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Notes on Accounts
VI. Inventories:
Inventories are valued on the following basis:
a)
Stores and Spares - at moving weighted average basis.
b) Raw Materials - at moving weighted average basis.
c)
Work-in-Process - at estimated cost
d) Finished Goods - at lower of cost or estimated realisable value.
e) Stock in trade - at lower of cost or estimated realisable value.
f) Material in Transit – at cost.
VII. Excise & Custom Duty:
Inventories are valued on the following basis:
a)
Custom Duty is accounted for at the time receipt of goods in custom warehouse.
b) CENVAT Credit, to the extent availed, is adjusted towards cost of materials.
VIII. Sales
Sales are inclusive of excise duty and after deducting VAT and discounts.
IX. Foreign Currency Transactions:
a)
Transactions denominated in foreign currencies are recorded at the exchange rates prevailing on the date of the transaction or
that approximates the actual rate at the date of the transaction.
b) Monetary items denominated in foreign currencies at the year end are restated at year end rates, except in cases covered by
forward exchange contracts.
c)
Any income or expense on account of exchange difference either on settlement or on translation is recognized in the statement
of profit & loss.
X.
Government grants and subsidies:
Grants and subsidies from the government are recognized when there is reasonable assurance that (i) the Company will comply with
the conditions attached to them, and (ii) the grant/ subsidy will be received.
Where the grant or subsidy relates to revenue, it is recognized as income on a accrual basis in the statement of profit and loss. Where
the grant relates to a fixed asset, it is net off from the relevant asset.
XI. Employee Benefits:
a) Short term employee benefits are recognized as an expense at the undiscounted amount in the profit and loss account of the
year in which the related service is rendered.
b) Gratuity liability has been provided on the basis of actuarial valuation.
XII. Research & Development:
Revenue Expenditure on research and development is charged to Profit & Loss Account in the year in which it is incurred. Capital
Expenditure on research and development is treated as additions to Fixed Assets in case the same qualifies as a tangible asset as
per AS – 10 issued by ICAI.
XIII. Provision, Contingent Liabilities and Contingent Assets:
Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result
of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed
in the notes. Contingent assets are neither recognized nor disclosed in the financial statements.
XIV. Sundry Debtors:
Sundry Debtors are shown net of bills discounted.
XV.
Dividend received is accounted for as and when it is declared.
XVI.
Unless specifically stated to be otherwise, these policies are consistently followed.
1. SIGNIFICANT ACCOUNTING POLICIES TO THE CONSOLIDATED BALANCE SHEET AND STATEMENT OF PROFIT & LOSS
