A. Basis of Accounting: The Accounts have been prepared on the basis
of historical costs and in accordance with the applicable accounting
standards except where otherwise stated. For recognition of Profit &
Loss, Mercantile system of Accounting is followed except certain
Expenditure & Income, which are accounted for, on payments/Receipts
basis on account of uncertainties.
B. Fixed Assets: Fixed Assets are stated at the cost of acquisition
less accumulated depreciation. The cost of assets comprises its
purchase price and other directly attributable cost of bringing the
Asset to working condition for its intended use. This cost also
includes financing cost relating to specific borrowings attributable to
Fixed Assets. The Company had not availed any foreign currency loan for
acquisition of Fixed Assets thereby there is no adjustment in cost of
fluctuation in exchange rate.
C. Depreciation: Depreciation is provided under the straight-line
method at the rates and in the manner specified in Schedule XIV to the
Companies Act, 1956. Depreciation on addition during the year provided
on pro-rata basis from the date of addition.
D. Inventories: Inventories (Other than Stores & Spares) are valued at
the cost or estimated net releasable value. The cost includes excise
duty when paid.
E. Revenue Recognition:
a. Sales are exclusive of VAT (Sales Tax), Insurance and Freight
Charges where applicable.
b. The Expenses (Other than provision for Gratuity) are accounted on
F. Foreign Currency Transaction: The Company has not indulged in the
Foreign Currency Transaction. Therefore accounting of foreign currency
transaction is out of the purview of accounting policy.
G. Investments: Investments are valued at cost of acquisition and
H. Research & Development: Research & Development expenses of revenue
nature are charged to the Profit & Loss Account of the year in which it
is incurred and that of capital nature are shown as addition to
respective Fixed Assets.
I. Retirement Benefits:
a. The company is not covered under the Provident Fund Act and ESIS
b. Gratuity Liability is accounted as and when due and paid.
J. Marketing Expenditure: The Expenses incurred on marketing and market
related activities are charged to Profit & Loss Account of the year in
which it is incurred.
K. CENVAT: The Company is not eligible for CENVAT Benefits for domestic
L. Material Events: occurring after Balance Sheet date are taken into
M. Contingent Liabilities: Contingent Liabilities are not provided for
and are disclosed by way of notes wherever applicable.
N. Taxes on Income : Keeping in view the carry over losses and
unabsorbed depreciation as per Income Tax return for the year ending
31/03/2011, the Company has not recognised Deferred Tax Assets, in
respect of carry over losses, unabsorbed depreciation and items of
timing difference between the accounting income and taxable income for
the year, as there is reasonable uncertainty that sufficient taxable
income in near future shall be available against which such Deferred
Tax Assets can be realised against tax liability.