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Accounting Policies of Brooks Laboratories Ltd. Company

Mar 31, 2015

A Company Background

Brooks Laboratories Limited was incorporated on 23rd January, 2002. The Company has set up a manufacturing plant at Baddi, Himachal Pradesh. The Company is a pharmaceutical manufacturing company working on contract basis and have a strong presence in the pharmaceutical market.

B Basis of Accounting:

a) The Financial Statements have been prepared in compliance with the Accounting Standards specified under section 133 of the Company Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014.

b) Financial Statements are based on historical cost convention and are prepared on accrual basis.

C Use of Estimates:

The preparation of financial statements in conformity with Generally Accepted Accounting Principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities on the financial statements and the reported amounts of revenues and expenses during the reporting period.

Difference between actual results and estimates are recognized in the periods in which the results are known / materialize.

D Revenue Recognition

i) Revenue is recognized when it is earned and no significant uncertainty exists as to its realization or collection.

ii) Interest is recognized on a time proportion basis taking in to account the amount outstanding and the rate applicable.

iii) Dividend income is recognized when right to receive the same is established.

E Fixed Assets:

Fixed Assets are stated at actual cost less accumulated depreciation. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use.

F Impairment of Fixed Assets

At the end of each year, the Company determines whether a provision should be made for impairment loss on fixed assets by considering the indication that an impairment loss may have occurred in accordance with Accounting Standard 28 on "Impairment of Assets". Where the recoverable amount of any fixed assets is lower than its carrying amount, a provision for impairment loss on fixed assets is made for the difference.

G Depreciation:

Depreciation on Fixed Assets has been provided on 'Straight Line Method' as per the useful life and in the manner prescribed in the Schedule II of the Companies Act, 2013.

H Inventories

Inventories are valued as follows:

i) Finished Goods are valued at lower of cost or net realizable value*.

ii) Raw Material are valued at lower of cost or net realizable value**.

iii) Packing Materials are valued at cost or net realizable value**.

iv) Work in process is valued at lower of cost or net realizable value**.

* Cost is arrived at on retail method.

** Cost is arrived at on weighted average cost method.

I Investments

Investments that is 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 less any provision for other than temporary diminution in value. Investments other than long term investments being current investments are valued at cost or fair market value whichever is lower.

J Employee Benefits

i) Company's contribution to Provident Fund and other Funds for the year is accounted on accrual basis and charged to the Statement of Profit & Loss for the year.

ii) Retirement benefits in the form of Gratuity & Leave Encashment are considered as defend benefit obligations and are provided on the basis of the actuarial valuation, using the projected unit credit method as at the date of the Balance Sheet.

K Provisions and Contingent Liabilities

i) Provisions are recognized in terms of Accounting Standard 29- "Provisions, Contingent Liabilities and Contingent Assets in accordance with the Accounting Standard specified under section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014 when there is a present legal or statutory obligation as a result of past events where it is probable that there will be outflow of resources to settle the obligation and when a reliable estimate of the amount of the obligation can be made.

ii) Contingent Liabilities are recognized only when there is a possible obligation arising from past events due to occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or where reliable estimate of the obligation cannot be made. Obligations are assessed on an ongoing basis and only those having a largely probable outfow of resources are provided for.

iii) Contingent Liabilities are disclosed by way of notes.

L Foreign Currency Transactions

i) The transactions in foreign currencies on revenue accounts are stated at the rate of exchange prevailing on the date of transactions.

ii) The difference on account of fuctuation in the rate of exchange, prevailing on the date of transaction and the date of realization are recognized as Income or Expenses.

iii) Differences on translation of Current Assets and Current Liabilities remaining unsettled at the year-end are recognized as Income or Expenses.

M Government Grants

Subsidy for acquiring certain fixed assets is deducted from their respective cost.

N Accounting for Taxation of Income

Current Taxes

Provision for current income-tax is recognized in accordance with the provisions of Indian Income- tax Act, 1961 and is made annually based on the tax liability after taking credit for tax allowances and exemptions.

