(a) Basis of Accounting
The accounts are prepared under historical cost convention on accrual
(b) Fixed Assets and Depreciation
Fixed assets are valued at cost of acquisition (net of modvat)
inclusive of any other cost attributable to bring the same to working
Depreciation is provided in accordance with Schedule XIV of the
Companies Act, 1956 on straight line method.
Finished goods and work in process are valued at cost or estimated net
realisable value whichever is lower. Byproducts are valued at estimated
net realisable value.
Raw materials, stores and spares are valued at cost on the basis First
In First Out.
(d) Revenue Recognition
Revenue in case of sale of goods is recognised when the ownership is
transferred to the buyer. Sales proceeds considered are net of duties
(e) Expenditure during construction
All revenue expenses transferred to 'Expenditure during construction'
account is allocated to capital cost of respective assets on their
(f) Retirement benefits
Superannuation is funded by payments to Life Insurance Corporation of
India. Gratuity is funded on the basis of actuarial valuation.
Liability for leave encashment benefit on retirement is provided for on
the basis of actuarial valuation.
(g) Foreign Currency Transactions
All transactions in foreign currency are converted at the exchange rate
on the respective date of transactions.
Any income or loss on account of exchange difference either on
settlement or on translation is recognised in the Profit and Loss
Account except in cases where they relate to acquisition of Fixed
Assets in which case they are adjusted to the carrying cost of such
Purchases are recognised on the basis of acceptance of goods by the
(i) Deferred Revenue Expenditure
Deferred Revenue Expenditure are amortised over a period of 3 to 5
years, depending upon the nature and the benefit of such expenditure in
(j) Prior Period Items
All prior period items which are material and arise in the current
period as a result of error or ommission in the preparation of prior
period's financial statement are separately disclosed in the current
statement of Profit and Loss.