Fixed Assets are stated at cost of acquisition inclusive of freight,
duties taxes incidental expenses.
Investments are stated at cost.
Depreciation on the assets of the Company except for Cigarette
Division is provided on written down value method as per schedule XIV
to the Companies Act, 1956. Depreciation on the assets of the
Cigarette Division is provided on straight line basis as per schedule
XIV to the Companies Act, 1956.
Sales are inclusive of ocean freight, excise duty and packing
a) Raw Materials and Work in progress are valued at cost or
Realisable value which ever is less.
b) Stock-in-trade is valued at lower of cost or realisable value,
except tobacco stocks.
c) Tobacco stocks are valued at Market value.
Import licences are taken as income to the extent they are disposed
upto the date of finalisation of accounts.
Foreign Currency Translation:
1. Export sales in foreign currency are accounted for at the
exchange rate prevailing at the time of sale. Gain/loss arising
out of fluctuation in the exchange rates on subsequent
realisation is taken to revenue.
2. Foreign currency Bank Accounts are translated at the lower of
transaction rate/closing rate.
3. Fixed Assets are translated at the rate prevailing at the time
of acquisition of the asset.
4. Expenditure/income of foreign branches is translated at the
5. The Gain/loss on foreign exchange rate fluctuations relating to
current assets and liabilities is accounted for at the closing rate.
6. The Gain/loss arising out of translation referred to in para 2, 4
and 5 above is taken to revenue.
7. Retirement Benefits:
a) All the employees of the Company are entitled to retirement
benefits of Provident Fund, Gratuity and Superannuation.
Contribution to gratuity and superannuation fund are made on the
basis of demand raised by LIC, and charged to revenue accordingly.
Provident Fund contributions are accounted for at the prescribed
b) The above liabilities are funded with Trusts duly approved by
Income-Tax authorities (managed by LIC)/ paid to the Provident Fund
Commissioner, as the case may be.
C) Further, all the employees are eligible to leave encashment
benefit on retirements. Since, the future liability in respect of
this benefit cannot be ascertained and provided, the same is
accounted in the year of payment on retirement.