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Accounting Policies of Arex Industries Ltd. Company

Mar 31, 2015

A) Basis of Presentation of Financial Statement :

The financial statements have been prepared under the historical cost convention, on accrual basis in accordance with Generally Accepted Accounting Principle (GAAP), and comply with the Companies Accounting Standard specified under section 133 of the Companies Act, 2013 ("the Act"), read with Rule 7 of the Companies (Accounts) Rules, 2014.

b) Use of estimates :

The preparation of financial statements requires estimates and assumptions which affect the reporting amount of assets, liabilities, revenues and expenses of the reporting period. The difference between the actual results and estimates are recognized in the period in which the results are known or materialized.

c) Fixed Assets :

Fixed Assets are stated at cost less depreciation. Cost comprises of cost of acquisition and directly attributable cost of bringing the assets to condition for its intended use.

d) Investments :

Long term Investments are stated at cost. Provision for diminution in the value of long term investment is made only if such decline is other than temporary in nature.

e) Inventories :

Inventories are valued as under :

- Raw materials : at weighted average cost or net realisable value whichever is lower.

- Work in Process : at the aggregate of weighted average material cost and direct applicable standard overheads or net realisable value whichever is lower.

- Finished Goods : at the aggregate of weighted average material cost and direct applicable standard overheads or net realisable value whichever is lower.

- Trading Goods : at Weighted average cost or net realisable value whichever is lower.

- Stores,Spares & Packing Materials : at weighted average cost or net realisable value whichever is lower.

f) Depreciation :Tangible Assets :

(i) Depreciation has been provided as per straight line method based on the estimated useful life of the assets as specified under Schedule II of the Companies Act, 2013 except on the assets stated in para(ii). Pro-rata depreciation is charged on additions & deletions during the year. The written down value of Fixed Assets whose lives have expired as at 01st April, 2014 have been adjusted in the Statement of Profit & Loss.

(ii) The Management estimates the useful life for Office Equipment - 10 years, Air Condition - 8 years, Vehicles - 6 years, based on wear and tear and usage of assets. Hence the useful life for these assets is different from the useful life as prescribed under part C of Schedule II of the Companies Act, 2013.

(iii) Depreciation on Windmill is charged on written down method based on the estimated useful life of the assets as specified under Schedule II of the Companies Act, 2013

Intangible Assets :

Software is amortized over a period of 3 years.

Lease hold improvements

Leasehold improvements are written off over the lower of the remaining primary period of lease or the life of the assets.

g) Foreign Currency Transactions :

- Transaction in Foreign Currency are recorded at the Exchange rates prevailing at the time transactions are effected.

- Assets and Liabilities in Foreign Currency as at year end covered by forward contracts are stated at the forward contract rates, while those not covered by forward contracts are restated at the rates of exchange at the year end.

- Exchange difference arising on the settlement of monetary items at the rates different from those at which they were initially recorded during the year or reported in previous financial statements are recognised as income or expense in the year in which they arise.

h) Provisions, Contingent Liabilities and Contingent Assets :

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be outflow of resources. Contingent Liabilities are not recognised but are disclosed in the notes. Contingent Assets are neither recognised nor disclosed in the financial statements.

i) Retirement Benefits :

Gratuity and Leave Encashment Liabilities are accounted for on the basis of acturial valuation made by Life Insurance Corporation of India in respect of eligible Employees of the Company. Company's contribution to Provident Fund are charged to the Statement of Profit & Loss.

j) Revenue Recognition :

The sales are recorded when supply of goods take place in accordance with the terms of sales and on change of title in the goods. The sales are shown net off VAT, CST, rebates and discounts. Dividend Income is recognized when right to receive the same is established. Interest Income is recognized on time proportion basis taking in to account the amount outstanding and rate applicable.

k) Taxes on Income :

Provision for current tax is made considering various allowances and benefits available to the company under Income Tax Act. In accordance with Accounting Standard AS-22 "Accounting for Taxes on Income", Deferred taxes resulting from timing differences between book and tax profits are accounted for at the current rate of tax to the extent the timing differences are expected to be crystallized.

l) Borrowing Costs :

