1. The financial statements of the company have been prepared in
accordance with generally accepted accounting principles in India and
comply in all material respects with the accounting standards notified
under the Companies (Accounting standards) Rules,2006 as amended and
the relevant provisions of Companies Act,1956. The financial statements
have been prepared on an accrual basis and under the historical cost
convention excepting revalued assets.
2. During the year ended 31st March, 2012, the revised Schedule VI
notified under Companies Act,1956, has become applicable to the
company, for preparation and presentation of its financial statements.
The adoption of revised schedule VI, does not impact recognition and
measurement principles followed for preparation of financial
statements. However it has significant impact on presentation and
disclosures made in financial statements. The company has also
reclassified the previous year figures in accordance with the
requirements applicable in current year.
3. Fixed assets are stated at cost, net of accumulated depreciation.
The cost comprises purchase price , borrowing costs if capitalisation
criteria are met and directly attributable cost of bringing the asset
to its working condition for the intended use. Any trade discounts and
rebates are deducted in arriving at the purchase price. Subsequent
expenditure is added to book value only if it increases the future
benefits from the existing asset.
4. Depreciation on fixed assets is calculated on the straight line
basis using the rates prescribed in Schedule XIV to the Companies
Act,1956.Assets costing upto Rs.5000/- are written off on pro-rata
basis in the year of acquisition.
5. Stock in trade is valued at lower of cost and net realisable value.
6. Sales Value is inclusive of Excise Duty but exclusive of VAT . Sale
is recognised on removal of goods from factory
7. Transactions in foreign currency are recorded using the exchange
rates on the date of accruing of the transaction. Balances in the form
of current assets and current liabilities outstanding on the date of
Balance Sheet are converted at the appropriate exchange rate as on the
date of balance sheet. Exchange difference arising out of fluctuation
in exchange rate is accounted for on realisation comparing the same
with initial transaction amount or converted amount on the date of
Balance Sheet comparing original amount as the case may be.
8. Government grants are accounted for on its becoming reasonably
certain that the ultimate collection will be made.
9. Provision for income tax is made on the basis of prevailing laws
and rates applicable for the relevant assessment year. Deferred
taxation is recognised for all the timing differences subject to the
consideration of prudence and virtual certainty in respect of deferred
tax assets in accordance with the accounting standared 22 Accounting
for taxation of income issued by the Institute of Chartered
Accountants of India.
10. Employee Benefits:
a PF and ESI are paid as per provisions of relevant statutes with the
authorities of respective state and are charged to statement of Profit
and Loss in the year to which it relates.
b. Gratuity being defined contribution is accounted for on accrual
basis in accordance with the Payment of Gratuity Act,1972
c. Accumulated leaves being short term compensated leaves are provided
for in the year of becoming due.