(A) Basis of Preparation of Financial Statements:
The financial statements have been prepared under the historical cost
convention in accordance with generally accepted accounting principles
in India, the applicable accounting standards and as per provisions of
the Companies Act, 1956. The company follows the mercantile system of
accounting and recognizes Income and Expenditure on accrual basis.
Accounting Policies not referred to otherwise are consistent with the
generally accepted accounting principles.
(B) Fixed Assets:
Fixed Assets are stated at cost less Accumulated Depreciation. Cost
comprises purchase price and any attributable cost of bringing the
assets to its working condition for its intended use.
Depreciation on Fixed Assets has been calculated on straight line
method at the rate prescribed in schedule XIV to the Companies Act,
1956. Depreciation on addition/deletion during the year has been
provided on prorate basis.
Investments are stated at cost of acquisition.
Inventories are valued at lower of cost or net realisable value using
FIFO cost method.
(G) Retirement Benefits:
Contribution to Provident Fund, Liability for Leave encashment and
Gratuity are accounted for on accrual basis.
(H) Excise Duty:
The liability for Central Excise duty on account of stocks lying in
factory has not been provided in the books of accounts as the same is
being accounted for on payment basis and not carried into stock as per
practice followed by the company. However, the liability if accounted
would have no effect on the Profit for the year.
(I) Revenue Recognition:
a) Sales is net of Sales tax/VAT, Excise duty, Sales return, Rate
difference, damage goods Compensation etc.
b) Other income is accounted on due basis as per the terms.
(J) Foreign Currency Transactions:
Transaction in foreign currency are recorded at the rates of exchange
in force at the time transactions are affected
(K) Borrowing Cost
Borrowing Cost that are directly attributable to the acquision,
construction of qualifying assets,
Wherever applicable, are capitalized as part of the cost of that asset.
Other borrowing costs are recognized as an expense in the period in
which they are incurred.
(L) Impairment Loss
As required by the Accounting Standards (AS 28) Impairment of
Assets issued by ICAI, as informed to us, the company has carried
out the assessment of impairment of assets. There has been no
Impairment loss during the year.