Borrowing cost are recognised as an expense in the period in which they are incurred, except to the extent where borrowing cost that are directly attributable to the qualifying asset till put for its intended use is capitalised as part of the cost of that asset.

m) Impairment of Assets :

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the Statement of Profit and Loss in the year in which as asset is identified as impaired. The impairement loss recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

n) Lease :

The Company's significant leasing arrangements are in respect of operating leases for premises. The leasing arrangements which are not cancellable range between eleven months to three years generally, and are usually renewable by mutual consent at agreed terms. The aggregate lease rent payable are charged as rent in the Statement of Profit & Loss.

o) Government Grants :

Government grants under TUF Scheme are recognised in the financial statement on accrual basis and the same is adjusted against interest expenses for which it is granted in the nature of compensation.

p) Power Generation from Windmills :

Units generated from windmills are adjusted against the captive consumption of power at the factory. The monetary value of the units so adjusted, calculated at the prevailing UGVCL rates net of wheeling charges has been included in power and fuel. The value of unadjusted units as on the Balance Sheet date has been included in Short-term loans and Advances in Current assets.


Mar 31, 2014

I) Basis of Presentation :

The Accounts have been prepared using historical cost convention and on the basis of a going concern, with revenues recognised and expenses and other claims are accounted for on accrual basis except in case of significant uncertaininties. Where changes in presentation are made, comparative figures for the previous year are re-grouped accordingly.

ii) Fixed Assets :

Fixed Assets are stated at cost less depreciation. Cost comprises of cost of acquisition and directly attributable cost of bringing the assets to condition for its intended use.

iii) Investments :

Long term Investments are stated at cost. Provision for diminution in the value of long term investment is made only if such decline is other than temporary in nature.

iv) Inventories :

Inventories are valued as under :

- Raw materials : at weighted average cost or realisable value whichever is lower.

- Work in Process : at the aggregate of material cost and direct applicable standard overheads, or net realisable value whichever is lower.

- Finished Goods : at the aggregate of material cost and direct applicable standard overheads or net realisable value whichever is lower.

- Trading Goods : at Cost or Net realisable value whichever is lower.

- Stores,Spares & Packing Materials : at weighted average cost or realisable value whichever is lower.

v) Depreciation :

Depreciation is provided on a straight line basis, except on Windmill on which depreciation is charged on Written Down Value basis by applying the rates specified in Schedule XIV of the Companies Act, 1956. Depreciation on addition and sale of assets during the year are charged on pro-rata basis.Lease hold improvements are written off over the lower of the remaining primary period of lease or the life of asset.

vi) Foreign Currency Transactions :

- Transaction in Foreign Currency are recorded at the Exchange rates prevailing at the time transactions are effected.

- Assets and Liabilities in Foreign Currency as at year end covered by forward contracts are stated at the forward contract rates, while those not covered by forward contracts are restated at the rates of exchange at the year end.

- Exchange difference arising on the settlement of monetary items at the rates different from those at which they were initially recorded during the year or reported in previous financial statements are recognised as income or expense in the year in which they arise.

vii) Provisions, Contingent Liabilities and Contingent Assets :

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be outflow of resources. Contingent Liabilities are not recognised but are disclosed in the notes. Contingent Assets are neither recognised nor disclosed in the financial statements.

viii) Retirement Benefits :

Gratuity and Leave Encashment Liabilities are accounted for on the basis of acturial valuation made by Life Insurance Corporation of India in respect of eligible Employees of the Company. Company''s contribution to Provident Fund are charged to Profit & Loss Account.

ix) Revenue Recognition :

The sales are recorded when supply of goods take place in accordance with the terms of sales and on change of title in the goods. The sales are shown net off VAT, Excise, rebates and discounts.

x) Taxes on Income :

Provision for current tax is made considering various allowances and benefits available to the company under Income Tax Act. In accordance with Accounting Standard AS-22 "Accounting for Taxes on Income" issued by The Institute of Chartered Accountants of India, Deferred taxes resulting from timing differences between book and tax profits are accounted for at the current rate of tax to the extent the timing differences are expected to be crystallized.

xi) Borrowing Costs :

Borrowing cost are recognised as an expense in the period in which they are incurred, except to the extent where borrowing cost that are directly attributable to the acquisition, construction or production of an asset till put for its intended use is capitalised as part of the cost of that asset.

