(i) Basis of accounting
(a) The Company prepares its accounts under historical cost convention
and on accrual basis except otherwise stated, in accordance with the
normally accepted accounting principles.
(b) Revenue from sale of goods is recognized on passage of title to the
customers, which generally coincides with delivery. Revenue from
services rendered is recognized on rendering of services to the
(c) Bonus including ex-gratia payable and leave salary payable to the
employees, as per consistent practice, are accounted for on cash basis.
(d) Dividend on Investments in shares and refunds of excise and other
levies/taxes are accounted for on acceptance/actual receipt basis.
(ii) Fixed Assets:
Fixed Assets are stated at cost of acquisition net of cenvat and
inclusive of freight, duties, and cost of finance during construction
period and expenses related to acquisition, installation, erection and
Investments that are readily realizable and intended to be held for not
more than a year are classified as current investments. All other
investments are classified as long term investments. Investments are
carried and valued at cost. Profit or loss if any on the same are
accounted for upon their disposal/Sale.
(a) Depreciation on fixed assets has been provided for on the
straight-line method at the rates and in the manner prescribed, under
schedule XIV of the Companies Act, 1956.
(b) Depreciation on fixed assets added during the year is provided on
Pro-rata with reference to the month of addition/deletion, except for
assets costing Rs.5, 000/- or less on which 100% depreciation is
(c) Depreciation includes amount written off in respect of leasehold
properties over the respective lease period.
(v) Valuation of Inventories:
Inventories are valued as under:
Raw Materials At lower of cost or net realizable value.
Finished goods At lower of cost (including Excise Duty)
or net realizable value.
Work-in-Progress At lower of cost or net realizable value.
Cost includes direct materials, labour cost
and manufacturing overheads based on
normal operating capacity
Stores & Spares At lower of cost or net realizable value.
Wastes & Others At net realizable value.
The cost of inventories comprises of all costs of purchase, Freight,
Taxes & Duties costs of conversion and other cost directly attributable
to the acquisition thereof. For arriving at the cost of inventories,
the FIFO cost formula along with the retail method for measurement of
cost has been adopted.
(vi) Retirement Benefits and other Employee Benefits:
a. Companys contributions to Provident Fund and Employees State
Insurance Fund are charged to the Profit & Loss Account of the year
when the contributions to the respective funds are due.
b. Provision has been made for the liability on account of Gratuity
payable to employees, which is unfunded . plan of the company.
Sales are inclusive of sales tax and excise duty and shown net of sales
(viii) Other Income:
Interest income on Fixed Deposits is accounted for on accrual basis.
Dividend and other interest income are accounted for as and when
(ix) Excise Duty:
Excise Duty is accounted for at the point of manufacture of goods and
accordingly is considered for valuation of finished goods stock lying
in the factory as on the Balance Sheet date.
(x) Contingent Liabilities:
Contingent Liabilities that are not provided for have been disclosed by
way of Notes to the Accounts.
(xi). Income tax:
Provision for Tax comprises of both current and deferred taxes.
Deferred tax is accounted for by computing the tax effect of timing
differences which arise during the year and reversal of timing
differences of earlier years, subject to consideration of prudence.
Deferred Tax is measured based on the tax rates and the tax laws
enacted or substantively enacted on the Balance Sheet date.
(xii) Borrowing costs :
The borrowing costs other than relating to the acquisition /
construction of assets are recognised as an expense in the financial