Deferred Taxes

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to timing differences that result between the profits offered for income taxes and the profits as per the financial statements. Deferred tax assets and liabilities are measured using the tax rates and the tax laws that have been enacted or substantially enacted at the Balance Sheet date. Deferred tax assets are recognized only to the extent there is reasonable certainty that the assets can be realized in the future. Deferred tax assets are reviewed as at each Balance Sheet date.

Minimum Alternate Tax

Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefts in the form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax. Accordingly, MAT is recognized as an asset in the Balance Sheet when it is probable that future economic beneft associated with it will fow to the Company.

O Miscellaneous Expenditure

Preliminary expenses are amortised in the year in which they are incurred.


Mar 31, 2014

1) Accounting Convention

The Financial Statements are prepared in accordance with applicable Accounting Standards in India. A summary of important Accounting Policies, which have been applied consistently, is set out below. Accounting Policies comprises Accounting Standards specified by Central Government u/s 211 (3C) of the companies Act 1956, other pronouncements of the Institute of Chartered Accountants of India and guidelines issued by SEBI. The Financial Statements have also been prepared in accordance with relevant presentational requirements of Companies Act, 1956.

2) Basis Of Accounting

The Financial Statements are prepared under the historical cost convention and on the basis of going concern, in accordance with the generally accepted accounting principles in India and the provisions of the Companies Act,1956.

3) Use of Estimates

The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of financial statements and the reported amount of revenue and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known/ materialized.

4) Fixed Assets

Fixed Assets are stated at historical cost (including expenses incurred on putting them in use) less accumulated depreciation.

5) Depreciation and Amortization

Depreciation has been provided on straight -line method, on single shift basis at the rates Specified in the schedule XIV of the Companies Act, 1956.

6) Inventories

The inventories are valued in accordance, with the revised Accounting Standard-2 "(AS-2)" Valuation of Inventories" and the revised "Guidance Note on Accounting Treatment for Excise Duty" issued by the Institute of Chartered Accountants of India. According the method of valuation adopted are as under :-

i. Stock of Raw Material and Packing Material :- At cost price.

ii. Stock of Work in Progress :- At material cost plus apportioned manufacturing overheads.

iii. Stock of Finished Goods :- At material cost plus apportioned manufacturing overheads plus excise duty and other costs incurred in bringing the inventories to their present location and condition or Net Realizable value whichever is lower.

iv. Spares and consumable: - At cost.

7) Investments

(a) Long term investments are stated at cost of acquisition, provision for diminution is made only to recognize a decline other than temporary, if any, in the value of investments.

(b) Current investments are carried at lower of cost and fair market value.

(c) Dividends are accounted for as and when received.

8) Employee Benefits

(a) A short term employees benefits are recognized as expenses at the undiscounted amount in the profit and loss account of the year in which the related is rendered.

(b) Post employees and other long term employees

benefits are recognized as an expense in the profit and loss account for the year in which the employees has rendered services. The expenses are recognized at the present value of the amount payable determined using actuarial valuation techniques. Actuarial gains and losses in respect of post employment and other long term benefits are charged to Profit and Loss account.

9) Revenue Recognition

Revenue is recognized only when it can be reliably measured and it is reasonable to expect ultimate collection.

Sales of goods and services are recognized upon passage of the title to the customer, which generally coincides with the delivery. Sale is net of sale returns.

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

10) Foreign Currency Transactions

(a) Foreign exchange transactions in respect of import payments are stated at the exchange rate prevailing at the time of transaction and variation, if any, accounted for on the date of payment is squared during the same accounting year.

(b) Monetary items denominated in foreign currencies remaining unsettled at the year end if not covered by forward exchange contracts are translated at year end rates.

(c) Any income or expense on account of exchange difference either on settlement or on translation is recognized in the Statement of Profit and Loss except in case of where they relate to acquisition of fixed assets in which case they are adjusted in the carrying cost of such assets.

