| SYSTEM OF ACCOUNTING
The accounts are prepared on the basis of historical cost convention,
in accordance with the applicable accounting standards and on the
accounting principles of a going concern. All expenses and income to
the extent ascertainable with reasonable certainty are accounted for on
accrual basis.
OWN FIXED ASSETS
Own Fixed Assets are stated at cost less accumulated depreciation /
impairment loss, if any
LEASED ASSETS :
Lease hold assets are stated at lease cost/premium paid less amount
written off for the period of lease expires. Cost of Leasehold land is
written of equally over the period of lease. Lease hold is taken on
lease for the period of 99 years & 1/99 % is written off every years.
CAPITAL WORK-IN-PROGRESS
Interest, administrative and other pre-operative expenses are carried
forward under capital work- in-progress to be allocated to the
respective fixed assets on installation of the same.
INVESTMENTS
Long-term investments are stated at cost. In case, there is a permanent
diminution in the value of investment, provision for the same is made
in the accounts.
INVENTORIES
Inventories of stores and spare parts are valued at or below cost after
providing for cost of obsolescence and other anticipated losses,
wherever considered necessary. Cost is computed on first in first out
basis for all items of inventory.
Finished goods and material-in-process include cost of conversion and
other costs incurred in bringing the inventories to their present
location and condition.
Inventories of raw material are valued at cost or net realizable value
which is lower after providing for cost of obsolescence and other
anticipated losses, wherever considered necessary. Cost is computed on
first in first out basis for all items of inventory.
REVENUE RECOGNITION :
Dividend income is recognized as & when received.
Interest income is recognized on time proportion basis (on mercantile
system of accounting) taking into account the amount outstanding from
time to time & rate applicable.
BORROWING COSTS
Borrowing costs attributable to the acquisition and construction of the
assets are capitalised as part of the cost of respective assets up to
the date when such asset is ready for its intended use. Other borrowing
costs are charged to the revenue.
DEPRECIATION / AMORTISATION
Premium on leasehold land is amortised over the period of lease.
Depreciation on Fixed (TANGIBLE) Assets is provided on Straight Line
Method on pro-rata basis with reference to month of addition/ deletion
of respective assets at the rates specified in Schedule XIV to the
Companies Act, 1956.
Depreciation on Intangible Assets such as software purchased is written
off over a period of three years.
FOREIGN EXCHANGE TRANSACTIONS
Transactions in foreign currency are recorded at the rate of exchange
in force at the date of transaction. Foreign currency assets and
liabilities, other than for financing fixed assets are stated at the
rate of exchange prevailing at the year end and resultant gains/losses
are recognised in the Profit and Loss Account except in cases covered
by forward foreign exchange contracts, these are translated at the
contracted rates and resultant gains/ losses are recognised over the
life of the contracts.
RETIREMENT BENEFITS
Liability in respect of retirement benefits is provided and charged to
Profit and Loss Account as follows:
Provident/Family Pension Fund: at a specified percentage of
salary/wages for eligible employees, if any Leave Encashment: as
determined on the basis of accumulated leave at the credit of the
employee as at the year end, as per Company's Rules.
Gratuity liability as at the year-end is provided as per the provisions
of 'The Payment of Gratuity Act, 1972
PROVISION FOR CURRENT & DEFERRED INCOME TAX
Provision for current tax is made on the basis of estimated taxable
income for the current accounting year in accordance with the Income
Tax Act, 1961.
The deferred tax liability for timing differences between the book and
tax profits for the year is accounted for, using the tax rates and laws
that have been substantively enacted as of the balance sheet date.
Deferred tax assets arising from timing differences are recognised to
the extent there is reasonable certainty that this would be realised in
future.Net of assets minus liability is provided in books as deferred
tax liability.
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