1. SYSTEM OF ACCOUNTING:-
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, as adopted
consistently by the com- pany, except for certain fixed assets which
have been revalued.
b) The Company generally follows mercantile system of accounting and
recognizes significant items of income and ex- penditure on accrual
c) Benefit on account of entitlements to import duty free material
under the Duty Entitlement Passbook scheme & other Export Incentives
are accounted for on Cash basis.
2. FIXED ASSETS :
Fixed Assets are stated at cost inclusive of incidental and/or
installation expenses. They are stated at revalued amount being fair
market value on the basis of valuation made by approved valuer. Surplus
on account of revaluation is credited to the revaluation reserve
3. DEPRECIATION :
Depreciation on the assets has been provided on straight line method at
the rates prescribed under Schedule XIV to the Companies Act, 1956.
4. INVENTORIES :
There is no inventories of raw materials, goods in transit, consumable
stores, furnace oil and lubricants. Inventories of Finished Goods is
valued at cost or market value whichever is lower. There is no closing
stock of Finished Goods as at 31.03.2012.
5. INVESTMENTS :
Valuation of long term (non-current) quoted investment are stated at
cost less provision, if any, for permanent diminution in value.
Unquoted long term (non-current) investment are valued at cost. Current
Investment are valued at cost as per consistent practice of the
6. FOREIGN EXCHANGE TRANSACTION:
a) Foreign Exchange transactions are converted into Indian Rupees at
the rate of exchange prevailing on the date of transaction. Exchange
rate difference is charged to Statement of Profit & Loss on final
payment of the liability. Unsettled transaction at the close of the
year are considered taking into account the exchange rate prevailing at
the year end and diff. is charged to Statement of Profit & Loss.
b) Variation due to fluctuation in exchange rate as on the date of
Balance Sheet, the increase / decrease is accounted in respect of
Investment and Advance to foreign company is accounted for in the
Foreign Currency Transaction Reserve.
7. EMPLOYEE BENEFITS :
Gratuity paid to employee retrenched charged to Statement of Profit &
Loss. Other payment made to employee on retrenchment of employees
charged to Statement of Profit & Loss on payment basis.
8. TAXATION :
Deffered tax liability of Rs.3,55,955/- has been created as per
Accounting Standard 22 Accounting of Tax on I ncome issued by
ICAI on timing difference as follow.