1. Basis of Accounting
Accounts have been prepared on the basis of Historical Cost Convention
and Going Concern Concept as per the accepted accounting principles and
the provisions of the Companies Act, 1956 except stated otherwise.
2. Fixed Assets
a. Fixed assets are stated at cost of acquisition, including taxes,
duties (net of MODVAT) and other identifiable direct expenses less accumulated depreciation.
b. Leasehold Land is amortised over the period of lease.
i. On buildings, plant & machinery (including weighing scale and
electric installation other than electrical installation for open end
machinery), as per the Straight Line Method at the rates specified
under Schedule XIV to the Companies Act, 1956.
ii. On remaining assets, as per Written Down Value Method at the rates
specified under Schedule XIV of the Companies Act, 1956.
4. Valuation of Inventories
Inventories are valued on the following basis :
i. Raw materials & goods in
process : At cost
ii. Finished goods : At lower of cost or market value.
iii. Stores, Spares & Tools : At cost
iv. Waste & Scrap materials : At realisable value
5. Retirement benefits
Company's gratuity liability is covered under Group Gratuity Scheme of
Life Insurance Corporation of India which is accounted for as and when
premium is paid to the L.I.C. or on actual payment to employees, not
covered under the scheme.
6. Excise Modvat Credit
Modvat Credit availed on the raw materials is accounted for in the books of accounts by reducing it from the
cost of raw materials consumed.
Liability on account of Excise duty in respect of finished goods not
cleared from the factory premises is accounted for, on clearance of goods from the factory premises.