xii) Impairment of Assets :

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the Profit and Loss in the year in which as asset is identified as impaired. The impairement loss recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

xiii) Lease :

The Company''s significant leasing arrangements are in respect of operating leases for premises. The leasing arrangements which are not cancellable range between eleven months to three years generally, and are usually renewable by mutual consent at agreed terms. The aggregate lease rent payable are charged as rent in Profit & Loss.

xiv) Government Grants :

Government grants under TUF Scheme are recognised in the financial statement on accrual basis and the same is adjusted against interest expenses for which it is granted in the nature of compensation.

xv) Power Generation from Windmills :

Unit generated from windmills are adjusted against the captive consumption of power at the factory. The monetary value of the units so adjusted, calculated at the prevailing UGVCL rates net of wheeling charges has been included in power and fuel. The value of unadjusted units as on the Balance Sheet date has been included in Short-term loans and Advances in Current assets.


Mar 31, 2013

I) Basis of Presentation :

The Accounts have been prepared using historical cost convention and on the basis of a going concern, with revenues recognised and expenses and other claims are accounted for on accrual basis except in case of significant uncertaininties. Where changes in presentation are made, comparative figures for the previous year are re-grouped accordingly.

ii) Fixed Assets:

Fixed Assets are stated at cost less depreciation. Cost comprises of cost of acquisition and directly attributable cost of bringing the assets to condition for its intended use.

iii) Investments:

Long term Investments are stated at cost. Provision for diminution in the value of long term investment is made only if such decline is other than temporary in nature.

iv) Inventories:

Inventories are valued as under:

- Raw materials: at weighted average cost or realisable value whichever is lower.

- Work in Process : at the aggregate of material cost and direct applicable standard overheads, or net realisable value whichever is lower.

- Finished Goods: at the aggregate of material cost and direct applicable standard overheads or net realisable value whichever is lower.

- Trading Goods : at Cost or Net realisable value whichever is lower.

- Stores,Spares & Packing Materials : at weighted average cost or realisable value whichever is lower.

v) Depreciation:

Depreciation is provided on a straight line basis, except on Windmill on which depreciation is charged on Written Down Value basis by applying the rates specified in Schedule XIV of the Companies Act, 1956. Depreciation on addition and sale of assets during the year are charged on pro-rata basis. vi i Foreign Currency Transactions :

- Transaction in Foreign Currency are recorded at the Exchange rates prevailing at the time transactions are effected.

- Assets and Liabilities in Foreign Currency as at year end covered by forward contracts are stated at the forward contract rates, while those not covered by forward contracts are restated at the rates of exchange at the year end.

- Exchange difference arising on the settlement of monetary items at the rates different from those at which they were initially recorded during the year or reported in previous financial statements are recognised as income or expense in the year in which they arise.

vii) Provisions. Contingent Liabilities and Contingent Assets :

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be outflow of resources. Contingent Liabilities are not recognised but are disclosed in the notes. Contingent Assets are neither recognised nor disclosed in the financial statements.

viii) Retirement Benefits:

Gratuity and Leave Encashment Liabilities are accounted for on the basis of acturial valuation made by Life Insurance Corporation of India in respect of eligible Employees of the Company. Company''s contribution to Provident Fund are charged to Profit & Loss Account.

ix) Revenue Recognition:

The sales are recorded when supply of goods take place in accordance with the terms of sales and on change of title in the goods. The sales are shown net off VAT, Excise, rebates and discounts.

x) Taxes on Income :

Provision for current tax is made considering various allowances and benefits available to the company under Income Tax Act. In accordance with Accounting Standard AS-22 "Accounting for Taxes on Income" issued by The Institute of Chartered Accountants of India, Deferred taxes resulting from timing differences between book and tax profits are accounted for at the current rate of tax to the extent the timing differences are expected to be crystallized.

