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Accounting Policies of Amal Ltd. Company

Mar 31, 2016

Corporate Information

Amal Ltd is a public company domiciled in India and incorporated on July 04, 1974 with the Registrar of Companies, Maharashtra under the provisions of the Companies Act, 1956. The shares of the Company are listed on ASE and BSE. The Company was incorporated under the name Piramal Rasayan Ltd on July 04, 1974. Its name was subsequently changed to Amal Rasayan Ltd by the said Registrar of Companies on November 10, 1986 and further to Amal Products Ltd on November 23, 1995 and further to its present name, that is, Amal Ltd on September 11, 2003. The company is engaged in the manufacturing of Specialty Chemicals (Sulphuric Acid | Oleum | Sulphur Dioxide | Sulphur Trioxide).

Basis of preparation

The Financial Statements are prepared on an accrual basis of accounting and in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP), and comply in material aspects with the Accounting Standards specified under Section 133 of the Companies Act, 2013 (Act) read with Rule 7 of the Companies (Accounts) Rules, 2014. The Financial Statements have been prepared under the historical cost convention on accrual basis, except for certain fixed assets which are carried at revalued amounts. The significant Accounting Policies adopted by the Company are detailed below.

Summary of significant Accounting Policies

01. Presentation and preparation of Financial Statements:

The Financial Statements have been prepared in accordance with the requirements of the information and disclosures mandated by Schedule III of the Companies Act 2013, applicable Accounting Standards, other applicable pronouncements and regulations. The amounts and disclosures included in the Financial Statement of the previous year have been reclassified to conform to current year''s presentation.

02. Use of estimates:

Preparation of the Financial Statements in conformity with Indian GAAP requires the Management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the Financial Statements and the results of operations during the reporting period. Although these estimates are based upon Management''s best knowledge of current events and actions, actual results could differ from these estimates. Differences between actual results and estimates are recognized in the period in which the results are known | materialized.

03. Fixed assets:

Fixed assets are carried at cost of acquisition including incidental expenses, less accumulated depreciation, amortization and impairment or amount substituted for cost on revaluation conducted by an independent surveyor in 1985-86.

Capital work-in-progress - Projects under which assets are not ready for their intended use and other capital work-in-progress are carried at cost, comprising direct cost, related incidental expenses and attributable interest.

04. Leased assets:

Operating lease rentals are amortized with reference to lease terms and other considerations.

05. Depreciation and amortization:

1. Cost of leasehold land is amortized over the period of the lease.

2. Other Fixed Assets :

i. Depreciation on Fixed Assets is provided on ''Straight Line Method'' basis as per the useful life and in the manner prescribed under Part C of Schedule II to the Companies Act, 2013.

The assets have been shown at the net value after deducting the amortization, impairment and depreciation funds. Depreciation is provided on historical cost or amount substituted for historical cost. The difference between depreciation on revalued amount and that calculated on original cost of assets revalued is transferred from Revaluation reserve to General reserve on retirement or disposal of the revalued asset as per Application guide on the provisions of Schedule II to the Companies Act, 2013 issued by the Institute of Chartered Accountants of India.

06. Impairment of assets:

The carrying amounts of assets are reviewed at each Balance Sheet date if there is any indication of impairment based on internal | external factors. An impairment loss will be recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is greater of the asset''s net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to the present value by using weighted average cost of capital. A previously recognized impairment loss is further provided or reversed depending on changes in circumstances.

07. Borrowing costs:

Borrowing costs in relation to acquisition and construction of qualifying assets are capitalized as part of cost of such assets up to the date when such assets are ready for intended use. Other borrowing costs are charged as expense in the year in which these are incurred.

08. Investments:

Investments that are intended to be held for more than a year, from the date of acquisition, are classified as long-term investments and are carried at cost. However, provision for diminution in value of investments is made to recognize a decline, other than temporary, in the value of the investments.

09. Inventories:

i. Raw materials, packing materials and fuel are valued at cost or net realizable value whichever is lower. Cost is arrived at on FIFO basis.

ii. Stores and spares other than specific spares for machinery are valued at cost. Cost is arrived at on FIFO basis.

iii. Materials - in - process and finished goods are valued at cost or net realizable value whichever is lower. Finished goods stocks are valued at full absorption cost (Including Excise duty).

iv. Materials in transit and in Bonded Warehouse are stated at the cost to the date of Balance Sheet.

10. Foreign currency transactions:

i. Initial recognition:

Transactions denominated in foreign currencies are recorded at the rate prevailing on the date of the transaction.

ii. Conversion:

At the year end, monetary items denominated in foreign currencies remaining unsettled are converted into rupee equivalents at the year-end exchange rates. Non monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction.

iii. Exchange differences:

All exchange differences arising on settlement and conversion of foreign currency transactions are included in the Statement of Profit and Loss.

11. Revenue recognition:

i. Sale of Goods:

Revenue is recognized when the significant risks and rewards of ownership of goods have passed to the buyer, which generally coincides with delivery. It includes excise duty but excludes value added tax and sales tax. Service income is recognized net of service tax when the related services are rendered.

ii. Lease rental income is recognized on accrual basis.

iii. Dividend income is accounted for in the year in which the right to receive the same is established.

iv. Interest income is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

12. Provisions, contingent liabilities and contingent assets:

A provision is recognized when an enterprise has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on Management estimate required to settle the obligation at the Balance Sheet date and adjusted to reflect the current Management estimates.

No provision is recognized for -

i. Any possible obligation that arises from past events and the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company; or

ii. Any present obligation that arises from past events but is not recognized because it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or a reliable estimate of the amount of obligation cannot be made.

iii. Such obligations are recorded as contingent liabilities. These are assessed continually and only that part of the obligation for which an outflow of resources embodying economic benefits is probable, is provided for, except in the extremely rare circumstances where no reliable estimate can be made.

iv. Contingent assets are not recognized in the financial statements since this may result in the recognition of income that may never be realized.

