred tax benefits are recognized in the financial statements only
to the extent of any deferred tax liability or when such benefits are
reasonably expected to be realizable in the near future.
M. Impairment of Assets
Impairment loss is provided to the extent the carrying amount of assets
exceeds their recoverable amount. Recoverable amount is the higher of
an asset's net selling price and its value in use. Value in use is the
present value of estimated future cash flows expected to arise from the
continuing use of an asset and from its disposal at the end of its
useful life.
N. Operating Lease
Operating lease receipts and payments are recognized as income or
expenses in the profit and loss account on a straight line basis over
the lease term.
O. Contingent Liabilities
Contingent liabilities not provided for in the accounts are separately
shown in the Annual Statement of Accounts.
P. Events occurring after Balance Sheet date
Events occurring after the Balance Sheet date have been considered in
the preparation of financial statements.
During the year Board for Industrial and Financial Reconstruction
(BIFR) has sanctioned a rehabilitation scheme for the company vide its
order dated 17.2.2012. In the said scheme BIFR has approved derating
and consolidation of equity shares of the company. Consequently 5556506
equity shares of Rs.10 each fully paid up has been derated by 60% into
5556506 equity shares of Rs.10 each, Rs. 4 paid up and then
consolidated into 2222602 equity shares of Rs. 10 each fully paid up.
Similarly, 1500000 equity shares of Rs.10 each (Re 1 called & paid up)
has been derated by 60% into 1500000 equity shares of Rs. 10 each, Re.
0.40 paid up and then consolidated into 150000 equity shares of Rs.10
each, Rs. 4 paid up. The gain of Rs. 34239040 on such derating and
consolidation has been included in Capital Reserve. The balance amount
of Rs.6 due on 150000 equity shares has been called and paid.
Mar 31, 2011
A. Basis of Preparation of Financial Statements
a) The financial statements have been prepared under the historical
cost convention in accordance with the generally accepted accounting
principles and the provisions of the Companies Act, 1956, subject to
what is stated herein below, as adopted consistently by the company.
b) The company generally follows mercantile system of accounting and
recognizes significant items of income and expenditure on accrual
basis.
B. Fixed Assets
Fixed assets are stated at cost of acquisition inclusive of inward
freight, duties & taxes and incidental expenses relating to acquisition
and are net of modvat credit. In respect of major projects, related
pre-operational expenses form part of the value of assets capitalized.
C. Depreciation
Depreciation is calculated on fixed assets on ÃStraight Line Methodà in
accordance with Schedule XIV of the Companies Act, 1956 as under :
a) In respect of Plant & Machinery by applying the revised rates in
force in terms of the notification dated 16.12.1993. Based upon legal
opinion depreciation has been provided at the rate prescribed for
continuous process plant.
b) In respect of other assets at the rates in force prior to the above
mentioned notification and at the revised rates on assets acquired
thereafter.
D. Foreign Currency Transactions, Derivatives Instruments and hedge
Accounting
a) Transactions denominated in foreign currencies are normally recorded
at the exchange rate prevailing at the time of the transaction.
b) Items denominated in foreign currencies at the year end and not
covered by forward exchange contracts are translated at year end rates
and those covered by forward exchange contracts are translated at the
rate ruling at the date of transaction as increased or decreased by the
proportionate difference between the forward rate and exchange rate on
the date of transaction, such difference having been recognized over
the life of the contract.
c) Any income or expense on account of exchange difference either on
settlement or on translation is recognized in the profit or loss
account.
d) The company uses foreign currency forward contracts and currency
options to hedge its risks associated with foreign currency
fluctuations relating to certain firm commitments and forecasted
transactions. Derivative instruments are initially measured at fair
value and are re-measured at subsequent reporting dates. Mark to market
losses on such measurement are recognized in the profit & loss account.
E. Investments
a) Long term investments are stated at cost. Provision for diminution
in the value of long term investments is made only if such a decline is
other than temporary in the opinion of the management.
b) Current investments are valued at cost or market value whichever is
lower. The decline in the value of current investments is provided in
the accounts each year.
F. Inventories
Inventories are valued at lower of cost or market price except for
waste. Waste is valued at realizable value. The cost comprises of cost
of purchase, cost of conversion and other cost including appropriate
production overheads incurred in bringing such inventories to their
present location. In case of raw materials and stores & spares the cost
is determined using FIFO method.
G. Sales
Sales are inclusive of recovery of excise duty and packing charges and
net of returns and sales tax.
H. Taxes, Duties etc.
Excise duty has been accounted on the basis of both payments made in
respect of goods cleared as also provision made for goods lying in
bonded warehouses. Provision is made for goods meant for sale in
domestic tariff area only.
I. Employee Retirement Benefits
CompanyÃs contribution to state plans are charged to revenue every
year. Liability to defined benefit plans is determined on the basis of
an actuarial valuation at the end of the year. The actuarial valuation
is recognized as an expenses. Actuarial gains and losses comprises
experience adjustments and the effect of changes in actuarial
assumptions and are recognized immediately in the profit and loss
account as income or expense.
J. Borrowing Cost
Interest and other costs in connection with the borrowing of the funds
to the extend related / attributed to the acquisition / consumption of
qualifying fixed assets are capitalized up to the date when such assets
are ready for its intended use and other borrowing cost are charged to
profit & loss account.
K. Earning per Share
Basic earning per share is calculated by dividing the net profit for
the year attributable to equity shareholders by the weighted average
number of equity shares outstanding during the year.
Diluted earning per share is calculated by dividing the net profit
attributable to equity shareholders by the weighted average number of
equity shares outstanding during the year (adjusted for the effects of
dilutive options).
L. Deferred Taxation
Deferred taxation is provided using the liability method in respect of
the taxation effect arising from all material timing differences
between the accounting and tax treatment of income and expenditure
which are expected with reasonable probability to crystallize in the
foreseeable future.
