The accounts are prepared on a historical cost convention and complies with the mandatory accounting
standards issued by the Institute of Chartered Accountants of India.
The significant accounting policies followed by the Company are as stated below:
i) Fixed Assets and Depreciation:
Depreciation is provided from the dates the assets have been acquired or installed on written down value
method at the rates specified under Schedule XIV of the Companies Act, 1956. (As amended by notification
dated 16.12.93) Fixed Assets have been valued at cost less depreciation.
ii) Recognition of Revenue:
Revenue is recognised when the sale of goods/despatches are completed at agreed rates which are exclusive of
Excise Duty, Sales Tax, Insurance and Transport Charges.
iii) Foreign Currencies:
All payments made in foreign currency are translated into rupees at the rates at which it is debited by the
bank. There has been no Export Sales during the year.
iv) Inventories :
Inventories are valued at lower of cost and net realisable value except stores and loose tools, which are
valued at cost.
v) Retirement Benefits:
Contribution to Provident Fund is made monthly, at a predetermined rate and debited to Profit and Loss
Account on accrual basis. Being the first year where employees are, qualified for payment of Gratuity, the
Company is taking steps to formulate a policy in accordance with Accounting
Standards and to get the Actuarial Valuation done. Hence no provision for gratuity has been made during the
vi) Contingent Liabilities:
All known liabilities have been provided for in the accounts except liabilities of a contingent nature,
which have been disclosed at their estimated value in the notes on accounts.
vii) Research and Development:
Revenue expenditure of R&D is charged as Expenditure in the year in which it is incurred.
Revenue expenditure of a Capital nature relating to Research and Development is taken to Fixed Assets and
Depreciation charged on such assets.