i) Fixed Assets
(a) Fixed assets are stated at their original cost, which includes
duties, taxes and incidental expenses.
(b) Depreciation has been provided on written down value method on
pro-rata basis at the rates and manners prescribed by Schedule XIV of
the Companies Act, 1956.
Investments are carried at cost and provision is made in the accounts
for diminution in the value of quoted investment
iii) Inventories Valuation
Raw materials, stores and spares and packing materials at cost, work in
process at raw materials cost plus conversion cost depending on the
stage of completion, finished goods at cost or net realisable value
whichever is less and waste/damaged goods etc. at estimated realisable
iv) Employees Benefits
a) The gratuity is charged to revenue on cash basis, so no provision
has been made for gratuity. The accrued liability as on 31st March,
2012 in respect of gratuity is Rs.24.97,325/-(Previous year
b) Leave encashment - provision for Leave encashment is accounted and
provided for at the end of the financial year.
c) Provident Fund- Liability is determined on the basis of contribution
as required under the statutory rules and charged to profit and loss
v) Export Sales
The export sales are accounted for on CIF as well as on FOB basis in
consonance with the nature of contract executed with the foreign
buyers. Other sales are net of Vat
vi) Reorganization of Income & Expenditure
All incomes and expenditures are accounted for on accrued basis except
insurance claims, which are being accounted for on receipt basis.
vii) Contingent Liabilities
Contingent liabilities are disclosed by way of Notes to Balance Sheet.
Provision is made in the accounts in respect of liabilities which are
acknowledged by the company and which have material effect on the
position stated in the balance sheet.
viii) Impairment of assets
At each balance sheet date, the company reviews the carrying amount of
its fixed assets to determine whether there is any indication that the
assets suffered any impairment loss. If any such indication exists, the
recoverable amount of the assets is estimated in order to determine the
extent of impairment of loss. Recoverable amount is higher of the
assets net selling price and value in use. In assessing value in use,
estimated future cash flows expected from the continuing use of the
assets and from its disposal are discounted to their present value
using a pretax discount rate that reflects the current market
assessment of time value of money and the risks specific to the assets.
ix) Taxes on Income including Deferred Tax
Current tax is determined as the amount of tax payable in respect of
income for the period. Deferred tax is recognized subject to the
consideration of prudence in respect of deferred tax assets, on timing
differences, being the difference between the taxable income and
accounting income that originate in one year and are capable of
reversal in one or more year. Deferred tax assets are not recognized
unless there is a sufficient assurance with respect to its reversal in
x) Foreign Currency transactions
Transaction denominated in foreign currency is recorded at the exchange
rate prevailing at the date of transaction. Exchange differences
arising on settlement / conversion of foreign currency transaction are
included in the profit and loss account.