Deferred tax benefits are recognized in the financial statements only
to the extent of any deferred tax liability or when such benefits are
reasonably expected to be realizable in the near future.
M. Impairment of Assets
Impairment loss is provided to the extent the carrying amount of assets
exceeds their recoverable amount. Recoverable amount is the higher of
an assetÃs net selling price and its value in use. Value in use is the
present value of estimated future cash flows expected to arise from the
continuing use of an asset and from its disposal at the end of its
useful life.
N. Operating Lease
Operating lease receipts and payments are recognized as income or
expenses in the profit and loss account on a straight line basis over
the lease term.
O. Contingent Liabilities
Contingent liabilities not provided for in the accounts are separately
shown in the Annual Statement of Accounts.
P. Events occurring after Balance Sheet date
Events occurring after the Balance Sheet date have been considered in
the preparation of financial statements.
Mar 31, 2010
A. Basis of Preparation of Financial Statements
a) The financial statements have been prepared under the historical
cost convention in accordance with the generally accepted accounting
principles and the provisions of the Companies Act, 1956, Subject to
what is stated herein below, as adopted consistently by the company.
b) The company generally follows mercantile system of accounting and
recognizes significant items of income and expenditure on accrual
basis.
B. Fixed Assets
Fixed assets are stated at cost of acquisition inclusive of inward
freight, duties & taxes and incidental expenses relating to acquisition
and are net of modvat credit. In respect of major projects, related
pre-operational expenses form part of the value of assets capitalized.
C. Depreciation
Depreciation is calculated on fixed assets on Straight Line Method in
accordance with Schedule XIV of the Companies Act, 1956 as under:
a) In respect of Plant & Machinery by applying the revised rates in
force in terms of the notification dated 16.12.1993. Based upon legal
opinion depreciation has been provided at the rate prescribed for
continuous process plant.
b) In respect of other assets at the rates in force prior to the above
mentioned notification and at the revised rates on assets acquired
thereafter.
D. Foreign Currency Transactions, Derivatives Instruments and hedge
Accounting
a) Transactions denominated in foreign currencies are normally recorded
at the exchange rate prevailing at the time of the transaction.
b) Items denominated in foreign currencies at the year end and not
covered by forward exchange contracts are translated at year end rates
and those covered by forward exchange contracts are translated at the
rate ruling at the date of transaction as increased or decreased by the
proportionate difference between the forward rate and exchange rate on
the date of transaction, such difference having been recognized over
the life of the contract.
c) Any income or expense on account of exchange difference either on
settlement or on translation is recognized in the profit or loss
account.
d) The company uses foreign currency forward contracts and currency
options to hedge its risks associated with foreign currency
fluctuations relating to certain firm commitments and forecasted
transactions. Derivative instruments are initially measured at fair
value and are re-measured at subsequent reporting dates. Mark to market
losses on such measurement are recognized in the profit & loss account.
E. Investments
a) Long term investments are stated at cost. Provision for diminution
in the value of long term investments is made only if such a decline is
other than temporary in the opinion of the management.
b) Current investments are valued at cost or market value whichever is
lower. The decline in the value of current investments is provided in
the accounts each year.
F. Inventories
Inventories are valued at lower of cost or market price except for
waste. Waste is valued at realizable value. The cost comprises of cost
of purchase, cost of conversion and other cost including appropriate
production overheads incurred in bringing such inventories to their
present location. In case of raw materials and stores & spares the cost
is determined using FIFO method.
G. Sales
Sales are inclusive of recovery of excise duty and packing charges and
net of returns and sales tax.
H. Taxes, Duties etc.
Excise duty has been accounted on the basis of both payments made in
respect of goods cleared as also provision made for goods lying in
bonded warehouses. Provision is made for goods meant for sale in
domestic tariff area only.
I. Employee Retirement Benefits
Companys contribution to state plans are charged to revenue every
year. Liability to defined benefit plans is determined on the basis of
an actuarial valuation at the end of the year. The actuarial valuation
is recognized as an expenses. Actuarial gains and losses comprises
experience adjustments and the effect of changes in actuarial
assumptions and are recognized immediately in the profit and loss
account as income or expense.
J. Borrowing Cost
Interest and other costs in connection with the borrowing of the funds
to the extent related / attributed to the acquisition / consumption of
qualifying fixed assets are capitalized upto the date when such assets
are ready for its intended use and other borrowing cost are charged to
profit & loss account.
K. Earning per Share
Basic earning per share is calculated by dividing the net profit for
the year attributable to equity shareholders by the weighted average
number of equity shares outstanding during the year.
Diluted earning per share is calculated by dividing the net profit
attributable to equity shareholders by the weighted average number of
equity shares outstanding during the year (adjusted for the effects of
dilutive options).
L. Deferred Taxation
Deferred taxation is provided using the liability method in respect of
the taxation effect arising from all material timing differences
between the accounting and tax treatment of income and expenditure
which are expected with reasonable probability to crystallize in the
foreseeable future.
Deferred tax benefits are recognized in the financial statements only
to the extent of any deferred tax liability or when such benefits are
reasonably expected to be realizable in the near future.
M. Impairment of Assets
Impairment loss is provided to the extent the carrying amount of assets
exceeds their recoverable amount. Recoverable amount is the higher of
an assets net selling price and its value in use. Value in use is the
present value of estimated future cash flows expected to arise from the
continuing use of an asset and from its disposal at the end of its
useful life.
N. Contingent Liabilities
Contingent liabilities not provided for in the accounts are separately
shown in the Annual Statement of Accounts.
o. Events occurring after Balance Sheet date
Events occurring after the Balance Sheet date have been considered in
the preparation of financial statements.
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