11) Provision for Current and Deferred Tax

a) Provision for current tax is made after taking in to consideration benefits admissible under the provisions of the Income Tax Act, 1961. Deferred tax resulting from "timing difference" between taxable and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date. Deferred tax asset is recognized and carried forward only to the extent that is a virtual certainty that assets will be realized in future.

b) MAT: Minimum Alternative Tax payable under the provisions of the Income Tax Act, 1961 is recognized as an asset in the year in which credit becomes eligible and is set off in the year in which the Company becomes liable to pay income taxes at the enacted tax rates and shall be reversed in the year in which it lapses.

12) Amortization of Miscellaneous Expenditure

Preliminary expenses are amortized over a period of five years. All these expenses will be written off over the period of next five years starting from the year of production of that unit.

13) Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in management are recognized when there is present obligation as a result of past events and it is probable that there will be an 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.

14) 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 & Loss Account in the year in which as asset is identified as impaired. The impairment loss recognized in prior accounting periods is reversed if there has been a change in the estimate of recoverable amount.


Mar 31, 2013

1) Accounting Convention

The Financial Statements are prepared in accordance with applicable Accounting Standards in India. A summary of important Accounting Policies, which have been applied consistently, is set out below. Accounting Policies comprises Accounting Standards specified by Central Government u/s 211(3C) of the companies Act 1956, other pronouncements of the Institute of Chartered Accountants of India and guidelines issued by SEBI. The Financial Statements have also been prepared in accordance with relevant presentational requirements of Companies Act 1956.

2) Basis Of Accounting

The Financial Statement are prepared under the historical cost convention and on the basis of going concern, in accordance with the generally accepted accounting principles in India and the provisions of the Companies Act,1956.

3) Use of Estimates

The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of financial statements and the reported amount of revenue and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known/ materialized.

4) Fixed Assets

Fixed Assets are stated at historical cost (including expenses incurred on putting them in use) less accumulated depreciation.

5) Depreciation and Amortization

Depreciation has been provided on straight -line method, on single shift basis at the rates Specified in the schedule XIV of the Companies Act, 1956.

6) Inventories

The inventories are valued in accordance, with the revised Accounting Standard-2 "Valuation of Inventories" and the revised "Guidance Note on Accounting Treatment for Excise Duty" issued by the Institute of Chartered Accountants of India. According the method of valuation adopted are as under :- i. Stock Raw Material and Packing Material :- At cost price.

ii. Stock of Work in Progress :- At material cost plus apportioned manufacturing overheads.

iii. Stock of Finished Goods :- At material cost plus apportioned manufacturing overheads plus excise duty and other costs incurred in brining the inventories to their present location and condition or Net Realizable value whichever is lower.

iv. Spares and consumable: - At cost

7) Investments

(a) Long term investments are stated at cost of acquisition, provision for diminution is made only to recognize a decline other than temporary, if any, in the value of investments.

(b) Current investments are carried at lower of cost and fair market value.

(c) Dividends are accounted for as and when received.

8) Employee Benefits

(a) A short term employees benefits are recognized as an expenses at the undiscounted amount in the profit and loss accounts of the year in which the related is rendered.

(b) Post employees and other long term employees benefits are recognized as an expense in the profit and loss account for the year in which the employees has rendered services. The expenses are recognized at the present value of the amount payable determined using actuarial valuation techniques. Actuarial gains and losses in respect of post employment and other long term benefits are charged to Profit and Loss account.

9) Revenue Recognition

Revenue is recognized only when it can be reliably measured and it is reasonable to expect ultimate collection. Sales of goods and services are recognized upon passage of the title to the customer, which generally coincides with the delivery. Sale is net of sale returns. Interest income is recognized on time proportion basis taking into account outstanding and rate applicable.

10) Foreign Currency Transactions

(a) Foreign exchange transactions in respect of import payments are stated at the exchange rate prevailing at the time of transaction and variation, if any, accounted for on the date of payment is squared during the same accounting year.

(b) Monetary items denominated in foreign currencies remaining unsettled at the year end if not covered by forward exchange contracts are translated at year end rates.

