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Accounting Policies of Deccan Cements Ltd. Company

Mar 31, 2015

A) Basis of Preparation

The financial statements are prepared under the historical cost convention on accrual basis in accordance with the Generally Accepted Accounting Principles (GAAP) that are followed in India. GAAP comprises the mandatory accounting standards as prescribed by Companies (Accounting Standards) Rules 2006 [which continue to apply under Companies Act, 2013("the Act")] and other applicable provisions of the Act. All incomes and expenditures, having a material bearing on the financial statements, are recognized on an accrual basis.

b) Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires the management to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and disclosure of contingent liabilities at the end of 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.

c) Fixed Assets Tangible Fixed Assets

Tangible Fixed Assets are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. The cost comprises of purchase price, borrowing costs if capitalisation criteria are met and directly attributable cost of bringing the asset to working condition for its intended use.

Subsequent expenditure related to an item of fixed asset is added to its book value only if it increases the future benefits from the existing asset beyond its previously assessed standard of performance. All other expenses on existing fixed assets including day to day repairs and maintenance expenditure and cost of replacing parts are charged to the Statement of Profit and Loss for the period during which such expenses are incurred.

Capital Work-in-progress: Tangible fixed assets which are not yet ready for their intended use are stated at amount expended up to the date of the Balance Sheet date.

Depreciation on Tangible Fixed Assets

Depreciation on Tangible Fixed Assets is provided on straight line method as per the useful life prescribed in Schedule II to the Companies Act, 2013.

Intangible Assets

Intangible assets acquired separately are measured on initial recognition cost and are amortized on straight line method based on the estimated useful economic life.

The amortized period and amortization method are reviewed at each financial year end.

Cost of compensatory land (intangibles) transferred to Government in lieu of forest land diverted for mining and free hold land for mining is amortized over the tenure of the Mining lease.

Impairment of Assets

All the fixed assets are assessed for any indication of impairment at the end of each financial year. On such indication, the impairment loss, being the excess carrying value over the recoverable value of the assets, is charged to the Statement of Profit & Loss in the respective financial year. The impairment loss recognized in the prior years is reversed in cases where the recoverable value exceeds the carrying value, upon the reassessment in the subsequent years.

d) Revenue Recognition

i) Cement: Sales are recognized at the point of dispatch i.e., when significant risk is transferred to customers.

ii) Power: Revenue from sale of power is recognized net of Wheeling and banking charges, line losses and the selling costs.

e) Inventory Valuation

i) Raw Materials, Coal, Stores & Spares, and Packing Materials: At Weighted Average Cost

ii) Materials in Transit: At Cost

iii) Work in process: At Weighted Average Cost or Net Realizable Value, whichever is lower.

iv) Finished goods: At Cost or Net Realizable Value, whichever is lower.

Cost comprises of cost of purchase, cost of conversion, & other costs incurred in bringing the inventories to its present location & condition.

f) Investments

Investments are classified as non-current and current investments. Long Term Investments are carried at cost of acquisition less provision for diminution, other than temporary, in value of such investments. Current investments are carried at lower of cost and fair value.

g) Internal Consumption

Internal consumption of the Company's products, which are otherwise marketable, is accounted for at transfer price and is included under sales.

h) Transfer price for Inter divisional transfer / consumption

i) Cement: Internal consumption is taken at cost plus statutory levies as applicable.

ii) Power (Hydel / Wind): At cost of purchase by the division consuming such power from external vendors.

i) Employee Benefits

Employee benefits include provident fund, superannuation fund, employee state insurance scheme, gratuity fund and compensated absences.

Defined Contribution Plan

The Company's contribution to provident fund, superannuation fund and employee state insurance scheme are considered as defined contribution plans and are charged as an expense based on the amount of contribution required to be made and when services are rendered by the employees.

Defined Benefit Plan

Gratuity

In accordance with the Payment of Gratuity Act, 1972 the Company provides for gratuity covering eligible employees.

