1. Accounting Convention and Concepts -
a. The financial statements have been prepared under the historical
cost convention in accordance with generally accepted accounting
principles and provision of the Companies Act, 1956, as adopted
consistently by the Company.
b. The Company generally follows mercantile system of accounting and
recognizes significant items of income and expenditure on accrual
2. Use of Estimates-
The presentation of financial statements in conformity with the
generally accepted accounting principles require estimates and
assumptions to be made that affect the reported amount of assets and
liabilities on the date of the financial statement and the reported
amount of revenues and expenses during the year. Difference between the
actual results and estimates are recognized in the period in which the
results are known/ materialized.
3. Fixed Assets/ Depreciation -
a. Fixed Assets are stated at cost of acquisition or construction. In
case of revaluation of fixed assets, the original cost as determined by
the value is considered in the accounts and the differential amount is
transferred to Revaluation Reserve.
b. Depreciation is provided on Building and Plant & Machinery on
straight line method and rest of the fixed assets on written down value
method at the rates specified in Schedule XIV to the Companies Act,
c. Leasehold Land will be written off in the year in which the
respective lease periods expire.
d. Pursuant to Section 205 (2) depreciation on Plant & Machinery is
calculated on revalued figure and not on original cost of Plant &
Machinery. Subsequently the depreciation on revalued figure is reduced
and balance is carried to Profit and Loss Account.
4. Inventories -
Finished products are valued at lower of cost or net realizable value,
stocks in process, raw material, stores and spares at cost and these
are in conformity to Accounting Standards.
Sale of goods is recognized at the point of dispatch to customers. The
excise duty and sales tax collected on sales are added in sales.
6. Excise duty -
Excise duty on manufactured goods is accounted for at the time of their
clearance from the factory. The above policy however has no impact on
the operating results of the Company.
7. Retirement benefit -
Company''s contributions to Provident Fund are charged to Profit and
Loss Account. Gratuity and leave encashment benefits at the time of
retirement are charged to Profit and Loss Account on the basis of
8. Contingent liabilities-
Contingent liabilities are determined on the basis of available
information and are disclosed by way of other notes given herein below.