A) BASIS OF PREPARING FINANCIAL STSTEMENTS.
i) The Financial Statements have been prepared under the historical
Cost Convention in accordance with the normally accepted accounting
principle and the provisions of the Companies Act, 1956, as adopted
consistently by the company.
ii) Accounting policies not specifically referred to otherwise are
consistent and. in accordance with generally accepted accounting
B) FIXED ASSETS AND DEPRECIATION.
i) Fixed Asset is generally stated at cost of acquisition or
revaluation amount less Value of Demolished & Discarded Assets and
ii) Depreciation on Fixed Assets other than land is provided on
straight line method at the rates specified and in the manner
prescribed in the schedule XIV of the Companies Act 1956.
iii) In respect of revalued assets, depreciation to the extent that it
pertains to the amount of revaluation, is transferred from the
Revaluation Reserve to the Profit & Loss account.
i) Long term investments are stated at cost.
ii) Diminution in the value of long Term investments is Provided for
where it is considered other than Temporary in nature.
Inventories are taken valued and certified by management and valuation
is on following basis:-
i) Raw Material, Stores and spares are generally valued at cost
determined on first in first out basis.
ii) Work in Progress is valued at direct cost.
iii) Finished Goods are valued at cost or market value whichever is
iv) Scrap is valued at estimated realizable value. v) Loose Tools are
valued at estimated cost.
E) BASIS OF ACCOUTING.
All items of income and expenditure having a material bearing on the
financial statement are accounted for on accrual basis.
F) EXCISE DUTY.
Excise duty on the finished goods manufactured is accounted for on
clearance of goods from the factory premises.
i) Sales are net of excise duty & Sales Tax
ii) Other income is recognized on accrual basis except when the
realization of such income is uncertain.
H) ACCOUNTING FOR FOREIGN CURRENCY TRANSACTION.
Transactions denominated in foreign currencies are normally recorded at
the exchange rate prevailing at the time of transactions.
I) RETIREMENT BENEFITS
Leave encashment of leave is permitted only on the retirement, hence no
provision is made for leave encashment of the present employees for
their I in-availed leave.
J) PROVISION FOR CURRENT AND DEFFERED TAX
Provision lor current income tax is made on the assessable income at
the tax rate applicable to the relevant assessment year. Deferred
income taxes are recognized for the future tax consequences
attributable to timing differences between the financial statement
carrying amounts of existing assets and liabilities and their
respective tax bases. Other deferred tax assets are recognized and
carried forward to the extant that there is reasonable certainty of