(I) These accounts are prepared on the historical cost basis and on the
accounting principles of a going concern.
(ii) Accounting policies not specifically referred to otherwise are
consistent and in consonance with generally accepted accounting
(I) The Company follows the mercantile system of Accounting and
recognizes income and expenditure on accrual basis.
(ii) Revenue is not recognized on the grounds of prudence, until
realized in respect of liquidated damages, delayed payments as recovery
of the amounts are not certain.
(a) Fixed assets are stated at cost less accumulated depreciation. Cost
of acquisition of fixed assets is inclusive of freight, duties, taxes
and incidental expenses thereto.
(b) Capital Expenditure with respect to Research and Development
Activities is capitalized from the date of completion and ready for
Depreciation and Amortization:
(i) Depreciation is provided on straight line method on pro-rata basis
and at the rates and manner specified in the Schedule XIV of the
Companies Act, 1956.
(ii) Preliminary Expenses are amortized over the period of 10 years.
iii) Depreciation on Technical Know how not created because revenues
relating to the same not generated during the financial year.
Research and Development Expenses:
Costs related to internal research and development programs are
expensed as incurred.
Borrowing costs attributable to the acquisition or construction of
qualifying assets are capitalized as part of the cost of such assets. A
qualifying asset is one that necessarily takes substantial period of
time to get ready for intended use. All other borrowing costs are
charged to revenue.
Inventories are valued at cost or market price which ever is lower.
At each balance sheet date, the Company reviews the carrying amounts of
its fixed assets to determine whether there is any indication that
those assets suffered an impairment loss. If any such indication
exists, the recoverable amount of the asset is estimated in order to
determine the extent of impairment loss. Recoverable amount is the
higher of an asset''s net selling price and value in use. In assessing
value in use, the estimated future cash flows expected from the
continuing use of the asset and from its disposal are discounted to
their present value using a pre-discount rate that reflects the current
market assessments of time value of money and the risks specific to the
Reversal of impairment loss is recognized immediately as income in the
Profit and Loss account.
The Company has made provision for the gratuity to its employees as per
the provisions of the Payment of Gratuity Act, 1972