A. ACCOUNTING POLICIES
I. BASIS OF ACCOUNTING The company follows the mercantile system of
Accounting & recognizes income & expenditure on accrual basis unless
specifically stated otherwise.
The accounts are prepared on historical cost basis as a going concern.
Accounting policies not referred to otherwise are consistent with
generally accepted accounting principles.
II. FIXED ASSETS
Fixed Assets are stated at cost of acquisition or construction. They
are stated at historical cost less accumulated depreciation.
Depreciation on fixed assets is provided on Straight line Method as per
provisions under section 205(2) of Companies Act, 1956 at rates and in
the manner specified in schedule XIV of the said Act.
Items of Inventory are valued on the basis given below:
Raw & Packing Materials - At cost including incidental expenses like
Semi Finished Goods - At estimated Cost
Finished Goods - At Cost or Market Value whichever is lower
Scrap - At realization value
Sales are accounted at the invoice price of dispatches made and are
accounted inclusive of excise duty & net of sales return.
VI. ACCOUNTING OF MODVAT/CENVAT
Modvat/Cenvat credit available on materials are accounted by recording
material purchases inclusive of excise duty.
Modvat/Cenvat credit on Capital Goods are accounted net of Excise Duty
and depreciation is claimed accordingly.
VII. CONTINGENT LIABILITIES
Contingent liabilities are not provided in the accounts but are
separately disclosed in the notes on accounts.
VIII. MISCELLANEOUS EXPENDITURE
It has been consistent practice of the company of amortizing the
preliminary expenses & other Misc. Expenditure over a period often