(a) Basis of Accounting :
The accounts of the company are prepared under historical cost convention and in accordance with applicable
accounting standards except where otherwise stated. For recognition of income and expenses, mercantile
system of accounting is followed Discount to foreign buyers has been accounted for at the time of receipt of
its approval from Reserve Bank of India.
(b) Fixed Assets :
Fixed assets are stated at historical cost less accumulated depreciation. The cost of an asset comprises
its purchase price and any directly attributable cost of bringing the asset to working condition for its
(c) Depreciation :
Depreciation on fixed assets has been provided during the year on the
Written Down Value method at the rates and in the manner prescribed in
Schedule XIV to the Companies Act, 1956. The method of charging Depreciation has been changed from
Straightline Method to Written Down Value Method during the year. Consequently, an amount of Rs. 94,06,210
has been charged to Profit & Loss A/c which includes Rs. 48,22,991 as arrears of depreciation for previous
year. Had the Depreciation been calculated by applying Straight Line Method, the charge for the year would
have been lesser by Rs. 71,42,487.
(d) Inventories :
Inventories are valued as follows :
Raw Materials and other goods - at cost
Consumable stores - at cost
Finished goods - at cost or market price whichever is less.
(e) Gratuity and leave encashment :
The company has made provision for gratuity and Leave Encashment in Books.
(f) Foreign Currency Transactions :
Transactions arising in foreign Currencies during the year are converted at rates closely approximating to
those ruling on transaction date.