13. Employee benefits:

i. Defined contribution plan:

Contribution paid | payable by the Company during the period to Provident Fund, Employees'' Deposit Link Insurance Scheme, Officer Super Annuation Fund, Employees'' State Insurance Corporation, and Labour Welfare Fund are recognized in the Statement of Profit and Loss.

ii. Defined benefit plan:

Gratuity:

Gratuity liability is defined benefit obligation and is provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each financial year. The liability so provided is represented by creation of separate funds and is used to meet the liability as and when it accrues for payment in future. Actuarial gains | losses are immediately taken to the Statement of Profit and Loss.

Long-term leave encashment:

Long-term leave encashment is provided for based on actuarial valuation on project unit credit method carried by an actuary as at the end of the year. Actuarial gains | losses are immediately taken to the Statement of Profit and Loss.

iii. Short-term employee benefits:

Short-term leave encashment is provided at undiscounted amount during the accounting period based on service rendered by employees.

iv. Voluntary retirements:

Compensation payable under the Voluntary Retirement Scheme is being charged to the Statement of Profit and Loss.

14. Taxation:

i. Income tax expense comprises current tax and deferred tax charge or credit. Provision for current tax is made on the basis of the assessable income at the tax rate applicable to the relevant assessment year.

ii. The company is declared sick under Section 17(1) of SICA (Special Provisions), 1985 and hence the MAT under Section 115JB of the Income Tax Act, 1961 is not applicable.

iii. Deferred tax asset and deferred tax liability are calculated by applying tax rate and tax laws that have been enacted or substantively enacted by the Balance Sheet date. Deferred tax assets on account of timing differences are recognized, only to the extent there is a reasonable certainty of its realization. Deferred tax assets are reviewed at each Balance Sheet date to reassure realization.

15. Earnings per share:

The Company reports basic and diluted Earnings per share (EPS) in accordance with Accounting Standard 20 on ''Earnings per share''. Basic EPS are computed by dividing the net profit or loss for the period by the weighted average number of Equity shares outstanding during the period. Diluted EPS is computed by dividing the net profit or loss for the period by the weighted average number of Equity shares outstanding during the period adjusted for the effects of all diluted potential Equity shares except where the results are anti-dilutive.


Mar 31, 2015

Corporate Information Amal Ltd is a public company domiciled in India and incorporated on July 04, 1974 with the Registrar of Companies, Maharashtra under the provisions of the Companies Act, 1956. The shares of the Company are listed on ASE and BSE. The Company was incorporated under the name Piramal Rasayan Ltd on July 04, 1974. Its name was subsequently changed to Amal Rasayan Ltd by the said Registrar of Companies on November 10, 1986 and further to Amal Products Ltd on November 23, 1995 and further to its present name, that is, Amal Ltd on September 11, 2003. The company is engaged in the manufacturing of Specialty Chemicals (Sulphuric Acid | Oleum).

Basis of preparation

The financial Statements are prepared on an accrual basis of accounting and in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP), and comply in material aspects with the Accounting Standards specified under Section 133 of the Companies Act, 2013 (Act) read with Rule 7 of the Companies (Accounts) Rules, 2014. The financial Statements have been prepared under the historical cost convention on accrual basis, except for certain fixed assets which are carried at revalued amounts. The significant Accounting Policies adopted by the Company are detailed below.

Summary of significant Accounting Policies

01. Presentation and preparation of the Financial Statements:

The financial Statements have been prepared in accordance with the requirements of the information and disclosures mandated by Schedule III, applicable Accounting Standards, other applicable pronouncements and regulations. The amounts and disclosures included in the The financial Statement of the previous year have been reclassified to conform to current year's presentation.

02. Use of estimates:

The preparation of the financial Statements in conformity with Indian GAAP requires the Management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial Statements and the results of operations during the reporting period. Although these estimates are based upon the Management's best knowledge of current events and actions, actual results could differ from these estimates. Differences between actual results and estimates are recognized in the period in which the results are known materialized.

03. Fixed assets:

fixed assets are carried at cost of acquisition including incidental expenses, less accumulated depreciation, amortization and impairment or amount substituted for cost on revaluation conducted by an independent surveyor in 1985-86.

Capital work-in-progress – Projects under which assets are not ready for their intended use and other capital work-in-progress are carried at cost, comprising direct cost, related incidental expenses and attributable interest.

04. Leased assets:

Operating lease rentals are amortized with reference to lease terms and other considerations.

05. Depreciation and amortization:

1. Cost of leasehold land is amortized over the period of the lease.

2. Other fixed assets :

i. Depreciation on fixed assets is provided on 'Straight Line Method' basis as per the useful life and in the manner prescribed in Schedule II to the Companies Act, 2013. The assets have been shown at the net value after deducting the amortization, impairment and depreciation funds. Depreciation is provided on historical cost or amount substituted for historical cost. The difference between depreciation on revalued amount and that calculated on original cost of assets revalued is transferred from Revaluation reserve to General reserve on retirement or disposal of the revalued asset as per Application guide on the provisions of Schedule II to the Companies Act, 2013 issued by the Institute of Chartered Accountants of India.

06. Impairment of assets:

The carrying amounts of assets are reviewed at each Balance Sheet date if there is any indication of impairment based on internal | external factors. An impairment loss will be recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is greater of the asset's net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to the present value by using weighted average cost of capital. A previously recognized impairment loss is further provided or reversed depending on changes in circumstances.

07. Borrowing costs:

Borrowing costs in relation to acquisition and construction of qualifying assets are capitalized as part of cost of such assets up to the date when such assets are ready for intended use. Other borrowing costs are charged as expense in the year in which these are incurred.

08. Investments:

Investments that are intended to be held for more than a year, from the date of acquisition, are classified as long-term investments and are carried at cost. However, provision for diminution in value of investments is made to recognize a decline, other than temporary, in the value of the investments.

