(i) All revenues, expenses, assets and liabilities are accounted for on
accrual basis except,
(a) revenue/expenses in respect of insurance claims, interest etc. is
recognised only when it is reasonably certain that the ultimate
collection/payment will be made;
(b) contingent liabilities not provided for are disclosed by way of
notes to the Accounts.
(ii) FIXED ASSETS
Fixed Assets are recorded in the books at cost of acquisition
(including expenditure on installation) or construction. Gross Block at
the year end is stated at cost as increased by appreciation entered in
the books on revaluation of assets made as of 30th April, 1961 and
again as of 1st November, 1971.
The Company's policy for providing depreciation on fixed assets is as
(a) in respect of assets installed prior to 1st November, 1976 on
written down value method in accordance with Section 205(2)(a) of the
Companies Act, 1956:
(b) in respect of Building, Machinery and Equipment and Moulds & Cores
installed on or after 1st November,1976 and upto 31st October, 1981 and
all other assets installed on or after 1st November, 1976 and upto 31st
Oct, 1987, on straight line method under Section 205(2)(b) at the rates
determined considering the specified life of the asset at the time of
its installation as per the Circular dated 21st May, 1986 issued by the
Department of Company Affairs, Government of India;
(c) in respect of Building, Machinery and Equipment and Moulds & Cores
constructed/installed on or after 1st November, 1981 and upto 31st
March, 1993 at the revised straight line rates arrived at on the basis
of useful economic life of these assets as under, certified by the
Valuers and Chartered Engineers.
Building - Useful economic life 50 years
Machinery & Equipment - 10/15/20/25 years as identified
Moulds - 10 years
(d) in respect of assets other than Building, Machinery and Equipment
and Moulds & Cores installed on or after 1st November, 1987 and upto
31st March, 1993 and all assets installed after 31st March, 1993 at
straight line rates prescribed in Schedule XIV to the Companies Act,
with a view to fall inline with the Accounting Standard for
depreciation,from accounting year 1998-99 the Company has decided to
charge depreciation on appreciation entered in the books by writing up
the fixed assets to appraised values as determined by the independent
valuers as of 30th April, 1961 and again as of 1st November 1971 (also
refer note no.15).
Investments are stated at cost of acquisition.
Inventories are valued at Lower of cost (weighted average and Duties
thereon) and Net realisable value. Cost of own manufactured goods is
determined on standard cost principles and comprise of raw materials,
direct labour, production overheads and excise duty paid.
Sales include excise duty recovered but exclude sales tax.
Provision is made in the books each year, based on actuarial valuation
by charging to Profit and Loss Account. In addition, gratuity liability
falling due during the year is charged to Profit and Loss Account.
However, Gratuity liability has not been funded.
(viii) RESEARCH AND DEVELOPMENT
Revenue Expenditure on research and development is charged to Profit &
Loss Account in the year in which it is incurred. Capital Expenditure
on research and development is shown as an addition to fixed assets.
(ix) FOREIGN CURRENCY TRANSACTIONS
Transactions in foreign currency are recorded at the rate of exchange
in force at the time the transactions effected. All exchange
differences arising in respect of foreign currency transactions are
dealt with in Profit & Loss Account (except those relating to
acquisition of Fixed Assets which are adjusted in the cost of assets).
All Foreign currency assets and liabilities as at the Balance Sheet
date are restated at the applicable exchange rates prevailing on that
date and any material differences arising on such restatement are dealt
with in the Profit and Loss Account except those relating to
acquisition of fixed assets.