(1) Basis of Preparation of financial statements:-
(i) The financial statements have been prepared under the historical
cost convention and in accordance with the generally accepted
(ii) Accounting policies not specifically referred to otherwise are
consistent and in consonance with generally accepted accounting
Assets and liabilities are recorded on historical cost to the Company.
The costs are not adjusted to reflect the changing value in the
purchasing power of money.
(3) Accounting of Incom^Expenditure:-
All income and expenditure items having a material bearing on the
financial statements are recognized on accrual basis except as stated
otherwise. However, Dividend Income if any is accounted for on receipt
basis. Sales are inclusive of sales tax and revenue is recognized on
accrual basis. Sales are inclusive of service charges. In case of
export sales, the bills are discounted and the amount realized in
rupees is credited to sales account
(4) Fixed Assets:-
Fixed Assets have been carried at historical cost, inclusive of
incidental expenses, interest, less accumulated depreciation.
Depreciation has been provided on Straight Line Method on pro-rate
basis at the Rates and in the manner prescribed in Schedule XIV to the
Companies Act, 1956.
i) Finished goods are valued at lower of cost or market price.
ii) Raw materials, stores and spare parts are valued at cost.
iii) Cost of inventory is generally on actual acquisition cost based on
(7) Investments:- Investment are valued at cost.
(8) Gratuity/Retirement Benefits:-
The Company accounts for gratuity and leave encashment on cash basis.
Also non of the employees have completed 5 years of service.
(9) Miscellaneous Expenditure:-
Preliminary expenses, public issue expenses and expenses for increasing
the Authorised Capital is written off over a period of ten years.
(10) Deferred Tax:-
The deferred tax during the year for timing difference is accounted
using tax rates that have been enacted. The net difference arising
there on is debited to Profit & Loss A/C.