Accounting Policies of Coventry Coil-O-Matic (Haryana) Ltd. Company

Mar 31, 2010

A) BASIS FOR PREPARATION OF ACCOUNTS: These accounts have been prepared in accordance with historical cost convention and on accrual basis except as stated.

B) FIXED ASSETS: Fixed assets are stated at cost. The cost of fixed assets comprises of its purchase price and any attributable cost of bringing the asset to its working condition for its intended use.

C) DEPRECIATION:

Depreciation is calculated on straight-line method at the rates and manner specified in the Schedule XIV to the Companies Act, 1956 or estimated useful life of the assets, which ever is lower.

D) INTANGIBLE ASSETS: Pursuant to adoption of Accounting Standard 26 - Intangible Assets, issued by the ICAI, Computer Software that is not an integral part of the related hardware is classified as intan- gible assets and is being amortised over a period of 3 years being the estimated useful life.

E) IMPAIRMENT OF FIXED ASSETS: Consideration is given at each balance sheet date to determine whether there is any indication of impairment of the carrying amount of the companys fixed assets. If any indication exists, an assets recoverable amount is estimated. An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is greater of the net selling price and value in use. In assessing the value in use, the estimated future cash flows are discounted to their present value based on an appropriate discount factor.

F) INVENTORIES: Basis of Valuation Stores & Spare parts Raw Material

At lower of cost* or net realisable value. At lower of cost* or net realisable value. *Cost is determined on FIFO basis.

Finished goods & Work in Progress

At lower ot cost or net reansaDie value (uost comprises Material, Labour and Manufacturing overheads as recommended in the Accounting standard 2 (revised)-Valuation of Inventories issued by Institute of Chartered Accountants of India.)

Scrap

At estimated realisable value.

G) FOREIGN CURRENCYTRANSACTION:

1) Foreign currency transactions are recorded in books at the exchange rate prevailing on the date of transaction.

2) All Assets and Liabilities in foreign currency, outstanding at the close of the year are converted into Indian Currency at the rates of exchange prevailing on the date of the Balance Sheet. Liability for increase/decrease in respect of exchange difference is adjusted in the Profit and Loss Account.

H) RETIREMENT BENEFTTS:

The Companys contributions to Provident Fund are charged to Profit & Loss Account. Provision for Gratuity and Leave encashment are made on the basis of actuarial valuation and charged to Profit & Loss Account.

I) EXCISE DUTY: Excise Duty has been accounted on the basis of, both, payments made in respect of finished goods cleared as also provision made for finished goods lying in stock.

J) PROVISIONS: A provision is recognized when an enterprise has a present obligation as a result of past event; 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 except those disclosed elsewhere in the notes to the financial statements, are not discounted to its present value and are determined based on the best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current estimate.

K) TAXATION:

1) Provision for current tax is made and retained in the accounts on the basis of estimated tax liability as per applicable provisions of Income Tax Act, 1961.

2) Deferred Tax for timing differences between tax profits and book profits is accounted for using the tax rates and laws that have been enacted or substantively enacted as of the Balance Sheet date. Deferred Tax assets are recognized to the extent there is reasonable certainty that the assets can be realised in future. i—l

L) CONTINGENT LIABILITIES: Liabilities which are material and whose future outcome cannot be ascertained with reasonable certainties are treated as Contingent and to the extent not provided for, are disclosed by way of notes on accounts.