The accounts are prepared under the historical cost convention and in
accordance with generally accepted accounting practices.
b. FIXED ASSETS:
Fixed Assets are stated at cost less accumulated depreciation. Cost of
acquisition of fixed assets is inclusive of freight, duties, taxes,
incidental expenses relating to the cost of acquisition and the cost of
installation/erection, as applicable.
Depreciation is provided under Written Down Value method in accordance
with the rates and rules prescribed under schedule XIV of the Companies
Act 1956. The company has used the following rates to provide
depreciation on its fixed assets.
Valuation of inventories is made as under:
i) Finished goods are valued at lower of cost or net realizable value.
ii) Raw materials, work-in-progress and stores and spares are valued at
cost, following the FIFO Basis.
iii) Work-in-Progress, raw materials, stores, spares are valued at cost
except where the net realizable value of the finished goods they are
used in is less than the cost of finished goods and in such an event,
if the replacement cost of such materials etc., is less than their
books value, they are valued at replacement cost.
iv) By-products and scrap are valued at net realizable value.
Sales are accounted for net of discounts and rebates. Export Sales are
initially accounted at the exchange rate prevailing on the date of
documentation/invoicing and the same is adjusted with the difference in
the rate of exchange arising on actual receipt of proceeds in foreign
f. FOREIGN EXCHANGE TRANSACTIONS:
i) Transactions in foreign currency are initially accounted at exchange
rate prevailing on the date of transaction, and adjusted appropriately,
with the difference in the rate of exchange arising on actual
receipt/payment during the period under report.
ii) At each Balance Sheet date Foreign currency monetary items being
receivables/ payables are reported using the rate of exchange on that
date and difference is recognized as income or expense. Foreign
currency non-monetary items are reported using the exchange rate at
which they were initially recognized.
iii) In respect of forward exchange contracts in the nature of hedges.
Premium or discount on the contract is amortized over the term of the
contract. Exchange differences on the contract are recognized as profit
or loss in the period in which they arise.
g. CONTINGENT LIABILITIES:
Contingent Liabilities are not recognized in the accounts, but are
disclosed after a careful evaluation of the concerned facts and legal
For the purpose of the above details the Status of the ''Suppliers''
under the Act has been determined to the extent of and based on the
information furnished by the respective parties, and has accordingly
been relied upon by the company and its auditors.