1) BASIS OF ACCOUNTING
The accompanying financial statements are prepared under the historical
cost conventions following accrual basis of accounting. Accounting
policies not specifically referred to otherwise are consistent and is
consonance with generally accepted accounting principles.
2) REVENUES RECOGNITION
The incomes and expenditures are accounted for on accrual basis. The
sales are net of returns and inclusive of applicable excise duties.
3) FIXED ASSETS AND DEPRECIATION
The fixed assets are stated at historical cost less depreciation. The
cost includes the cost of purchase or construction together with
interest of borrowing for the purpose of acquiring fixed assets up to
the date of commissioning of fixed assets and other incidental expenses
incurred up to that date. Depreciation has been provided on
straight-line method, on single shift basis, at the rates provided in
Schedule XIV of the Companies Act, 1956.
4) EXCISE DUTY
CENVAT credits are taken into account at the time of purchase of
Capital Goods and Raw Materials, to the credit of respective purchases
and utilised for the clearance of goods manufactured. Expenditure in
respect of excise duty on finished products is accounted for as and
when the clearance is made from factory premises. The amount of excise
duty payable on the finished goods, not cleared from the factory as at
31st March 2012, has not been added to the value of closing stocks of
finished goods. However, the non-provision of such excise duty will not
effect the profits for the year.
5) BORROWING COSTS
Borrowing costs attributable to the acquisition, construction or
production of an asset is capitalized as part of the cost of that
asset. The borrowing costs, which are not related to fixed assets, are
recognized as an expense in the period in which they are incurred.
The stocks of Raw Material and Stores & Spares are valued at cost
price. The Finished Goods have been valued at cost or net realizable
value whichever is less, work- in process is valued at estimated cost
as certified by management. Goods in transit are carried at cost.
7) EMPLOYEE TERMINAL BENEFITS
The contribution to provident fund, under the defined contribution
plans is charged to revenue. The Company has also provided towards the
Gratuity benefits and Leave Encashment, of the eligible employees. No
provision is made towards bonus during the year. The provisions for the
above benefit relating to the current year are charged to the revenue.
8) INCOME TAXES
a. Provision for taxation has been made on the basis of taxable
profits computed for the current accounting year in accordance with the
provisions ofthe Income Tax Act, 1961.
b. Deferred Income Tax is provided using the asset method on all
timing differences at the balance sheet date between the tax base of
assets all liabilities and their carrying amounts for financial
c. Deferred Tax Assets are recognized only to the extent that there is
reasonable / virtual certainty of their realization.
d. Deferred Tax Assets and Liabilities are measured using the tax laws
that have been enacted or subsequently enacted at the balance sheet