Fixed assets are stated at historical cost. The cost includes price,
duties and taxes, freight, installation cost and other incidental
Depreciation on all Fixed Assets are provided on straight line method at the rates prescribed by schedule
XIV to the Companies Act, 1956
Inventories are valued as under:
Raw Materials - at landed cost
Work - in - Process - at works/direct cost
Finished Goods - at works cost or realisable value, whichever is lower
Processing cost on customers' material - at conversion cost
Scrap - at realisable value
Investments are stated at cost and income thereon is accounted for on
accrual or receipt, whichever is earlier.
Foreign Exchange Transactions
Gain/loss arising out of revenue transactions are credited / charged
to profit and loss account.
Expenditure During Construction
Expenditure during construction period is grouped under capital work in progress. Upon commencement of
commercial production, the expenditure is allocated to Buildings and Plant and Machinery in the ratio of
their direct cost.
Income on Lease Transactions
Income on Lease Transaction is recognised on accrual basis and is in
accordance with the guidance note on accounting for leases in respect of business concluded during the
Accounting of Works Contract
Income from Works Contract is accounted on percentage of completion basis.
Contributions to Provident fund, Superannuation fund and Gratuity fund
to secure Retiral Benefits to Employees are charged to revenue. Leave
encashment benefits are accounted for on the basis of acturial valuation.