09. Inventories:

i. Raw materials, packing materials and fuel are valued at cost or net realizable value whichever is lower. Cost is arrived at on fifes basis.

ii. Stores and spares other than specific spares for machinery are valued at cost. Cost is arrived at on fifes basis.

iii. Materials - in - process and finished goods are valued at cost or net realizable value whichever is lower. finished goods stocks are valued at full absorption cost (Including Excise duty).

iv. Materials in transit and in Bonded Warehouse are stated at the cost to the date of Balance Sheet.

10. Foreign currency transactions:

i. Initial recognition:

Transactions denominated in foreign currencies are recorded at the rate prevailing on the date of the transaction.

ii. Conversion:

At the year end, monetary items denominated in foreign currencies remaining unsettled are converted into rupee equivalents at the year end exchange rates. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction.

iii. Exchange differences:

All exchange differences arising on settlement and conversion of foreign currency transactions are included in the Statement of Profit and Loss.

11. Revenue recognition:

i. Sale of goods:

Revenue is recognized when the significant risks and rewards of ownership of goods have passed to the buyer, which generally coincides with delivery. It includes Excise duty but excludes value added tax and sales tax. Service income is recognized net of service tax when the related services are rendered.

ii. Lease rental income is recognized on accrual basis.

iii. Dividend income is accounted for in the year in which the right to receive the same is established.

iv. Interest income is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

12. Provisions, contingent liabilities and contingent assets:

A provision is recognized when an enterprise has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to their present value and are determined based on Management estimate required to settle the obligation at the Balance Sheet date and adjusted to reflect the current management estimates.

No provision is recognized for –

i. Any possible obligation that arises from past events and the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company; or

ii. Any present obligation that arises from past events but is not recognized because it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or a reliable estimate of the amount of obligation cannot be made.

iii. Such obligations are recorded as contingent liabilities. These are assessed continually and only that part of the obligation for which an outflow of resources embodying economic benefits is probable, is provided for, except in the extremely rare circumstances where no reliable estimate can be made.

iv. Contingent assets are not recognized in the financial Statements since this may result in the recognition of income that may never be realised.

13. Employee benefits:

i. Defined contribution plan:

Contribution paid | payable by the Company during the period to Provident fund, Employees' Deposit Link Insurance Scheme, Officer Super Annotation fund, Employees' State Insurance Corporation, and Labour Welfare fund are recognized in the Statement of Profit and Loss.

ii. Defined benefit plan:

Gratuity:

Gratuity liability is defined benefit obligation and is provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each financial year. The liability so provided is represented by creation of separate funds and is used to meet the liability as and when it accrues for payment in future. Actuarial gains losses are immediately taken to the Statement of Profit and Loss.

Long-term leave encashment:

Long-term leave encashment is provided for based on actuarial valuation on project unit credit method carried by an actuary as at the end of the year. Actuarial gains | losses are immediately taken to the Statement of Profit and Loss.

iii. Short-term employee benefits:

Short-term leave encashment is provided at undiscounted amount during the accounting period based on service rendered by employees.

iv. Voluntary retirements:

Compensation payable under the Voluntary Retirement Scheme is being charged to the Statement of Profit and Loss.

14. Taxation:

i. Income tax expense comprises current tax and deferred tax charge or credit. Provision for current tax is made on the basis of the assessable income at the tax rate applicable to the relevant assessment year.

ii. The Company is declared sick under Section 17(1) of SICA (Special Provisions),1985 and hence the MAT under Section 115JB of the Income Tax Act,1961 is not applicable.

iii. Deferred tax asset and deferred tax liability are calculated by applying tax rate and tax laws that have been enacted or substantively enacted by the Balance Sheet date. Deferred tax assets on account of timing differences are recognized, only to the extent there is a reasonable certainty of its realization. Deferred tax assets are reviewed at each Balance Sheet date to reassure realization.

15. Earnings per share:

The Company reports basic and diluted Earnings per share (EPS) in accordance with Accounting Standard 20 on 'Earnings Per Share'. Basic EPS are computed by dividing the net profit or loss for the period by the weighted average number of Equity shares outstanding during the period. Diluted EPS is computed by dividing the net profit or loss for the period by the weighted average number of Equity shares outstanding during the period adjusted for the effects of all diluted potential Equity shares except where the results are anti-dilutive.

b) Terms | rights attached to Preference shares

The Company has only one class of 0% Redeemable Preference shares having a par value of Rs. 10 per share. These shares are redeemable at par over a period of 7 years, starting Rs. 100 lacs every year from financial year 2013-14 to 2016-17 and Rs. 200 lacs every year from financial year 2017-18 to 2019-20 as per the Modified Sanctioned Scheme (MS - 13) approved by BIfR. Extension of 3 years was granted by the Board of Atul Ltd as per the request of Monitoring Committee formed under the Scheme whereby the repayment will now start from 2016-17.

c) Terms rights attached to Equity shares

The Company has only one class of Equity shares having a par value of Rs. 10 per share. Each holder of Equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian rupees. The dividend proposed by the Board is subject to the approval of the Shareholders in the ensuing Annual General Meeting. In the event of liquidation of the Company, the holders of Equity shares will be entitled to receive the remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of Equity shares held by the shareholders.


Mar 31, 2014

A. Presentation and Preparation of the Financial Statements :

These Financial Statements have been prepared in accordance with the requirements of the information and disclosures mandated by Revised Schedule VI, applicable Accounting Standards, other applicable pronouncements and regulations.

B. Use of Estimates :

The preparation of the Financial Statements in conformity with generally accepted Accounting Principles requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the Financial Statements and the results of operations during the reporting period. Although these estimates are based upon Management''s best knowledge of current events and actions, actual results could differ from these estimates. Differences between actual results and estimates are recognised in the period in which the results are known | materialised.

C. Fixed Assets:

Fixed assets are carried at cost of acquisition including incidental expenses, less accumulated depreciation, amortisation and impairment or amount substituted for cost on revaluation conducted by an independent surveyor in 1985-86.