Borrowing Costs:

Borrowing cost are recognised as an expense in the period in which they are incurred, except to the extent where borrowing cost that are directly attributable to the acquisition, construction or production of an asset till put for its intended use is capitalised as part of the cost of that asset.

xii) Impairment of Assets:

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the Profit and Loss in the year in which as asset is identified as impaired. The impairement loss recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

xiii) Lease:

The Company''s significant leasing arrangements are in respect of operating leases for premises. The leasing arrangements which are not cancellable range between eleven months to three years generally, and are usually renewable by mutual consent at agreed terms. The aggregate lease rent payable are charged as rent in Profit & Loss.

xiv) Government Grants:

Government grants under TUF Scheme are recognised in the financial statement on accrual basis and the same is adjusted against interest expenses for which it is granted in the nature of compensation.

xv) Power Generation from Windmills :

Unit generated from windmills are adjusted against the captive consumption of power at the factory. The monetary value of the units so adjusted, calculated at the prevailing UGVCL rates net of wheeling charges has been included in power and fuel. The value of unadjusted units as on the Balance Sheet date has been included in Short-term loans and Advances in Current assets.


Mar 31, 2012

I) Basis of Presentation :

The Accounts have been prepared using historical cost convention and on the basis of a going concern, with revenues recognised and expenses and other claims are accounted for on accrual basis except in case of significant uncertaininties. Where changes in presentation are made, comparative figures for the previous year are re-grouped accordingly.

ii) Fixed Assets:

Fixed Assets are stated at cost less depreciation. Cost comprises of cost of acquisition and directly attributable cost of bringing the assets to condition for its intended use.

iii) Investments:

Long term Investments are stated at cost. Provision for diminution in the value of long term investment is made only if such decline is other than temporary in nature.

iv) Inventories:

Inventories are valued as under :

- Raw materials : at weighted average cost or realisable value whichever is lower.

- Work in Process : at the aggregate of material cost and direct applicable standard overheads, or net realisable value whichever is lower.

- Finished Goods : at the aggregate of material cost and direct applicable standard overheads or net realisable value whichever is lower.

- Trading Goods : at Cost or Net realisable value whichever is lower.

- Stores and Spares and Packing Materials items are valued at Cost.

v) Depreciation:

Depreciation is provided on a straight line basis, except on Windmill on which depreciation is charged on Written Down Value basis by applying the rates specified in Schedule XIV of the Companies Act, 1956. Depreciation on addition and sale of assets during the year are charged on pro-rata basis.

vi) Foreign Currency Transactions :

- Transaction in Foreign Currency are recorded at the Exchange rates prevailing at the time transactions are effected.

- Assets and Liabilities in Foreign Currency as at year end covered by forward contracts are stated at the forward contract rates, while those not covered by forward contracts are restated at the rates of exchange at the year end.

- Exchange difference arising on the settlement of monetary items at the rates different from those at which they were initially recorded during the year or reported in previous financial statements are recognised as income or expense in the year in which they arise.

vii) Provisions. Contingent Liabilities and Contingent Assets :

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be outflow of resources. Contingent Liabilities are not recognised but are disclosed in the notes. Contingent Assets are neither recognised nor disclosed in the financial statements.

viii) Retirement Benefits :

Gratuity and Leave Encashment Liabilities are accounted for on the basis of acturial valuation made by Life Insurance Corporation of India in respect of eligible Employees of the Company. Company's contribution to Provident Fund are charged to Profit & Loss Account.

ix) Revenue Recognition:

The sales are recorded when supply of goods take place in accordance with the terms of sales and on change of title in the goods. The sales are shown net off VAT, Excise, rebates and discounts.

x) Taxes on Income :Provision for current tax is made considering various allowances and benefits available to the company under Income Tax Act. In accordance with Accounting Standard AS-22 "Accounting for Taxes on Income" issued by The Institute of Chartered Accountants of India, Deferred taxes resulting from timing differences between book and tax profits are accounted for at the current rate of tax to the extent the timing differences are expected to be crystallized.

xi) Borrowing Costs :Borrowing cost are recognised as an expense in the period in which they are incurred, except to the extent where borrowing cost that are directly attributable to the acquisition, construction or production of an asset till put for its intended use is capitalised as part of the cost of that asset.

xii) Impairment of Assets : An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the Profit and Loss in the year in which as asset is identified as impaired. The impairment loss recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

xiii) Lease: The Company's significant leasing arrangements are in respect of operating leases for premises. The leasing arrangements which are not cancellable range between eleven months to three years generally, and are usually renewable by mutual consent at agreed terms. The aggregate lease rent payable are charged as rent in Profit & Loss.

xiv) Government Grants: Government grants under TUF Scheme are recognised in the financial statement on accrual basis and the same is adjusted against interest expenses for which it is granted in the nature of compensation.

xv) Power Generation from Windmills: Unit generated from windmills are adjusted against the captive consumption of power at the factory. The monetary value of the units so adjusted, calculated at the prevailing UGVCL rates net of wheeling charges has been included in power and fuel. The value of unadjusted units as on the Balance Sheet date has been included in Short-term loans and Advances in Current assets.


