1. General :- The financial statements have been prepared under the
historical cost convention in accordance with the generally accepted
accounting principles in India and the provisions of the Companies Act
The Company generally follows the mercantile system of accounting and
recognizes significant items of Income and Expenditure on accrual
Accounting Policies not specifically referred to otherwise be
consistent and in consonance with generally accepted accounting
2. Revenue Recognition :- The export sales have been recognized on the
date of issuance of Bill of Lading, at an average rate stated in
shipment bill. However it can be recorded at the value calculated
according to current exchange rate. Expenses and Income considered
payables and receivables respectively are accounting for on accrual
3. Fixed Assets :- Fixed assets are stated at their historical cost
less depreciation till date.
4. Depreciation :- Depreciation has been provided on the basis of
Straight Line Method as per rates prescribed in Schedule XIV of the
Companies Act, 1956.
5. Investments :- Company has no Investments
6. Inventories :-
Raw Material & Packing Material : At Cost
Finished Goods : As Cost or NRV whichever is lower Further Stock traded
is recorded in weight, gross or net, as per receipts from the suppliers
and sales to customers.
7. Retirement Benefits :-
No employee is eligible for gratuity benefits and has no leave
accumulated entitling encashment at the end of the year. Hence no
provision to the above effect was required to be made.
8. Provision for Deferred Tax Assets / (Liability) (AS22):- Deferred
Tax arising on account of timing difference and which are capable of
reversal in one or more subsequent periods, should be recognized using
the tax rate and tax laws that have been enacted or substantively
enacted. Deferred Tax Assets are not recognized unless there is
sufficient assurance with respect to reversal of the same to future
In accordance with Accounting Standard 22, Accounting for Taxes on
Income issued by the institute of Chartered Accountants of India, the
company has accounted for deferred tax.
9. Foreign Currency Transactions :- Transactions denominated in
foreign currencies are normally recorded at the average exchange rate
specified in the shipment bill at the time of the transaction.
Any income or expenses on account of exchange difference either on
settlement or on translation is recognized in the Profit and Loss
However year end balances of Foreign currency account and Debtors are
translated using the rate prevailing at the year end (i.e.31st March)
as per requirement of AS-12