Capital work-in-progress - Projects under which assets are not ready for their intended use and other capital work-in-progress are carried at cost, comprising direct cost, related incidental expenses and attributable interest.

D. Leased Assets:

Operating lease rentals are amortised with reference to lease terms and other considerations.

E. Depreciation and Amortisation:

1. Cost of leasehold land is amortised over the period of the lease.

2. Other fixed assets :

i) Depreciation on fixed assets is being provided on ''Straight Line Method'' basis in accordance with provisions of Section 205 (2) (b) of the Companies Act, 1956 in the manner and at

the rates specified in Schedule XIV to the said Act. The assets have been shown at the net value after deducting the amortisation, impairment and depreciation funds. The difference between depreciation on revalued amount and that calculated on original cost of assets revalued is transferred from revaluation reserve to the Statement of Profit and Loss.

ii) Depreciation on additions to the assets during the year is being provided on pro-rata basis at their respective rate with reference to the month of acquisition | installation as required by Schedule XIV to the Companies Act, 1956.

iii) Depreciation on assets sold, scrapped or discarded during the year is being provided at their respective rates up to the month in which such assets are sold, scrapped or discarded, as required by Schedule XIV to the Companies Act, 1956.

iv) Depreciation is adjusted in subsequent periods to allocate the assets revised carrying amount after the recognition of an impairment loss on a systematic basis over its remaining useful life.

F. Impairment of Assets:

The carrying amounts of assets are reviewed at each Balance Sheet date if there is any indication of impairment based on internal | external factors. An impairment loss will be recognised wherever the carrying amount of an asset exceeds its recoverable amount.The recoverable amount is greater of the asset''s net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to the present value by using weighted average cost of capital. A previously recognised impairment loss is further provided or reversed depending on changes in circumstances.

G. Borrowing Costs:

Borrowing costs in relation to acquisition and construction of qualifying assets are capitalised as part of cost of such assets up to the date when such assets are ready for intended use. Other borrowing costs are charged as expense in the year in which these are incurred.

H. Investments:

Investments that are intended to be held for more than a year, from the date of acquisition, are classified as long-term investments and are carried at cost. However, provision for diminution in value of investments is made to recognise a decline, other than temporary, in the value of the investments.

I. Inventories:

i) Raw materials, packing materials and fuel are valued at cost or net realisable value whichever is lower. Cost is arrived at on FIFO basis.

ii) Stores and spares other than specific spares for machinery are valued at cost. Cost is arrived at on weighted average basis.

iii) Materials-in-process and finished goods are valued at cost or net realisable value whichever is lower. Finished goods stocks are valued at full absorption cost (Including Excise Duty).

iv) Materials-in-transit and in bonded warehouse are stated at the cost to the date of Balance Sheet.

J. Foreign Currency Transaction:

i) Initial recognition:

Transactions denominated in foreign currencies are recorded at the rate prevailing on the date of the transaction.

ii) Conversion:

At the year end, monetary items denominated in foreign currencies remaining unsettled are converted into rupee equivalents at the year end exchange rates. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction.

iii) Exchange differences:

All exchange differences arising on settlement and conversion of foreign currency transactions are included in the Statement of Profit and loss.

K. Revenue Recognition:

i) Sale of goods and services:

Revenue is recognised when the significant risks and rewards of ownership of goods have passed to the buyer, which generally coincides with delivery. It includes excise duty but excludes value added tax and sales tax. Service income is recognised, net of service tax when the related services are rendered.

ii) Lease rental income is recognised on accrual basis.

iii) Dividend income is accounted for in the year in which the right to receive the same is established.

iv) Interest income is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable.

L. Provisions, Contingent Liabilities and Contingent Assets:

A provision is recognised when an enterprise has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on Management estimate required to settle the obligation at the balance sheet date and adjusted to reflect the current Management estimates.

No provision is recognised for -

i. Any possible obligation that arises from past events and the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company; or

ii. Any present obligation that arises from past events but is not recognised because it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or a reliable estimate of the amount of obligation cannot be made.

iii. Such obligations are recorded as contingent liabilities. These are assessed continually and only that part of the obligation for which an outflow of resources embodying economic benefits is probable, is provided for, except in the extremely rare circumstances where no reliable estimate can be made.

iv. Contingent assets are not recognised in the Financial Statements since this may result in the recognition of income that may never be realised.

M. Research and Development Expenditure:

Research and Development expenditure is charged to revenue under the natural heads of account in the year in which it is incurred. However, Research and Development expenditure on fixed assets is treated in the same way as expenditure on other fixed assets.

N. Employee Benefits:

i) Defined contribution plan:

Contribution paid | payable by the Company during the period to provident fund, employees'' deposit link insurance scheme, officer superannuation fund, employees'' state insurance corporation and labour welfare fund are recognised in the Statement of Profit and Loss.

ii) Defined benefit plan:

Gratuity:

Gratuity liability is defined benefit obligation and is provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each financial year. The liability so provided is represented by creation of separate funds and is used to meet the liability as and when it accrues for payment in future. Actuarial gains | losses are immediately taken to the Statement of Profit and Loss.

Long-term leave encashment:

Long-term leave encashment is provided for based on actuarial valuation on project unit credit method carried by an actuary as at the end of the year. Actuarial gains | losses are immediately taken to the Statement of Profit and Loss .

iii) Short-term employees benefits:

Short-term leave encashment is provided at undiscounted amount during the accounting period based on service rendered by employees.

iv) Voluntary retirements:

Compensation payable under the voluntary retirement scheme is being charged to the Statement of Profit and Loss.

O. Taxation:

i) Income tax expense comprises current tax and deferred tax charge or credit. Provision for current tax is made on the basis of the assessable income at the tax rate applicable to the relevant assessment year.

ii) The company is declared sick under Section 17 (1) of SICA (Special Provisions),1985 and hence the MAT under Section 115JB of the Income Tax Act,1961 is not applicable.

iii) Deferred tax asset and deferred tax liability are calculated by applying tax rate and tax laws that have been enacted or substantively enacted by the Balance Sheet date. Deferred tax assets on account of timing differences are recognised, only to the extent there is a reasonable certainty of its realisation. Deferred tax assets are reviewed at each Balance Sheet date to reassure realisation.