(c) Any income or expense on account of exchange difference either on settlement or on translation is recognized in the Statement of Profit and Loss except in case of where they relate to acquisition of fixed assets in which case they are adjusted in the carrying cost of such assets.

11) Provision for Current and Deferred Tax

(a) Provision for current tax is made after taking in to consideration benefits admissible under the provisions of the Income Tax Act, 1961. Deferred tax resulting from "timing difference" between taxable and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date. Deferred tax asset is recognized and carried forward only to the extent that is a virtual certainty that assets will be realized in future.

(b) MAT: Minimum Alternative Tax payable under the

provisions of the Income ax Act, 1961 is recognized as an asset in the year in which credit becomes eligible and is set off in the year in which the Company becomes liable to pay income taxes at the enacted tax rates and shall be reversed in the year in which it lapses.

12) Amortizations of Miscellaneous Expenditure

Preliminary expenses are amortized over a period of five years. Listing expenses and initial public offer expenses are also incurred during the year. All these expenses will be written off over the period of next five years starting from the year of production of that unit.

13) Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in management are recognized when there is present obligation as a result of past events and it is probable that there will be an 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.

14) Impairment of Assets

During the year, the company has undertaken a review of all Fixed Assets in line with the requirements of AS- 28 on "Impairment of Assets" issued by the Institute of Chartered Accountants of India. Based on such review, no provision is required to be recognized for the year.

15) The Revised Schedule VI has become effective from 1 April, 2011 for the preparation financial statements. This has significantly impacted the disclosure and presentation made in the financial statements.


Mar 31, 2012

1. Accounting Convention

The Financial Statements are prepared in accordance with applicable Accounting Standards in India. A summary of important Accounting Policies, which have been applied consistently, is set out below. Accounting// Policies comprises Accounting Standards specified by Central Government u/s 211(3C) of the companies Act 1956, other pronouncements of the Institute of Chartered Accountants of India and guidelines issued by SEBi. The Financial Statements have also been prepared in accordance with relevant presentational requirements of Companies Act 1956.

2. Basis of Accounting

The Financial Statement are prepared under the historical cost convention and on the basis of going concern, in accordance with the generally accepted accounting principles in India and the provisions of the Companies Act,1956.

3. Use of Estimates

The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of financial statements and the reported amount of revenue and expenses during the reporting period. 'Difference between the actual results and estimates are recognized in the period in which the results are known/ materialized.

4. Fixed Assets

Fixed Assets are stated at historical cost (including expenses incurred on putting them in use) less accumulated depreciation.

5. Depreciation and Amortization

Depreciation has been provided on straight -line method, on single shift basis at the rates Specified in the schedule XIV of the Companies Act, 1956.

6. Inventories

The inventories are valued in accordance, with the revised Accounting Standard-2 " (AS-2)" Valuation of Inventories" and the revised " Guidance Note on Accounting Treatment for Excise Duty" issued by the Institute of Chartered Accountants of India. According the method of valuation adopted are as under

i. Stock Raw Material and Packing Material At cost price.

ii. Stock of Work in Progress At material cost plus apportioned manufacturing overheads.

iii. Stock of Finished Goods At materia! cost plus apportioned manufacturing overheads plus excise duty and other costs incurred in brining the inventories to their present location and condition or Net Realizable value whichever is lower.

iv. Spares and consumable: - At cost.

7. Investments

(a) Long term investments are stated at cost of acquisition, provision for diminution is made only to recognize a decline other than temporary, if any, in the value of investments.

(b) Current investments are carried at lower of cost and fair market value.

(c) Dividends are accounted for as and when received.

8. Employee Benefits

(a) A short term employees benefits are recognized as an expenses at the undiscounted amount in the profit and loss accounts of the year in which the related is rendered.

(b) Post employees and other long term employees benefits are recognized as an expense in the profit and loss account for the year in which the employees has rendered services. The expenses are recognized at the present value of the amount payable determined using actuarial valuation techniques. Actuarial gains and losses in respect of post employment and other long term benefits are charged to Profit and Loss account.

