i) (a) Method of Accounting:
The accounts of the company are prepared under the historical Cost
convention using the accrual method of accounting unless stated
otherwise hereinafter. Accounting policies, not specifically referred
to are consistent with generally accepted accounting principles.
(b) The net worth of Company as on 31/03/2002 has been completely
eroded & it has become a Sick Industrial Unit within the meaning of
clause (O) of Sub Section (I) of Section 3 of the Sick Industrial
Companies (Special Provisions) Act, 1985. The production activity is
substantially lowered and Companys plant is under lay off. The
Company will shortly submit restructuring / revival plan to its banker
and deliberation and representation on the same is continuing. In
expectation of positive response on the above the accounts for the
period ended 31/ 3 /2002 has been prepared on going concern basis.
ii) Fixed Assets
(a) Fixed Assets have been stated at actual cost. The actual cost is
inclusive of freight, installation cost, duties, Taxes and other
(b) Capital work in progress: - All expenses incurred for acquiring,
erecting and commissioning of fixed assets incurred during
commissioning of projects as shown under capital work in progress and
allocated to the fixed assets on the completion of the projects.
iii) Depreciation : The Company provides depreciation on its fixed
assets on straight-line method at the rates specified in the Schedule
XIV of the Companies Act, 1956.
IV) Investments : Investments are valued at cost of acquisition.
a) Raw materials including consumables, packing materials, stores and
spares are valued at cost on FIFO basis.
b) Work in process is valued at cost of material and labour together
with cost incurred in normal course of business.
c) Finished goods are valued at cost of materials and labour together
with relevant factory overheads or net realisable value whichever is
lower. Due consideration is given to the salability of the stock and
no obsolete or unserviceable / damaged items are included therein
except of their net realisation value.
VI) Treatment of Contingent Liability
Contingent Liabilities are disclosed by way of Notes on Accounts.
Vil) Foreign Currency Transactions
Transactions in foreign currencies are recorded at the exchange rate
prevailing at the time of occurrence of transaction.
VIII) Preliminary and capital Issue Expenses.
Preliminary and Capital Issue expenses are amortised over a period of
IX) Differed Revenue Expenditure
Differed Advertisement Expenditure is amortised over a period of 5