P. Earnings Per Share:

The Company reports basic and diluted earnings per share in accordance with Accounting Standard - 20 on ''Earnings Per Share''. Basic earnings per share are computed by dividing the net profit or loss for the period by the weighted average number of equity share outstanding during the period. Diluted earnings per share is computed by dividing the net profit or loss for the period by the weighted average number of equity shares outstanding during the period adjusted for the effects of all diluted potential equity shares except where the results are anti-dilutive.

b) Terms | rights attached to Preference Shares

The Company has only one class of 0% Redeemable Preference Shares having a par value of Rs.10 per share. These shares are redeemable at par over a period of 7 years, starting Rs. 100 lacs every year from financial year 2013-14 to 2016-17 and Rs. 200 lacs every year from financial year 2017-18 to 2019-20 as per the modified sactioned scheme (MS - 13) approved by BIFR. Extension of 3 years was granted by Board of Aul Ltd as per the request of monitoing committee formed under the scheme whereby the repayment will now start from 2016-17.

c) Terms | rights attached to Equity Shares

The Company has only one class of Equity Shares having a par value of Rs. 10 per share. Each holder of Equity Shares is entitled to one vote per share. The Company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation of the Company, the holders of Equity Shares will be entitled to receive the remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of Equity Shares held by the shareholders.


Mar 31, 2013

A. Presentation & Preparation of Financial Statements:

As notified by Ministry of Corporate Affairs, Revised Schedule VI underthe Companies Act, 1956 is applicable to the Financial Statements for the financial year commencing on or after 1st April, 2011. Accordingly, the financial statements for the year ended MarcJ|t,3Jy2013 are prepared in accordance with the Revised Schedule VI.The amounts and disclosures included in the financial statement of the previous year have been reclassified to conform to currenj year''s presentation.

B. Use of Estimates:

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period. Although these estimates are based upon management''s best knowledge of current events and actions,actual results could differ from these estimates. Differences between actual results and estimates are recognized in the period in which the results are known | materialized.

C. Fixed Assets:

Fixed assets are carried at cost of acquisition including incidental expenses, less accumulated depreciation, amortization and impairment or amount substituted for cost on revaluation conducted by an independent surveyor in 1985-86.

Capital work-in-progress - Projects under which assets are rHit''teady for their intended use and other capital work-in-progress are carried at cost, comprisfhg'' direct cost, related incidental expensesand attributable interest. ''bnoHn,cr- .,,

D. LeasedAssets: :noifD6«r-

Operating lease rentals are amortized with reference to lease terms andother considerations.

E. Depreciation and Amortization:

1. Cost of leasehold land is amortised overthe period of the lease.

2. Other Fixed Assets:

i) Depreciation on Fixed Assets is being provided on "Straight Line Method" basis in accordance with provisions of Section 205(2)(b) of the Companies Act, 1956 in the manner and at the rates specified in Schedule XIV to the said Act.The assets have been shown at the net value after deducting the amortization, impairment and depreciation funds. The difference between depreciation on revalued amount and that calculated on original cost of assets revalued is transferred from revaluation reserveto Statement of Profitand Loss.

ii) Depreciation on additions to the assets during the year is being provided on pro-rata basis at their respective rate with reference to the month of acquisition | installation as required by Schedule XIV to the Companies Act, 1956.

iii) Depreciation on assets sold, scrapped or discarded during the year is being provided at their respective rates up to the month in which such assets are sold, scrapped or discarded, as required by Schedule XIV to the Companies Act, 1956.

iv) Depreciation is adjusted in subsequent periods to allocate the assets revised carrying amount after the recognition of an impairment loss on a systematic basis over its remaining useful life.

F. Impairment of Assets:

The carrying amounts of assets are reviewed at each Balance Sheet date if there is any indication of impairment based on internal | external factors. An impairment loss will be recognised wherever the carrying amount of an asset exceeds its recoverable amount.The recoverable amount is greater of the asset''s net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to the present value by using weighted average cost of capital. A previously recognised impairment loss isfurther provided or reversed depending on changes in circumstances.

G. Borrowing Costs:

Borrowing costs in relation to acquisition and construction of qualifying assets are capitalised as part of cost of such assets''up to the date when such assets are ready for intended use. Other borrowing costs are charged as expense in the year in which these are incurred.

H. Investments:

Investments that are intended to be held for more than a year, from the date of acquisition, are classified as long - term investments and are carried at cost. However, provision for diminution in value of investments is made to recognise a decline, other than temporary, in the value of the investments.

I. Inventories:

i) Raw materials, packing materials and fuel are valued at cost or net realisable value whichever is lower. Cost is arrived at on FIFO basis. ii) Stores and spares other than specific spares for machinery are valued at cost. Cost is arrived at on weighted average basis.

iii) Materials - in - process andJinished goods are valued at cost or net realisable value whichever is lower. Finished goods stocks are valued at full absorption cost (Including Excise Duty).

iv) Materials in transit and in Bonded Warehouse are stated atthe cost to the dateof Balance Sheet. J. Foreign Currency Transaction:

i) Initial recognition ;

Transactions denominated in foreign currencies are recorded atthe rate prevailing on the date of the transaction.

ii) Conversion:

At the year end, monetary items denominated in foreign currencies remaining unsettled are converted into rupee equivalents at the year end exchange rates. Non monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction.

iii) Exchange differences:

All exchange differences arising on settlement and conversion of foreign currency transactions are included in the Statement of Profit and loss.

