(a) The Accounts are prepared under the historical cost concept and
they materially comply with mandatory accounting standards issued by
the Institute of Chartered Accountants ol India.
(b) The Company generally follows mercantile system of accounting and
recognizes significant items of income and expenditure on accrual
Export Sales is stated at C&F/CIF/FOB basis.
ii) Fixed Assets are stated at cost less depreciation. Cost comprises
of purchase price (net of rebates and discounts), import duties, levies
and any directly attributable cost of bringing the assets on its
working condition for the intended use.
1) Depreciation is charged under Straight Line method.
2) Depreciation on Additions during the year is provided on a prorata
basis from the date the assets have been installed and put to use on a
Straight Line method at rates and in the manner specified under
Schedule XIV of the Companies Act, 1956.
iv) CURRENT ASSETS:
Inventories are certified by a Director and are valued as under:
1) Raw Materials & Stores : At cost
2) Semi finished goods : At cost
3) Finished goods : Lower of cost or market price
v) All accounts receivable are unsecured and are considered good other
than that have been classified as Doubtful and are subject to
vi) RECOGNITION OF INCOME & EXPENDITURE:
1) Income & Expenditure are recognised on accrual basis.
2) Bonus to Employees is accounted on cash basis.
vii) FOREIGN CURRENCY TRANSACTION :
1) Export sales are accounted at exchange rates prevailing on the date
of negotiation of bills by the bankers.
2) Purchase of imported raw materials and components are accounted at
amounts paid to discharge the related liabilities.
3) Foreign currency loans for acquisition of fixed assets are converted
at the rate prevailing on the date of Balance Sheet. The gain or loss
arising out of currency translation is adjusted in the cost of fixed
4) Current Assets and Current Liabilities are translated at the rate
prevailing on the date of Balance Sheet. The gain or loss if any,
arising therefrom are recognised in the Profit and Loss Account.
viii) RETIREMENT BENEFITS :
1) Short term employee benefits are charged off at the undiscounted
amount in the year in which the related service is rendered.
2) Contribution payable by the Company under defined contribution
schemes towards Provident Fund for the year are charged to Profit and
3) The Company has its own approved Gratuity Fund and the contributions
to that fund are being made to LIC.
4) The Leave encashment entitlement is computed on Calendar year basis
and payment made to the Employees accordingly in the succeeding January
of every year. Hence, there is no outstanding liability towards Leave
encashment as per Accounting Standard 15.
IX. PROVISION, CONTINGENTLIABILITIES AND CONTINGENT ASSETS :
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent liabilities are not recognized but are disclosed in the
Notes. Contingent Assets are neither recognized nor disclosed in the
X. RESEARCH AND DEVELOPMENT:
No such expenditure incurred during the current year.
XI. BORROWING COSTS:
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalized as part of the cost
of such assets.
All other borrowing costs are charged to revenue.
XII. TAXES ON INCOME:
Tax expenses comprises current tax and deferred tax.
a) Current income tax is measured at the amount expected to be paid to
the tax authorities, computed in accordance with the applicable tax
rate and tax laws.
b) The Company recognizes the deferred tax liability / asset based on
the accumulated timing difference using the current tax rate.
Interest subvention under Pre and Post shipment advance is credited to
the interest and finance charges.
XIV. IMPAIRMENT OF ASSETS : AS-28
In the Opinion of the Company, the recoverable amount of the fixed
assets of the Company will not be lower than the book value of the
fixed assets. Hence, no provision has made for impairment.