1. SYSTEM OF ACCOUNTING:
The company generally follows mercantile system of accounting and
recognizes income and expenditure on accrual basis.
2. FIXED ASSETS:
Fixed Assets are stated at cost of acquisition inclusive of foreign
exchange fluctuation, inland freight, duties and taxes and incidental
expenses related to acquisition.
Depreciation on the Assets of the company is provided on Straight Line
Method as per Schedule XIV to the Companies Act, 1956.
Gross sales are stated net of Sales Tax and inclusive of Excise duty.
5. EMPLOYEE BENEFITS:
Contribution to provident fund is remitted to the Provident Fund
Commissioner and such paid/payable amounts are charged against revenue.
Group Gratuity Scheme is administrated through Trustees for which
policies are taken from LIC of India. The above payments/ provisions
are charged to revenue. The liabilities towards such schemes are
determined by an independent actuarial valuation as per the
requirements of Accounting Standard-15.(Revised 2005) on Employee
Encashment of leave is accounted for on accrual basis.
Inventories are valued at lower of cost or net realizable value. The
cost is calculated on weighted average method. Cost comprises
expenditure incurred in the normal course of business in bringing such
inventories to its location and includes, where applicable, appropriate
overheads based on normal level of activity,
Long term investments are stated at cost. Any decline in the value of
long term investment is recognized by providing for such diminution in
the value of investments, unless the reduction is of temporary in
8. RECOGNITION OF INCOME:
Advance Licenses and Import Entitlements received against exports made
by the company are accounted in the books on accrual basis.
9. FOREIGN EXCHANGE TRANSACTIONS:
Foreign currency transactions are accounted at the exchange rates
ruling on the date of transactions. The net gain/loss arising on
revenue account during the year in respect of foreign exchange
transaction is reckoned in the Profit and Loss Account.
10. BORROWING COSTS:
Borrowing costs that are attributable to the acquisition or
construction of long lead time capital assets are capitalized as a part
of cost of the asset. All other borrowing costs are charged to revenue.
11. DEFERRED TAXATION:
Deferred tax, being tax on timing difference between taxable income and
accounting income that originate in one year and are capable of
reversal in one or more subsequent years, has been recognized. Deferred
tax assets, arising from temporary timing differences and out of
unabsorbed loss or depreciation are recognized to the extent that there
is reasonable certainty that the assets can be realized in future.
12. RESEARCH AND DEVELOPMENT:
i. Revenue expenditure is charged to Profit & Loss Account.
ii. Capital expenditure is shown as addition to fixed assets under
13. CONTINGENT LIABILITIES:
Contingent liabilities not provided for are indicated by way of a Note
and will be provided/ paid on crystallization.