K. Revenue Recognition:

a) Sale of Goods:

Revenue is recognised when the significant risks and rewards of ownership of goods have passed to the buyer, which generally coincides with delivery. It includes excise duty but excludes value added tax and sales tax.

b) Lease rental income is recognised on accrual basis.

c) Dividend income is accounted for in the year in which the right to receive the same is established.

d) Interest income is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable.

L. Provisions,Contingent Liabilities and Contingent Assets:

A provision is recognised when an enterprise has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on management estimate required to settle the obligation at the balance sheet date and adjusted to reflect the current management estimates.

No provision is recognised for-

i. Any possible obligation that arises from past events and the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company;or

ii. Any present obligation that arises from past events but is not recognised because it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or a reliable estimate of the amount of obligation cannot be made.

iii. Such obligations are recorded as contingent liabilities.These are assessed continually and only that part of the obligation for which an outflow of resources embodying economic benefits is probable, is provided for, except in the extremely rare circumstances where no reliable estimate can be made.

iv. Contingent assets are not recognised in the financial statements since this may result in the recognition of income that may never be realised.

M. Research & Development Expenditure:

Research & Development expenditure is charged to revenue under the natural heads of account in the year in which it is incurred. However, Research & Development expenditure on fixed assets is treated in the same way as expenditure on other fixed assets.

N. Employee Benefits:

i) Defined contribution plan:

Contribution paid | payable by the Company during the period to Provident Fund, Employees'' Deposit Link Insurance Scheme, Officer Super Annuation Fund, Employees'' State Insurance Corporation,and LabourWelfare Fund are recognised in the Statement of Profit and Loss.

ii) Defined benefit plan:

Gratuity:

Gratuity liability is defined benefit obligation and is provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each financial year.The liability so provided is represented by creation of separate funds and is used to meet the liability as and when it accrues for payment in future. Actuarial gains | losses are immediately taken to the Statement of ProfitandLoss.

Long-term leave encashment:

Long - term leave encashment is provided for based on actuarial valuation on project unit credit method carried by an actuary as at the end of the year. Actuarial gains | losses are immediately taken to the Statement of Profit and Loss.

iii) Short -term employees benefits:

Short - term leave encashment is provided at undiscounted amount during the accounting period based on service rendered by employees.

iv) Voluntary retirements:

Compensation payable under the Voluntary Retirement Scheme is being charged to the Statement of Profit and Loss.

O. Taxation:

i) Income tax expense comprises current tax and deferred tax charge or credit. Provision for current tax is made on the basis of the assessable income at the tax rate applicable to the relevant assessmentyear.

ii) The company is declared sick under Section 17(1} of SICA (Special Provisions),! 985 and hence the MAT under Section 115JBofthelncomeTaxAct,1961 is not applicable.

iii) Deferred tax asset and deferred tax liability are calculated by applying tax rate and tax laws that have been enacted or substantively enacted by the Balance Sheet date. Deferred tax assets on account of timing differences are recognised, only to the extent there is a reasonable certainty of its realisation. Deferred tax assets are reviewed at each Balance Sheet date to reassure realisation.

P. Earnings Per Share:

The Company reports basic and diluted Earnings Per Share in accordance with Accounting Standard 20 on ''Earnings Per Share''. Basic earnings per share are computed by dividing the net profit or loss for the period by the weighted average number of equity share outstanding during the period. Diluted earnings per share is computed by dividing the net profit or loss for the period by the weighted average number of equity shares outstanding during the period adjusted for the effects of all diluted potential equity shares except where the results areanti-dilutive.


Mar 31, 2012

A. Presentation & Preparation of Financial Statements:

As notified by Ministry of Corporate Affairs, Revised Schedule VI under the Companies Act, 1956 is applicable to the Financial Statements for the financial year commencing on or after April 1, 2011. Accordingly, the financial statements for the year ended March 31, 2012 are prepared in accordance with the Revised Schedule VI. The amounts and disclosures included in the financial statements of the previous year have been reclassified to conform to the requirements of Revised Schedule VI.

B. Use of Estimates:

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period. Although these estimates are based upon management's best knowledge of current events and actions, actual results could differ from these estimates. Differences between actual results and estimates are recognized in the period in which the results are known | materialized.

C. Fixed Assets:

Fixed assets are carried at cost of acquisition including incidental expenses, less accumulated depreciation, amortization and impairment or amount substituted for cost on revaluation conducted by an independent surveyor in 1985-86.

D. Leased Assets:

Operating lease rentals are amortized with reference to lease terms and other considerations.

E. Depreciation and Amortization:

1. Cost of leasehold land is amortized over the period of the lease.

2. Other Fixed Assets:

i. Depreciation on Fixed Assets is being provided on "Straight Line Method" basis in accordance with provisions of Section 205(2)(b) of the Companies Act, 1956 in the manner and at the rates specified in Schedule XIV to the said Act. The assets have been shown at the net value after deducting the amortization, impairment and depreciation funds. The difference between depreciation on revalued amount and that calculated on original cost of assets revalued is transferred from revaluation reserve to Statement of Profit and Loss.

ii. Depreciation on additions to the assets during the year is being provided on pro-rata basis at their respective rate with reference to the month of acquisition | installation as required by Schedule XIV to the Companies Act, 1956.

iii. Depreciation on assets sold, scrapped or discarded during the year is being provided at their respective rates up to the month in which such assets are sold, scrapped or discarded, as required by Schedule XIV to the Companies Act, 1956.

iv. Depreciation is adjusted in subsequent periods to allocate the assets revised carrying amount after the recognition of an impairment loss on a systematic basis over its remaining useful life.

F. Impairment of Assets:

The carrying amounts of assets are reviewed at each Balance Sheet date if there is any indication of impairment based on internal | external factors. An impairment loss will be recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is greater of the asset's net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to the present value by using weighted average cost of capital. A previously recognized impairment loss is further provided or reversed depending on changes in circumstances.

G. Borrowing Costs:

Borrowing costs in relation to acquisition and construction of qualifying assets are capitalized as part of cost of such assets up to the date when such assets are ready for intended use. Other borrowing costs are charged as expense in the year in which these are incurred.