9. Revenue Recognition

Revenue is recognized only when it can be reliably measured and it is reasonable to expect ultimate collection. Sales of goods and services are recognized upon passage of the title to the customer, which generally coincides with the delivery. Sale is net of sale returns. Interest income is recognized on time proportion basis taking into account outstanding and rate applicable.

10. Foreign Currency Transactions

(a) Foreign exchange transactions in respect of import payments are stated at the exchange rate prevailing at the time of transaction and variation, if any, accounted for on the date of payment is squared during the same accounting year.

(b) Monetary items denominated in foreign currencies remaining' unsettled at the year end if not covered by forward exchange contracts are translated at year end rates.

(c) Any income or expense on account of exchange difference either on settlement or on translation is recognized in the Statement of Profit and Loss except in case of where they relate to acquisition of fixed assets in which case they are adjusted in the carrying cost of such assets.

11. Provision for Current and Deferred Tax

(a) Provision for current tax is made after taking in to consideration benefits admissible under the provisions of the Income Tax Act, 1961. Deferred tax resulting from "timing difference" between taxable and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date. Deferred tax asset is recognized and carried forward only to the extent that is a virtual certainty that assets will be realized in future.

(b) MAT: Minimum Alternative Tax payable under the provisions of the Income Tax Act, 1961 is recognized as an asset in the year in which credit becomes eligible and is set off in the year in which the Company becomes liable to pay income taxes at the enacted tax rates and shall be reversed in the year in which it lapses.

12. Amortizations of Miscellaneous Expenditure

Preliminary expenses are amortized over a period of five years. Listing expenses and initial public offer expenses are also incurred during the year. AH these expenses will be written off over the period of next five years starting from the year of production of that unit.

13. Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in management are recognized when there is present obligation as a result of past events and it is probable that there will be an 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.

14. Impairment of Assets

An assets is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the profit & loss account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting periods is reversed if there has been a change in the estimate of recoverable amount.


Mar 31, 2011

1. ACCOUNTING CONVENTION

The Financial Statements are prepared in accordance with applicable Accounting Standard; in India, A summary of important Accounting Policies, which have been applies consistently, k set out below, Accounting Policies comprises Accounting Standards specifies by Central Government h/s 211{3C) of the companies Act 1956, other pronouncements to me Institute of Quartered Accountants of India and guidelines issued by SEBI The Financial Statements have also been prepared in accordance with relevant presentational requirements pf Companies Act 1956. The Financial Statements are rounded to the nearest Rupees.

2. BASIS OF ACCOUNTING

The accounts are prepared under the historical cost convention and on the basis of going concern. AH expenses and incomes to the extent ascertainable are accounted for on mercantile basis unless otherwise stated.

3. USE OF ESTIMATES.

The presentation of financial statements requires estimates and assumptions to be made mat affect the reported amount of assets sad liabilities on the date of financial statements and the reported amount of revenue and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known/materialized.

4. FIXED ASSETS

Fixed Assets are stated at historical cost (including expenses incurred on putting them in use less depreciation.

5. DEPRECIATION

Depreciation has been provided on straight -line method* on single shift basis at the rates specified in the schedule XIV of the Companies Act, 1956.

6. INVENTORIES

The inventories are valued in accordance, with toe revised Accounting Standard-2 " (AS-2)'* Valuation of Inventories" and the revised " Guidance Note on Accounting Treatment for Excise Duty" issued by the Institute of Chartered Accountants of India. According the method of valuation adopted are as under :-

i. Stock Raw Material and Packing Material :- At cost price.

ii. Stock of Work in Progress :- At material cost plus apportioned manufacturing overheads.

iii. Stock of Finished Goods :- At material cost price apportioned manufacturing overheads plus excise duty and other costs incurred in brining the inventories to their present location and condition or Net Realizable value whichever is lower.

iv. Spares and consumable:-At cost.

7. INVESTMENTS

(a) Long term investments are stated at cost of acquisition, provision for diminution is made only to recognize a decline other than temporary, if any, in the value of investments.

(b) Current investments are carried at lower of cost and fair market value.