Liability on account of gratuity is determined using the projected unit credit method, with actuarial valuations being carried out at each balance sheet date. Actuarial gains and losses are recognized in the Statement of Profit and Loss, in the period in which they occur.

The gratuity liability is covered through a recognized Gratuity Fund managed by Life Insurance Corporation of India and the contributions made under the scheme are charged to Statement of Profit and Loss.

Compensated Absences

The employees are entitled to accumulate leave subject to certain limits, for future use / encashment, as per the policy of the Company.

The liability towards such unutilized leave as at the end of each balance sheet date is determined based on independent actuarial valuation and recognized in the Statement of Profit and Loss.

j) Borrowing Costs

'Borrowing costs include interest, amortization of ancillary costs incurred and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the

interest cost. Costs in connection with the borrowing of funds to the extent not directly related to the acquisition of qualifying assets are charged to the Statement of Profit and Loss over the tenure of the loan. Borrowing costs, allocated to and utilized for qualifying assets, pertaining to the period from commencement of activities relating to construction / development of the qualifying asset upto the date of capitalization of such asset are included in the cost of the assets. Capitalization of borrowing costs is suspended and charged to the Statement of Profit and Loss during extended periods when active development activity on the qualifying assets is interrupted.

k) Taxation

Provision for income tax is made for both current and deferred taxes. Provision for current income tax is made at current tax rates based on assessable income. Deferred income taxes are recognized for the future tax consequences attributable to timing differences between the carrying amounts of existing assets and liabilities and their respective tax bases. The effect on deferred tax assets and liabilities of a change in tax rates as stated in the financial statements is recognized using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date. Deferred tax assets resulting from unabsorbed business loss / depreciation allowance are recognized and carried forward only when there is virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. All other deferred tax assets are recognized and carried forward only when there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized

l) Contingencies

The Company recognizes provisions when there is present obligation as a result of past event and it is probable that there will be an outflow of resources and reliable estimate can be made of the amount of obligation. A disclosure for contingent liabilities is made in the notes to accounts when there is a possible obligation or a present obligation that may, but probably will not; require an out flow of resources. Contingent assets are neither recognized nor disclosed in the financial statements.

m) Earnings Per Share

Basic earnings per equity share is computed by dividing the net profit for the year attributable to the Equity Shareholders by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the net profit for the year, adjusted for the effects of dilutive potential equity shares, attributable to the Equity Shareholders by the weighted average number of the equity shares and dilutive potential equity shares outstanding during the year except where the results are anti-dilutive.


Mar 31, 2013

A) Basis of Preparation

(i) Financial Statements are prepared in accordance with Generally Accepted Accounting Principles in India (GAAP) under the historical cost convention.

(ii) The Company follows the mercantile system of accounting and recognizes income and expenditure on accrual basis.

b) Use of Estimates

The preparation of financial statements is in conformity with generally accepted accounting principles which requires management to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and disclosure of contingent liabilities at the end of the reporting periods. Although these estimates are based upon management''s best knowledge of current events and actions, actual results could differ from these estimates.

c) Fixed Assets Tangible Fixed Assets

Tangible Fixed Assets are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. The cost comprises purchase price, borrowing costs if capitalisation criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use.

Subsequent expenditure related to an item of fixed asset is added to its book value only if it increases the future benefits from the existing asset beyond its previously assessed standard of performance. All other expenses on existing fixed assets including day to day repairs and maintenance expenditure and cost of replacing parts are charged to the statement of Profit and Loss for the period during which such expenses are incurred.

Depreciation on Tangible Fixed assets

Depreciation on Fixed Assets is provided in accordance with Schedule XIV of the Companies Act, 1956, on Straight Line Method in respect of Buildings, Plant and Machinery, and on Written Down Value Method in respect of other Fixed Assets.

Intangible Assets

Intangible assets acquired separately are measured on initial recognition cost and are amortised on a straight line basis over estimated useful economic life.