H. Investments:

Investments that are intended to be held for more than a year, from the date of acquisition, are classified as long-term investments and are carried at cost. However, provision for diminution in value of investments is made to recognize a decline, other than temporary, in the value of the investments.

I. Inventories:

i. Raw materials, packing materials and fuel are valued at cost. Cost is arrived at on FIFO basis.

ii. Stores and spares other than specific spares for machinery are valued at cost. Cost is arrived at on FIFO basis.

iii. Materials-in-process and finished goods are valued at cost or net realizable value whichever is lower. Finished goods stocks are valued at full absorption cost (including excise duty).

iv. Materials in transit and in Bonded Warehouse are stated at the cost to the date of Balance Sheet.

J. Foreign Currency Transaction:

i. Initial Recognition:

Transactions denominated in foreign currencies are recorded at the rate prevailing on the date of the transaction.

ii. Conversion:

At the year-end, monetary items denominated in foreign currencies remaining unsettled are converted into rupee equivalents at the year-end exchange rates. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction.

iii. Exchange Differences:

All exchange differences arising on settlement and conversion of foreign currency transactions are included in the Statement of Profit and Loss.

K. Revenue Recognition:

i. Sale of Goods:

Revenue is recognized when the significant risks and rewards of ownership of goods have passed to the buyer, which generally coincides with delivery. It includes excise duty but excludes value added tax and sales tax.

ii. Lease rental income is recognized on accrual basis.

iii. Dividend Income is accounted for in the year in which the right to receive the same is established.

iv. Interest Income is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

L. Provisions, Contingent Liabilities and Contingent Assets:

A provision is recognized when an enterprise has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on management estimate required to settle the obligation at the Balance Sheet date and adjusted to reflect the current management estimates.

No provision is recognized for -

i. Any possible obligation that arises from past events and the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company; or

ii. Any present obligation that arises from past events but is not recognized because it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or a reliable estimate of the amount of obligation cannot be made.

iii. Such obligations are recorded as contingent liabilities. These are assessed continually and only that part of the obligation for which an outflow of resources embodying economic benefits is probable, is provided for, except in the extremely rare circumstances where no reliable estimate can be made.

iv. Contingent assets are not recognized in the financial statements since this may result in the recognition of income that may never be realized.

M. Research & Development Expenditure:

Research & Development Expenditure is charged to revenue under the natural heads of account in the year in which it is incurred. However, Research & Development expenditure on Fixed Assets is treated in the same way as expenditure on other Fixed Assets.

N. Employee Benefits:

i. Defined Contribution Plan:

Company's contribution paid | payable during the period to Provident Fund, Employees' Deposit Link Insurance Scheme, Officer Super Annotation Fund, Employees' State Insurance Corporation, and Labour Welfare Fund are recognized in the Statement of Profit and Loss.

ii. Defined Benefit Plan:

Gratuity:

Gratuity liability is defined benefit obligation and is provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each financial year. The liability so provided is represented by creation of separate funds and is used to meet the liability as and when it accrues for payment in future. Actuarial gains | losses are immediately taken to Statement of Profit and Loss.

Long-term Leave Encashment:

Long-term leave encashment are provided for based on actuarial valuation on project unit credit method carried by an actuary as at the end of the year. Actuarial gains | losses are immediately taken to Statement of Profit and Loss.

iii. Short-term Employee Benefits:

Short term leave encashment are provided at undiscounted amount during the accounting period based on service rendered by employee.

iv. Voluntary Retirements:

Compensation payable under the Voluntary Retirement Scheme is being charged to Statement of Profit and Loss.

O. Taxation:

i. Income-tax expense comprises current tax and deferred tax charge or credit. Provision for current tax is made on the basis of the assessable income at the tax rate applicable to the relevant assessment year.

ii. The Company is declared sick under Section 17(1) of SICA (Special Provisions),1985 and hence the MAT under Section 115JB of the Income Tax Act,1961 is not applicable.

iii. Deferred tax asset and deferred tax liability are calculated by applying tax rate and tax laws that have been enacted or substantively enacted by the Balance Sheet date. Deferred tax assets on account of timing differences are recognized, only to the extent there is a reasonable certainty of its realization. Deferred tax assets are reviewed at each Balance Sheet date to reassure realization.

P. Earnings Per Share:

The Company reports basic and diluted Earnings Per Share in accordance with Accounting Standard 20 on 'Earnings Per Share'. Basic earnings per share are computed by dividing the net profit or loss for the period by the weighted average number of equity share outstanding during the period. Diluted earnings per share is computed by dividing the net profit or loss for the period by the weighted average number of equity shares outstanding during the period adjusted for the effects of all diluted potential equity shares except where the results are anti-dilutive.


Mar 31, 2010

(i) Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention on accrual basis of accounting in accordance with the generally accepted accounting principles in India and the provisions of The Companies Act, 1956.

(ii) Use of Estimates

The preparation of the financial statements in conformity with the generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting year. Difference between the actual result and estimates are recognised in the year in which the results are known | materialised.

(iii) Fixed Assets

Fixed Assets are stated at historical cost or amount substituted for cost on revaluation conducted by independent surveyor in 1985-86. Cost includes cost of acquisition or construction and incidental expenditure upto commencement of commercial production.

(iv) Leased Assets

Operating lease rentals are amortised with reference to lease terms and other considerations.

(v) Depreciation

(a) Depreciation on Fixed Assets is provided on Straight Line method, in accordance with provision of Section 205 (2B) of The Companies Act, 1956. The assets have been shown at the net value after deducting the amortization, impairment and depreciation funds.

The difference between depreciation on revalued amount and that calculated on original cost of assets revalued is transferred from revaluation reserve to profit and loss account.

(b) Depreciation on assets acquired | purchased during the year has been provided on pro rata basis according to the period each asset was put to use during the year.

