(i) The Company follows the mercantile system of accounting and
recognises income and expenditure on accrual basis. The accounts are
prepared on historical cost basis, as a going concern and adjusted by
revaluation of assets.
(ii) Accounting policies not specifically referred to otherwise are
consistent and in consonance with generally accepted accounting
principles and practices. The financial statements have been prepared
in compliance with all material aspects of the mandatory Accounting
Standard issued by the ICAI and the relevant provisions of the
Companies Act, 1956.
(b) USE OF ESTIMATES:
The presentation of financial statements requires certain estimates and
assumptions. These estimates and assumptions affect the reported amount
of assets and liabilities on the date of the financial statements and
the reported amount of revenues and expenses during the reporting
period. Difference between the actual result and estimates are
recognized in the period in which the results are known / materialized.
(c) FIXED ASSETS & DEPRICIATION
Fixed Assets are stated at cost and adjusted by revaluation of assets.
(i) Depreciation on Fixed Assets (including revalued assets) is
provided on Straight Line Method at the rates and in the manner
specified in Schedule XIV of Companies Act, 1956, read with the
relevant circulars issued by the Department of Company Affairs from
time to time.
(ii) Depreciation on the assets added/disposed off during the year has
been provided on pro-rata basis with reference to the date of
(d) CURRENT ASSETS : Inventories are valued at lower of cost or net
realizable value. Cost is arrived at as under:
RAW MATERIALS : FIFO
PACKING MATERIALS : FIFO
STOCK IN PROGRESS Absorption Cost Basis
STOCK IN GOODS Absorption Cost Basis
(e) INVESTMENT All the Investments are the Company are long tern
investments and the same are stated at cost.
(f) EMPLOYEE BENEFIT
Retirement benefits in the form of Provident Fund, Family Pension Fund
and Superannuation Schemes, which are defined contribution schemes, are
charged to the profit and loss account of the period in which the
contributions to the respective funds accrue.
The Company has created Employees Group gratuity fund which has taken a
Group Gratuity insurance Policy fro Life Insurance Corporation of India
(LIC). Premium on the above policy as intimated by LIC is charged to
the profit and loss account. The adequacy of balances available is
compared with actuarial valuation obtained at the period end and
shortfall, if any, is provided for the profit and loss account.
Actuarial gains and losses are immediately recognized in the profit and
loss account and are not deferred.
(g) TAX ON INCOME:
Current Tax is determined on the basis of the amount of tax payable in
respect of taxable income for the year.
Deferred tax is calculated at current statutory income tax rate and is
recognized on timing differences; being the difference between taxable
income and accounting income that originate in the one period and are
capable of reversal in one or more subsequent periods. Deferred tax
assets subject to the consideration of prudence, are recognized and
carried forward only to extent that there is reasonable certainty that
sufficient future taxable income will be available against which such
deferred tax liability can be realized.