1. Accounting Conventions
Financial statements have been prepared on the accrual basis of
accounting, under the historical cost convention and are in accordance
with the Companies Act, 1956 and the applicable accounting standards
issued by the Institute of Chartered Accountants of India.
2. Consignment Sale
Consignment sale is accounted for on receipt of Consignment Note from
3. Fixed Assets
Fixed Assets are valued at cost less accumulated depreciation. Cost
includes expenses incurred during pre-operative period, inward freight,
duties, taxes and expenses incidental to acquisition and installation.
Inventories are valued as under:
i) Raw material at FIFO basis
ii) Work in Progress at cost including related overhead
iii) Finished Goods at lower of cost or net realisable value.
iv) Stores, Packing Materials & Chemicals are valued at FIFO basis
v) By-Products are valued at Net realisable value
Depreciation on fixed assets has been provided on straight line method
as per Schedule XIV of the Companies Act, 1956. Depreciation on assets
costing Rs.5,000/- or less has been charged at hundred percent.
6. Retirement Benefits
Provision for / contributions to retirement benefits scheme are made as
a) Provident Fund on actual liability basis
b) Gratuity on accrual basis assuming that all employees will retire at
the end of the financial year.
7. Revenue Recognition
a. Sales are recognised when goods are despatched to customers and are
recorded net of rebates and include excise duty.
b. Interest Income is recognised on time proportion method.
c. Insurance claims are recognised when the right to receive it is
The provision for taxation is ascertained on the basis of assessable
profits computed in accordance with the provisions of the Income Tax
Deferred tax is recognised, subject to the consideration of purdence,
on timing differences, being the difference between taxable income and
accounting income that originate in one period and are capable of
reversal in one or more subsequent periods. Deferred tax Assets are
recognised and carried forward to the extent that there is a reasonable
certainty that sufficient future taxable income will be available
against which such deferred tax assets can be realised.