a) Basis of Accounting
The accompanying financial statements are prepared in accordance with
the Indian Generally Acceepted Principles (GAAP) under the historical
cost convention and on the basis of a going concern, on accrual basis
except insurance and other claims, interest on tax refunds or over due
bills from customers and those with significant uncertainly unless
otherwise stated. GAAP comprises mandatory accounting standards and the
provisions of the Companies Act, 1956. These accounting policies have
been consistently applied.
The company follows the mercantile system of accounting and recognises
items of income and expenditure on accrual basis. Since it is not
possible to ascertain with reasonable certainty the quantum of accrual
in respect of certain insurance and other claims, interest on tax
refunds or over due bills from customers, same are accounted for as and
when received and settled.
b) Fixed Assets
Fixed Assets are stated at historical cost less accumulated
depreciation (other than Freehold Land where no depreciation is
charged). The cost of an asset comprises its purchase price and
directly attributable to cost of bringing the asset to working
condition for its intended use.
Depreciation on fixed assets has been provided on Straight Line Method
at the rates and in the manner prescribed in Schedule XIV of the
Companies Act, 1956.
d) Revenue Recognition
Sales represents invoice value of products net of VAT.
e) Inventories is valued and Certified by the management as follows :
i) Finished goods are valued at lower of cost or market value whichever
ii) Raw Materials, Stock in Process and Consumables are valued at cost.
f) Contingent Liabilities
Contingent Liabilities not provided for are disclosed by way of Notes.
g) Vat & Service Tax
Vat and Service Tax payable and Service Tax modvat accounted on the
basis of returns submitted. Additional liability if any on assessment /
audit objections shall be provided / paid as and when the assessment is