The amortised period and amortisation method are reviewed at each financial year end.

Cost of compensatory land (intangibles) transferred to Government of Andhra Pradesh in lieu of forest land diverted for mining and free hold land for mining is amortized over the tenure of the Mining lease. Capital Work-in-progress is stated at amount expended up to the date of the Balance Sheet.

All the fixed assets are assessed for any indication of impairment at the end of each financial year. On such indication the impairment loss, being the excess carrying value over the recoverable value of the assets, is charged to the statement of Profit & Loss in the respective financial year. The impairment loss recognized in the prior years is reversed in cases where the recoverable value exceeds the carrying value, upon the reassessment in the subsequent years.

d) Revenue Recognition

(i) Cement: Sales are recognized at the point of dispatch i.e., when significant risk is transferred to customers.

(ii) Power: Revenue from sale of power is recognized net of Wheeling charges.

e) Inventory Valuation

(i) Raw Materials, Coal, Stores & Spares and Packing Materials: at Weighted Average Cost

(ii) Materials in Transit: at Cost

(iii) Work in process: at Weighted Average Cost or Net Realisable Value, whichever is lower.

(iv) Finished goods: at Cost or Net Realisable Value, whichever is lower.

Cost comprises of cost of purchase, cost of conversion & other costs incurred in bringing the inventories to its present location & condition.

f) Investments

Investments are stated at cost of acquisition. Diminution in the value of investments, other than temporary, meant to be held for a long period of time is recognized.

g) Internal Consumption

Internal consumption of the Company''s products, which are otherwise marketable, is accounted for at transfer price and is included under sales.

h) Transfer price for Inter divisional transfer / consumption

(i) Cement: Internal consumption is taken at cost plus statutory levies as applicable.

(ii) Power (Hydel / Wind): At cost of purchase from APCPDCL by the division consuming such power.

i) Retirement Benefits

Provident Fund is administered through Regional Provident Fund Commissioner. Superannuation and Gratuity are administered through the scheme of Life Insurance Corporation of India. The liability towards Leave Encashment and Gratuity is recognized on the basis of actuarial valuation.

j) Borrowing Costs

Borrowing costs are recognized as an expense in the period in which they are incurred. Borrowing costs incurred for acquiring and construction of assets are capitalised as part of the cost of such assets.

k) Taxation

Provision for income tax is made for both current and deferred taxes. Provision for current income tax is made at current tax rates based on assessable income. Deferred income taxes are recognized for the future tax consequences attributable to timing differences between the carrying amounts of existing assets and liabilities and their respective tax bases. The effect on deferred tax assets and liabilities of a change in tax rates as stated in the financial statements is recognized 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 when there is virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

l) Contingencies

The Company recognizes provisions when there is present obligation as a result of past event and it is probable that there will be an outflow of resources and reliable estimate can be made of the amount of obligation. A disclosure for contingent liabilities is made in the notes to accounts when there is a possible obligation or a present obligation that may, but probably will not, require an out flow of resources. Contingent assets are neither recognized nor disclosed in the financial statements.

m) Earnings Per Share

Earnings per share is calculated by dividing the net profit or loss for the year attributable to equity share holders by the weighted average number of equity shares outstanding during the year.


Mar 31, 2012

A) Basis of Preparation

(i) Financial Statements are prepared in accordance with Generally Accepted Accounting Principles in India (GAAP) under the historical cost convention.

(ii) The Company follows the mercantile system of accounting and recognizes income and expenditure on accrual basis.

b) Use of Estimates

The preparation of financial statements is in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and disclosure of contingent liabilities at the end of the reporting periods. Although these estimates are based upon management's best knowledge of current events and actions, actual results could differ from these estimates.

c) Fixed Assets:

Tangible Fixed Assets:

Tangible Fixed Assets are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. The cost comprises purchase price, borrowing costs if capitalisation criteria are met and directly attributable cost of bringing of the asset to its working condition for the intended use.

