1. Accounting Convention
Accounts are maintained on an accrual basis under historical cost
2. Fixed Assets and Depreciation:
* The Fixed assets are stated at the cost of acquisition/
construction-less accumulated /depreciation thereon.
* Cost includes inward freight, duties, taxes incidental expenses to
acquisition /installation and other preoperation expenses.
* Depreciation on fixed assets have been provided on straight line
method (SLM) at the rates specified in scheduled XIV of the Companies
* On the assets sold/discarded during the year depreciation is provided
on to the date of sale or discarding.
* On the assets acquired/put to use during the year depreciation is
provided on pro-rata basis from the date of acquisition/ put to use of
Investments are stated at cost of acquisitoin.
Inventories are valued as follows:
1. Raw Material : At Cost on FIFO Basis
2. Stores : At Cost on FIFO Basis
3. Finished Goods : At Cost or Net realisable value whichever is
5. Foreign Currency Transaction:
Transactions completed during the year are adjusted on actual basis.
Year-end balances of foreign currency transaction are translated at the
year end rates and the corresponding effects have been given in the
6. Retirement Benefits:
* Provision for Gratuity liability is based on the premium demanded by
LIC in respect of employees covered under group gratuity scheme of LIC
and on accrual basis in respect of employees not covered under the
* Provision for leave salary has been made on the actual basis
7. Revenue Recognition:
i. Sale of goods is recognised at the point of dispatch of finished
goods to customers. Sales comprise of sale price of goods including
excise duty but excludes sales tax.
ii. Interest receivable on security deposit accounted for an accrual
iii. Dividend income is accounted for as and when the same is
8. Deferred Taxation:
The liability of Company is estimated considering the provision of the
Income Tax, 1961. Deferred tax is recognised subject to the
consideration of prudence, on time difference being the differences
between taxable income and accounting income that originate in one year
and capable of reversal in one or more subsequent years.
9. Miscellaneous Expenditure
Preliminary Expenses and Research & Development Expenses incurred are
being written off over a period of 5 Years from the year in which these