1) Basis of Accounting
The financial statements of the Company are prepared under the
historical cost convention on an accrual basis and in accordance with
the generally accepted accounting principles and Accounting Stan- dards
issued by the Institute of Chartered Accountants of India.
2) Fixed Assets and Depreciation
(a) Fixed assets are stated at cost less accumulated depreciation. Cost
includes all related expenses incurred up to the date of putting them
(b) Depreciation is provided at the rates and in the manner specified
in Schedule XIV of the Companies Act, 1956 as follows:
- In respect of Plant & Machinery and Buildings : Straight Line Method
- In respect of Furniture & Fixtures, Patterns, Vehicles,
Office equipment, Computers and Misc. Equipment. : Written Down Value
(a) Raw Materials, Components and Consumable Stores are valued at cost
on first in first out basis (FIFO).
(b) Finished goods and Work-in-progress are valued at lower of cost and
net realizable value on full absorption cost basis.
Sales includes excise duty are accounted for on dispatch of goods to
the customers that generally coin- cides with the transfer of risk and
5) Foreign Currency Transactions
Transactions denominated in foreign currencies are recorded at the
exchange rate prevailing at the time of transaction.
Monetary items denominated in foreign currencies at the year end not
covered by forward exchange contracts are translated at year end rates
and the difference is charged to the Profit and Loss Account.
6) Retirement Benefits
All the Employees of the Company are entitled to retirement benefits of
Provident Fund and Gratuity.
(a) Provision for Gratuity liability to employees is made on the basis
of actuarial valuation.
(b) Provision is made for value of unutilized leaves due to employees
at the end of the year.
(c) Deferred Tax
Deferred Tax is accounted for by computing the tax effect of timing
differences that arise during the year and reverse in subsequent
Assets acquired under finance leases on or after April 1, 2001 are
recognized at the lower of the fair value of the leased assets at
inception and the present value of minimum lease payments. Lease pay-
ments are apportioned between the finance charge and the reduction of
the outstanding liability. The finance charge is allocated to periods
during the lease term at a constant periodic rate of interest on the
remaining balance of the liability.