Mar 31, 2011

I) Basis of Presentation .

The Accounts have been prepared using historical cost convention and on the basis of a going concern, wit revenues recognised and expenses and other claims are accounted for on accrual basis except in case of significant uncertainties. Where changes in presentation are made, comparative figures for the previous year are re-grouped accordingly.

ii) Fixed. Assets

Fixed assets are stated at cost less depreciation. Cost comprises of cost of acquisition and directly attributable cost of bringing the assets to condition for its intended use.

iii) Investments

Long term Investments are stated at cost. Provision for diminution in the value of long term investment is made only if such a decline is other than temporary in nature.

iv) Inventories

Inventories are valued as under :

- Raw materials : at weighted average cost or realisable value which ever is lower.

- Work in Process : at the aggregate of material cost and direct applicable standard overheads, or net realisable value which ever is lower.

- Finished Goods: at the aggregate of material cost and direct applicable standard overheads or net realisable value which ever is lower.

- Trading Goods: at Cost or Net realisable value which ever is lower.

- Stores and Spares and Packing Materials items are valued at Cost.

v) Depreciation

Depreciation is provided on a straight line basis, except on Windmill on which depreciation is charged on Written Down Value basis by applying the rates specified in Schedule XIV of the Companies Act, 1956. Depreciation on addition and sale of assets during the year are charged on pro-rata basis.

vi) Foreign Currency Transactions

- Transactions in Foreign Currency are recorded at the Exchange rates prevailing at the time transactions are effected.

- Assets and Liabilities in Foreign Currency as at year end covered by forward contracts are stated at the forward contract rates, while those not covered by forward contracts are restated at the rates of exchange at the year end.

- Exchange difference arising on the settlement of monetary items at the rates different from those at which they were initially recorded during the year or reported in previous financial statements are recognised as income or expense in the year in which they arise.

vii) Provision. Conti gent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be outflow of resources. Contingent Liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the financial statements.

viii) Retirement Benefits

Gratuity and Leave Encashment Liabilities are accounted for on the basis of actuarial valuation made by Life Insurance Corporation of India in respect of eligible Employees of the Company. Company's contribution to Provident Fund are charged to Profit & Loss Account.

ix) Revenue Recognition

The sales are recorded when supply of goods takes place in accordance with the terms of sales and on change of title in the goods. The sales are shown net off VAT, Excise, rebates and sales return.

x) Taxes on Income

Provision for current tax is made considering various allowances and' benefits available to the company under Income tax Act. In accordance with Accounting Standard AS-22 "Accounting for Taxes on Income" issued by The Institute of Chartered Accountants of India, Deferred taxes resulting from timing differences between book and tax profits are accounted for at the current rate of tax to the extent the timing differences are expected to be crystallized.

xi) Borrowing Costs

Borrowing cost are recognized as an expense in the period in which they are incurred, except to the extent where borrowing costs that are directly attributable to the acquisition, construction or production of an asset till put for its intended use is capitalised as part of the cost of that asset.

xii) Impairment of Assets

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment ioss is charged to the Profit and Loss Account in the year in which as asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

xiii) Lease

The Company's significant leasing arrangements are in respect of operating leases for premises (Residence, Office etc). The leasing arrangements which are not cancellable range between eleven months to three years generally, and are usually renewable by mutual consent at agreed terms. The aggregate lease rent payable are charged as rent in Profit & Loss Account.

xiv) Government Grants

Government grants under TUF Scheme are recognised in the financial statement on accrual basis and the same is adjusted against interest expenses for which it is granted in the nature of compensation,

xv) Power Generation from Windmills

Units generated from windmills are adjusted against the captive consumption of power at the factory. The monetary value of the units so adjusted, calculated at the prevailing UGVCL rates net of wheeling charges has been included in power and fuel. The value of unadjusted units as on the Balance Sheet date has been included in Advances recoverable in cash or in kind under the Schedule Loans and Advances.