(c) Dividends are accounted for as and when received*

8. RETIREMENT BENEFITS

(a) A short term employees benefits are recognized as an expenses at the undiscounted amount in the profit and loss accounts of the year in which die related is rendered,

(b) Post employees and other long term employees benefits are recognized as an expense in the profit and loss account for the year in which the employees has rendered services. The expenses is recognized at the present value of the amount payable determined using actuation techniques. Actuarial gains and losses in respect of post employment and other long term benefits are charged to profit and loss account.

9. PROPOSED DIVIDEND

Dividends (including income .tax thereon) as proposed by Board of Directors are provided in the books of account, pending approval at the Annual General Meeting.

10. REVENUE RECOGNITION

Sales of goods and services are recognized upon passage of die title to the customer, , which generally coincides with the delivery. Sale is net of sale returns

11. BORROWING COSTS

Borrowing costs that are attributable to the acquisition or construction of fixed assets are capitalized as part of costs of such assets till such time as the assets is ready for its intended use. All other borrowing costs are recognized as an expense in me period in which incurred.

12, TRANSLATION OF FOREIGN EXCHANGE TRANSACTIONS

(a) Foreign exchange transactions in respect of import payments are stated at the exchange rate prevailing at the time of transaction and variation, if any, accounted for on the date of payment is squared during the same accounting year-

(b) Monetary items denominated in foreign currencies remaining unsettled at the year end- if not covered by forward exchange contracts are translated at year end rates,

(c) Any income / expense arising from foreign currency transactions is dealt in the profit and loss account for the year except m cases where they relate to acquisition of fixed assets in which case they are adjusted in the carrying cost of such assets.

13.INCOME TAX

(a) Current Tax; Provision is made for "income tax based on the liability as computed after taking credit for allowance and exemptions. Adjustments in books are made only after the completion of the assessment.

(b) Deferred Tax : Consequent to the Accounting Standard 22 Recounting for taxes on income*' the differences that result between the profit offered for income tax and the profit* as per the financial statement are identified and thereafter a deferred tax liability is recorded for timing differences, namely the differences that originate is one accounting period and reverse in another.

The tax effect is calculated on the accumulated timing difference at the end of mi Accounting period based on prevailing enacted regulations. deferred tax assets are recognized only if there is reasonable. certainty that they will be realized and are reviewed for the appropriateness of their respective carrying value at each balance sheet date.

(c) MAT: Minimum Alternative Tax payable under the provisions of the income tax Act, 1961 is recognized as an asset in the year in which credit becomes eligible and is set off in the year in which the Company becomes liable to pay income taxes at the enacted tax rates and shall be reversed in the year in which it lapses.

14. AMORTISATION OF INTANGIBLE ASSETS AND MISCELLANCE EXPENDITURE

Preliminary expenses are amortized over a period of five years. Listing expenses. and Initial public offer" expenses are also incurred during the year. All these expenses will be written off over the period of next five years starting from die year of public issue.

15. PROVISIONS, CONTINGENT UABILIES AND CONTIGENT ASSETS

Provisions involving substantial degree of estimation in management are recognized when there is present obligation as a result of past events and it is probable that there will be an 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.

16. IMPAIREMENT OF ASSETS

An assets is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the profit & loss account hi the year in which an assets is identified as impaired. The impairment loss recognized in prior accounting periods is reversed if there has been a change in the estimate of recoverable amount:* Accounting policies not specially referred to are consistent with generally accepted accounting principals,

17. FORWARD EXCHANGE CONTRACT

A company may enter into a forward exchange contract or another financial Instrument that is in substance a forward exchange contract, Which are not intended for trading or speculation purposes, to establish the amount of the reporting currency required or available at the settlement date of the traction. As per AS-11 (R) any premiums or discount at the inception of such a forward exchange contract are amortized over the life of the contract and exchange difference on such contracts are recognized in the statement of profit or loss in the reporting period.

18. In accordance with the guidance notes of the ICAI, the company has recognized minimum alternative tax of Rs.1,31,33,587 relating to the current year,

 
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