Basis of Accounting
a)The accounts are prepared on the basis of historical cost convention
and as a going concern in accordance with the generally accepted
accounting principles and as per the provisions of the Companies Act,
b)The Company follows mercantile system of accounting and recognizes
income and expenditure on accrual basis . ii) Fixed Assets and
a)Fixed Assets are stated at cost of acquisition or construction
including any cost attributable to bringing the assets to their working
condition for their intended use. b)Depreciation is provided on
Straight Line Method from the date of Purchase/Installation put to use
at the rates and in the manner prescribed under Schedule XIV to the
Companies Act, 1956.
c)Considering the age of the building and with a view to recognise
deterioration in the value of the building, the Company has resolved to
write off the written down value @ 25% per annum, over a period of 4
years from the accounting year 2009-2010.
Inventories are valued as under :
Raw Material and Bought out Goods - at the lower of Cost or Net
Realisable Value Finished Goods - at the lower of Cost or Net
Other Consumables - at the lower of Cost or Net Realisable Value
iv) Miscellaneous Expenditure
Deferred Revenue expenditures are being amortized over a period of 10
years and charged to revenue accordingly.
Income tax expenses comprise current tax and deferred tax charge or
credit. Deferred tax assets/Liabilities are measured by applying tax
rate and tax laws that have been enacted by the Balance sheet date.
Deferred tax liability on account of opening timing difference due to
depreciation under tax laws is recognized in the accounts. Deferred tax
liability on account of depreciation during the year is also recognized
in the accounts. At each Balance Sheet date, the carrying amount of
Deferred Tax Assets/liabilities is reassessed based on a careful
vi) Borrowing Costs
Borrowing costs attributable to acquisition, construction or production
of a qualifying fixed asset are capitalized as part of the cost of such
asset. All other borrowing costs are recognized as an expense in the
period in which they are incurred.
vii) Contingent Liabilities
Contingent Liabilities are disclosed by way of notes.