A. BASIS OF ACCOUNTING :
The financial statements are prepared under historical cost convention
on an accrual going concern basis and are in accordance with the
requirement of the Companies Act, 1956.
B. CAPITAL EXPENDITURE :
a. Cost of major civil works required for plant and Machinery supports
is considered as Plant and Machinery.
b. Capital Assets under erection/installation arc reflected in the
Balance Sheet as Capital Work in Progress including advance to
supplies, contractors and others.
c. All fixed Assets arc recorded at cost of aquisition or
construction. They are stated at historical cost. Financial cost
relating to borrowed funds attributable to construction or acquisition
of Fixed Assets is included in the gross book value of Fixed Assets to
which they relate.
Depreciation on fixed Assets is provided on Stratight Line Method at
the rates and in the manner prescribed in Schedule XIV to the Companies
Act 1956, as amended from time to time. Also refer Note No.IX of Notes
Investments are valued at cost.
Items of inventories are valued on the basis given below:
The old stock of Inventories such as Finished goods, Raw materials,
work-in-process packing materials, consumable stores, fuel oil arc
taken with the same value as taker since the last three years.
F. ACCOUNT OF MODVAT CREDIT
MODVAT credit is accounted on the basis of raw materials purchased. The
refund of excise in the form of MODVAT credit available on inputs of
materials as per excise laws are deducted from the landed cost of the
materials purchased and, accordingly, closing stock of input materials
are valued net of MODVAT credit.
G. EXCISE DUTY :
Sales of products arc inclusive of Excise Duty, Export Sales arc
accounted on F.O.B. basis. The excise duty payable on Finished Goods
are accounted for on the clearance of goods from the factory. No
provision is made for Excise Duly in respect of Finished Products lying
in the factory premise.
H. RESEARCH & DEVELOPMENT :
Revenues expenditure on Research and Development is charged to profit
and Loss Account in the year in which it is incurred. Capital
expenditure on Research and Development is shown as an addition to
I. TREATMENT OF EXPENDITURE DURING CONSTRUCTION
Incidental expenses incurred during construction period of new projects
are capitalised upto the date of first commissioning of the project.
Pending capitalisation, estimated percentage, based on management
perspective, of revenue expenses incurred during the year upto the date
of completion have ben capitalised.
I. CONTINGENT LIABILITIES :
These arc disclosed by way of Notes on Accounts. Provision is made to
the accounts in respect of those liabilities which arc likely to
materialise after the year end, till the finanlisation of accounts and
have material effect on the position stated in the Balance Sheet.
K. FOREIGN EXCHANGE/CURRENT CONVERSION
Transactions in foreign Currency arc recorded in rupees b applying rate
of exchange ruling at the time of transaction and exchange differences
arising out of their settlements are dealt with in the Profit and Loss
L. Prior period Adjustment:
Prior period adjustment of indentifical items of Income and Expenditure
pertaining to the prior period arc accounted through prior period
M. Treatment of retirment benefits
As there are no employees on payroll, there is no liability for
gratuity, Leave Encashment etc. as on 31-03-2002.