1. Basis of Accounting : The financial statements are prepared on accrual and are in accordance with the
historical cost convention, as modified by revaluation of certain fixed assets.
2. Tangible Fixed Asset : Fixed assets are recorded at cost as increased or reduce due to exchange
fluctuations, and roll over changes and as modified by the revaluation of certain fixed assets. Cost
incidental to acquisition, installation, commissioning and related internal costs and interest paid on funds
borrowed to finance the assets until the assets are ready for commercial use.
3. Depreciation : Depreciation on fixed assets is provided under straight line method. The applicable rates
are as provided under Schedule XIV to the Companies Act, 1956.
4. Stocks : Raw materials are valued at cost on FIFO basis. Finished goods and work-in-progress are valued
at lower of cost or net realisable value. In the case of finished goods and work-in-process cost is average
cost and includes all direct expenditure and related production overheads Finished goods also include excise
duty. Cost of raw materials, and consumable include transport and handling costs.
5. Sales : Sales include excise duty and represent invoice of goods sold as reduced by quality claims and
rebates. Sale of goods is recognised on transfer of property of goods, as per agreed terms.
6. Modvat : Modvat on purchases of raw and other materials are deducted from the cost of such materials
respect of import.
7. Deferred Revenue Expenses : Share/Debenture issue expenses are amortised over a period of ten years from
the commencement of commercial production and other deferred revenue expenses are amortised over a period of
three to five years, depending upon the nature and the benefit of such expenditure in future.