1. Significant Accounting Policies
A. Method of Accounting: The books of accounts are maintained under the
Historical Cost Convention on an accrual basis:
B. USE OF ESTIMATES:
The preparation of financial statements In conformity with generally
accepted accounting principles requires estimates and assumptions to be
made that affect the reported amounts of assets and liabilities and
disclosure of contingent liabilities on the date of financial
statements and reported amounts of revenues and expenses during the
reporting period. Actual result could differ from these estimates and
differences between the actual results and estimates are recognised in
the period in which the results are known/ materialised.
C. Fixed Assets:
Fixed Assets are stated at cost including incidental and pre-operative
expenses less depreciation.
The Company provides depreciation on written down value method at the
rates specified in the Schedule XIV of the Companies Act 1956.
Depreciation on additions to / deductions from assets is calculated
pro-rata from the date the assets are put to use /till the date the
assets are sold/ disposed off.
E . Inventories:
I. Stock in trade comprise of raw materials valued at cost or market
value which ever is less.
II. Finished stock is valued at cost.
F. REVENUE RECOGNITION:
i) Revenue from sale of goods and job work is recognised on dispatch,
which coincides with transfer of significant risk and rewards to
customer. Further, sales revenues are net of VAT, excise duties, sales
returns and discounts,
ii) Income on Term deposits Is accounted on accrual basis.
G. EMPLOYEE BENEFIT:
(a) Short term employee benefits are recognised as an expense at the
undiscounted amount in the profit and loss account of the year in which
the related service is rendered.
(b) Long term benefits:
(i) Defined Contribution Plan: Provident Fund:
The eligible employees of the Company are entitled to receive post
employment benefits in respect of provident fund. In which both
employees and the Company make monthly contributions at a specified
percentage of the employees'' eligible salary (currently 12% of
employees'' eligible salary). The contributions are made to Regional
Provident fund Commissioner. Provident Fund is classified as Defined
Contribution Plans as the Company has no further obligations beyond
making the contribution. The Company''s contributions to Defined
Contribution Plan are charged to profit and loss account as Incurred.
(ii) Defined Benefit Plan: Gratuity: Gratuity payable under the Payment
of Gratuity Act, 1972 and liability if any, will be accounted on
H. TAXATION: Provision for taxation comprises of Current Tax and
Deferred Tax. Current Tax Provision has been made on the basis of
relief and deductions available under the Income Tax Act, 1961. The
deferred tax for timing difference between the book profit and tax
profits is accounted for using the tax rates and laws that have been
enacted or substantively enacted as of the Balance Sheet date.
I.PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:
Provisions are recognised for when the company has at present legal or
contractual obligation as a result of past events and there is
probability of outflow of resources and the amount is capable of being
estimated reliably. Contingent liability Is disclosed by way of note
when the said conditions are not met. Contingent assets are not
j. PRIOR PERIOD ITEMS:
Significant Items of Income and Expenditure, which relate to prior
accounting period, are accounted in the Profit and Loss account under
the head Prior Period Adjustments other than those arising due to
events occurring after the close of the year and which are treated as
relatable to the current year.