Finance department regulates the financial transactions of the company.

The finance function

provides authorization and control to all the subsystem to utilize money more efficiently
through a well-designed mechanism the company prepares profit and loss accounts, balance
sheet, budgets, financial performance statement, and employee cost analysis etc. for the
findings of the operating results, financial positions, future prospects and many of other
objects. Statement of operating results derives the performance of transactions. This reveals
the probability of the concern during the year. The software used for preparing final accounts
is Tally 9 Prime, dBase software for payroll and payslip and Winman software for tax
calculation.

4.12.1 Functions

i. Auditing and finalization of works with the assistance of all other members of finance
department.
ii. All the accounts relating to personnel.
iii. Accounting of purchase bill.
iv. Preparation of payrolls.
v. Accounting of bank and cash transactions
vi. Calculation of central excise
vii. Sales accounting and sales tax matters.

4.12.2 Functions of Finance Manager

i. Estimation of capital requirements

ii. Ensuring a fair return to the investors
iii. Make sure the suitable availability of funds
iv. Laying down the optimum and suitable capital structure for the company
v. Adequate control of cash flows.
vi. Preparation, analysis and interpretation of financial statements
vii. Facilitate maximum utilization of fund
viii. Scrutinize claims and recommend payment
Significant Accounting Policies

1. Accounting conventions
 The financial statements are prepared under historical cost convention on accrual
basis and in compliance with the Companies Act 1956

2. Fixed Assets

Fixed assets are stated at cost less depreciation. Assets and liabilities are consistently
being recorded at historical cost.

3. Depreciation

Depreciation on fixed assets has been provided as per the rate indicated in schedule
XIV of the Companies Act, 1956 under written down value method.

4. Inventories
a. Finished goods are valued at cost or market price, whichever is less for
arriving at the cost and excise duty is also taken into consideration.
b. Work-in-progress is valued at the cost after considering overheads excluding
financial charges.
c. Raw materials, material in progress, spare, stores and loose tolls are valued at
cost, cost means weighted average.
d. Scraps are valued in realizable value.
e. Goods in transit are valued at cost.
5. Sales
a. Sales compromise sale of goods and service and includes Excise duty
b. Price valuation claims on sales affected are accounted for on accrual basis
c. The reprocessed transformer oil is accounted at current purchase prices by
crediting the difference to miscellaneous income.
6. Consumption
a. Loose tools issued to shop floor are treated as consumed and written off as
such.
b. Consumption of materials for production is completed on a derived basis
7. Retirement benefits
Gratuity and leave encashment are accounted for on accrual basis in compliance with
accounting standards. The amount was determined on the basis of actuarial valuation
conducted at the end of the year. As non-cumulative portion of leave encashment is
not applicable to the company the same is not considered.
8. Liability on material in transit
The liability on account of the bank charges and other expenses on materials in transit
on the date of closing is accounted on accrual basis.
9. Research and development
Capital expenditure on research and development is treated as addition to fixed asset
and revenue expenditure on R & D is charged to profit and loss account under
appropriate heads in the year in which it is incurred.
10. Contingent liability

Contingent liabilities are not provided for, but disclosed in note on accounts.