Mar 31, 2010

I) Basis of Presentation

The Accounts have been prepared using historical cost convention and on the basis of a going concern, with revenues recognised and expenses and other claims are accounted for on accrual basis except in case of significant uncertainities. Where changes in presentation are made, comparative figures for the previous year are re-grouped accordingly.

ii) Fixed Assets

Fixed assets are stated at cost less depreciation. Cost comprises of cost of acquisition and directly attributable cost of bringing the assets to condition for its intended use.

iii) Investments

Long term Investments are stated at cost. Provision for diminution in the value of long term investment is made only if such a decline is other than temporary in nature.

iv) Inventories

Inventories are valued as under:

- Raw materials : at weighted average cost or net realisable value which ever is lower.

- Work in Process : at the aggregate of material cost and direct applicable standard overheads, or net realisable value which ever is lower.

- Finished Goods : at die aggregate of material cost and direct applicable standard overheads or net realisable value which ever is lower.

- Trading Goods : at Cost or Net realisable value which ever is lower.

- Stores and Spares and Packing Materials items are valued at Cost.

v) Depreciation

Depreciation is provided on a straight line basis, except on Windmill on which depreciation is charged on Written Down Value basis by applying the rates specified in Schedule XIV of the Companies Act, 1956. Depreciation on addition and sale of assets during the year are charged on pro-rata basis.

vi) Foreign Currency Transactions

- Transactions in Foreign Currency are recorded at the Exchange rates prevailing at the time the transactions are effected.

- Assets and Liabilities in Foreign Currency as at year end covered by forward contracts are stated at the forward contract rates, while those not covered by forward contracts are restated at the rates of exchange at die year end.

- Exchange difference arising on the settlement of monetary items at the rates different from those at which they were initially recorded during die year or reported in previous financial statements are recognised as income or expense in the year in which they arise.

vii) Provision. Contigent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation asa result of past events and it is probable that there will be outflow of resources. Contingent Liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the financial statements.

viii)Retirement Benefits

Gratuity and Leave Encashment Liabilities are accounted for on the basis of acturial valuation made by Life Insurance Corporation of India in respect of eligible Employees of the Company. Companys contribution to Provident Fund are charged to Profit & Loss Account.

ix) Revenue Recognition

The sales are recorded when supply of goods takes place in accordance with the terms of sales and on change of title in the goods. The sales are shown net off VAT, rebates and sales return.

x) Taxes on Income

Provision for current tax is made considering various allowances and benefits available to the company under Income tax Act. In accordance with Accounting Standard AS-22 "Accounting for Taxes on Income" issued by The Institute of Chartered Accountants of India, Deferred taxes resulting from timing differences between book and tax profits are accounted for at the current rate of tax to the extent the timing differences are expected to be crystallized.

xi) Borrowing Costs

Borrowing cost are recognized as an expense in the period in which they are incurred, except to the extent where borrowing costs that are directly attributable to the acquisition, construction or production of an asset till put for its intended use is capitalised as part of the cost of that asset.

xii) Impairment of Assets

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the Profit and Loss Account in the year in which as asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

xiii)Lease

The Companys significant leasing arrangements are in respect of opearting leases for premises(Residence, Office etc). The leasing arrangements which are not cancellable range between eleven months to three years generally, and are usually renewable by mutual consent at agreed terms. The aggregate lease rent payable are charged as rent in Profit & Loss Account.

xiv)Government Grants

Government grants under TUF Scheme are recongnised in the financial statement on accrual basis and the same is adjusted against interest expenses for which it is granted in the nature of compensation.

xv) Power Generation from Windmills

Units generated from windmills are adjusted against the consumption of power at our factories. The monetary value of the units so adjusted, calculated at the prevailing UGVCL rates net of wheeling charges has been included in power and fuel. The value of unadjusted units as on the Balance Sheet date has been included in Advances recoverable in cash or in kind under the Schedule Loans and Advances.

 
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