i) Fixed Assets:
a) Fixed Assets are shown at cost of acquisition including direct
material, labour and overheads if any, less accumulated depreciation
and less sold during the year.
b) Works under erection / installation / execution for capital works
are shown as Capital Advances and includes interest on borrowings and
advances to suppliers etc.
ii) Inventories :
a) Raw Materials, Stores, & Spares are valued at cost.
b) Finished Goods are valued at cost or market value whichever is
lower. Stock of purchased items traded is valued as lower of the landed
cost or realisable value.
iii) Depreciatian :
a) Depreciation on all fixed assets is provided on Straight Line
Method at the rates specified in the Schedule XIV to the Companies
Act, 1956. Depreciation on additions to fixed assets is charged on
b) Depreciation in respect of assets acquired and put to use for
implementation of the new project is grouped under Pre-Operative
iv) Encashment Of Leave and Other Retirement Benefits :
The company extends benefit of encashment of leave to its employees
while in service as well as on retirement. Encashment of leave
accumulated while in service is generally accounted when paid on yearly
basis. Further, any liability on this account is recognised only when
claim is received. Other retirement benefits such as Gratuity etc. are
recognised only when the liability for such payments arises.
v) Accounting For Miscellaneous Expenditure :
Preliminary Expenses (for New Project) and Share Capital Expenses /
Public Issue Expenses (for New Project) will be amortised over the
period of ten years from the year in which the commencement of
commercial production (for New Project) is started.