(a) Basis of Accounting
The Accounts are prepared under historical cost convention on a going
concern basis and follows the mercantile system of accounting
generally, except non accounting of Deferred Tax.
(b) Fixed Assets
All Fixed Assets are stated in the Balance sheet at cost The Company
capitalized all direct cost relating to fixed assets acquisitions and
(c ) Depreciation
(1) The Company provides depreciation on straight line method at the
rates and manner provided in Schedule XTV of the Companies Act, 195
(2) Lease hold land is not depreciated.
(3) Depreciation on Dies & Tools and Vehicles not provided during the
year to maintain NET BLOCK to the extent of 5% of GROSS BLOCK.
(1) Raw Material, Stores and Spares are valued at cost or net
realizable value which ever is lower. The work in progress is valued at
(2) Finished goods are valued at cost or net realizable value which
ever is lower.
(3) The cost of Imported Raw Material includes custom duties and other
(e) Revenue Recognition
The Income and Expenditure are accounted on accrual basis, except
dividend which is accounted for on receipt basis.
Local Sales are inclusive of excise duty but exclusive of Sales Tax and
(g) Foreign Currency Transaction
Cost of imported raw material is converted to Indian Currency at the
rate prevailing on the date of debiting such transaction by the Bank.
(h) Employee Benefits
i) Provident Fund/ESI
Company''s contribution paid/payable during the year to provident fund
and E.S.I.C. are charged to Profit & Loss Account. There are no other
obligations other than contribution payable to the respective
Gratuity has been provided in the books of accounts on accrual basis.
The gratuity calculation is based on assumption mat such benefits are
payable to all eligible employees at the end of accounting year.
Income Tax expenses comprise current tax and deferred tax charge Or
credit. Provision for current tax is made on the assessable income at
the tax rate applicable to the relevant assessment year. The deferred
tax asset and deferred tax liability is calculated by applying tax rate
and tax laws mat have been enacted by the balance sheet date.
(j) Provisions, Contingent Liabilities and Contingent Assets
The Company recognizes a provision where there is a present obligation
as a result of a past event that probably requires an outflow of
resources and a reliable estimate can be made of the amount of the
obligation. A disclosure for 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. Where there is a possible
obligation or a present obligation that the likelihood of outflow of
resources is remote, no provision or disclosure is made contingent
assets are neither recognized nor disclosed, provisions, contingent
liabilities and contingent assets are reviewed at each Balance Sheet
The Investment is stated at cost.