(c) Depreciation on assets after recognizing impairment loss:

Depreciation is adjusted in subsequent periods to allocate the assets revised carrying amount after the recognition of an impairment loss on a systematic basis over its remaining useful life.

(d) Cost of leasehold land is amortised over the period of the lease.

(vi) Borrowing Cost

Borrowing costs with respect to acquisition | construction of assets are capitalized as part of cost of such assets up to the date of commercial production of the asset. Other borrowing costs are charged as expense in the year in which these are incurred.

(vii) Investments

Short term investments are carried at the lower of cost and quoted | fair value, computed category wise. Long term investments are stated at cost. Provision for diminution in the value of long term investments is made only if such a decline is other than temporary in the opinion of the management.

(viii) Inventories

Inventories are valued at Cost or Net Realisable Value (NRV) whichever is lower. Cost is determined on First In First Out (FIFO) method. The cost of finished goods and work in progress comprises raw material, direct material, other direct cost and production overheads absorbed on the products, if the cost is lower than the NRV, else NRV has been considered. Excise duty in respect of closing inventory of finished goods is included as part of inventory. Materials in transit have been valued at cost or NRV, whichever is lower.

(ix) Employee Benefit

Contribution and benefit plans:

Contribution made by the Company to the Provident Fund; Employee State Insurance Corporation; Employees Deposit Link Insurance; are the benefits with employees’ contributions and the same has been recognized in the profit and loss account. The benefit plans like Group Personal Accident; Gratuity Fund have also been recognized. Provision for payments to the Employees Gratuity Fund after taking into account the funds available with the Trustees of the Gratuity Fund is based on actuarial valuation done at the close of each financial year. At the reporting date liabilities of the Company towards gratuity is determined by independent actuarial valuation using the projected unit credit method which considers each period of service as giving rise to an additional unit of benefit entitlement and measures each unit separately to build up final obligation. Past services are recognised on a straight line basis over the average period until the amended benefits become vested.

Other defined benefits:

Provision for other defined benefits for long term leave encashment is made based on an independent actuarial valuation on projected unit credit method at the end of each financial year. Actuarial gain and losses are recognised immediately in the statement of Profit and Loss Account as income or expenses. Company recognises the undiscounted amount of short term employee benefits during the accounting period based on service rendered by employees.

(x) Foreign Currency Transactions

Transactions in foreign currency are recorded at the original rates of exchange in force at the time when the transactions were effected. Any income or expense on account of exchange difference on settlement is recognised in the Profit and Loss Account except in cases where they relate to the acquisition of fixed assets in which case they are adjusted to the carrying cost of such assets. Current assets | liabilities are reported using the closing rate and the resultant exchange differences are recognised as income or expenses.

(xi) Revenue Recognition

Revenue is recognized when it is earned and no uncertainty exists as to its ultimate realization or collection. Revenue is recognised on delivery of products and is recorded inclusive of excise duty but are net of trade discounts and sales tax. Revenue in respect of insurance | other claims, interest etc. is recognised only when it is reasonably certain that the ultimate collection will be made. Dividend income is recognized in the year in which the right to receive is established.

(xii) Taxes on Income

Current tax is determined as the amount of tax payable in respect of taxable income for the year based on the provisions of the Income Tax Act, 1961.

MAT credit is recognised as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax within the specified period.

Deferred tax for the year is recognized on timing difference; being the difference between the taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the Balance Sheet date. Deferred tax assets are recognized and carried forward only if there is reasonable | virtual certainity of its realization.

(xiii) Impairment of Assets

An asset is impaired when the carrying amount of the asset exceeds its recoverable amount. An impairment loss is charged to the Profit and Loss Account in the year in which an asset is identified as impaired. An impairment loss recognized in prior accounting periods is reversed if there has been a change in the estimate of the recoverable amount. Depreciation on assets after recognizing impairment loss is adjusted in subsequent periods to allocate the assets revised carrying amount after the recognition of an impairment loss on a systematic basis over its remaining useful life.

(xiv) Cash Flow Statement

The Cash Flow statement is prepared by the indirect method set out in Accounting Standard 3 on Cash Flow statements and presents cash flows by operating, investing and financing activities of the Company.

(xv) Comparatives

Comparative financial information is presented in accordance with the Corresponding Figure’ financial reporting

framework set out in Auditing and Assurance Standard 25 on Comparatives. Accordingly, amounts and other disclosures for the preceding year are included as an integral part of the current year’s financial statements, and are to be read in relation to the amounts and other disclosures relating to the current year. Figures of the previous year are regrouped and reclassified wherever necessary to correspond the figures of the current financial year.

(xvi) Earnings Per Share

The Company reports basic and diluted Earnings Per Share in accordance with Accounting Standard 20 on ‘Earnings Per Share’. Basic earning per share is computed by dividing the net profit or loss for the period by the weighted average number of equity shares outstanding during the period. Diluted Earnings Per Share is computed by dividing the net profit or loss for the period by the weighted average number of equity shares outstanding during the period as adjusted for the effects of all diluted potential equity shares except where the results are anti-dilutive.

(xvii) Research and Development Expenditure :

Research and Development expenditure is charged to revenue under the natural heads of account in the year in which it is incurred. However, Research and Development expenditure on fixed assets is treated in the same way as expenditure on other fixed assets.

(xviii) Provisions, ContingentLiabilities and Contingent Assets

The Company recognises provisions only when it has a present obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and when a reliable estimate of the amount of the obligation can be made.

No provision is recognised for –

a) Any possible obligation that arises from past events and the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company; or

b) Any present obligation that arises from past events but is not recognised because it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or a reliable estimate of the amount of obligation cannot be made.

Such obligations are recorded as contingent liabilities. These are assessed continually and only that part of the obligation for which an outflow of resources embodying economic benefits is probable, is provided for, except in the extremely rare circumstances where no reliable estimate can be made.

Contingent assets are not recognized in the financial statements since this may result in the recognition of income that may never be realized.

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