Subsequent expenditure related to an item of fixed asset is added to its book value only if it increases the future benefits from the existing asset beyond its previously assessed standard of performance. All other expenses on existing fixed assets including day to day repairs and maintenance expenditure and cost of replacing parts are charged to the statement of Profit and Loss for the period during which such expenses are incurred.

Depreciation on Tangible Fixed assets:

Depreciation on Fixed Assets is provided in accordance with Schedule XIV of the Companies Act, 1956, on Straight Line Method in respect of Buildings, Plant and Machinery, and on Written Down Value Method in respect of other Fixed Assets.

Intangible Assets:

Intangible assets acquired separately are measured on initial recognition cost and are amortized on a straight line basis over estimated useful economic life.

The amortized period and amortization method are reviewed at each financial year end.

Cost of compensatory land (intangibles) transferred to Government of Andhra Pradesh in lieu of forest land diverted for mining and free hold land for mining is amortized over the tenure of the Mining lease.

Capital Work-in-progress is stated at amount expended up to the date of the Balance Sheet.

All the fixed assets are assessed for any indication of impairment at the end of each financial year. On such indication the impairment loss, being the excess carrying value over the recoverable value of the assets, is charged to the statement of Profit & Loss in the respective financial years. The impairment loss recognized in the prior years is reversed in cases where the recoverable value exceeds the carrying value, upon the reassessment in the subsequent years.

d) Revenue Recognition :

i) Cement: Sales are recognized at the point of dispatch i.e., when significant risk is transferred to customers

ii) Power: Revenue from sale of power is recognized net of Wheeling charges.

e) Inventory Valuation:

i) Raw Materials, Coal, Stores & Spares, and Packing Materials: At Weighted Average Cost

ii) Materials in Transit: At Cost

iii) Work in process: At Weighted Average cost or Net Realizable Value, whichever is lower.

iv) Finished goods: At cost or Net Realizable Value, whichever is lower.

Cost comprises of cost of purchase, cost of conversion, & other costs incurred in bringing the inventories to the present location & condition.

f) Investments:

Investments are stated at cost of acquisition. Diminution in the value of investments other than temporary meant to be held for a long period of time is recognized.

g) Internal Consumption:

Internal consumption of the Company's products, which are other wise marketable, is accounted for at transfer price and is included under sales.

h) Transfer price for Inter divisional transfer / consumption:

i) Cement: Internal consumption is taken at cost plus statutory levies as applicable.

ii) Power (Hydel / Wind): At cost of purchase from APCPDCL/ TNEB by the division consuming such power.

i) Retirement Benefits:

Provident Fund is administered through Regional Provident Fund Commissioner. Superannuation and Gratuity are administered through the scheme of Life Insurance Corporation of India. The liability towards Leave Encashment and Gratuity is recognized on the basis of actuarial valuation. j) Borrowing Costs:

Borrowing costs are recognized as an expense in the period in which they are incurred. Borrowing costs incurred for acquiring and construction of assets are capitalized as part of the cost of such assets. k) Taxation:

Provision for income tax is made for both current and deferred taxes. Provision for current Income tax is made at current tax rates based on assessable income. Deferred income taxes are recognized for the future tax consequences attributable to timing differences between the carrying amounts of existing assets and liabilities and their respective tax bases. The effect on deferred tax assets and liabilities of a change in tax rates as stated in the financial statements is recognized 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 when there is virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

l) Contingencies :

The Company recognizes provisions when there is present obligation as a result of past event and it is probable that there will be an outflow of resources and reliable estimate can be made of the amount of obligation. A disclosure for contingent liabilities is made in the notes to accounts when there is a possible obligation or a present obligation that may, but probably will not, require an out flow of resources. Contingent assets are neither recognized nor disclosed in the financial statements.

m) Earnings Per Share:

Earnings per share is calculated by dividing the net profit or loss for the year attributable to equity share holders by the weighted average no of equity shares outstanding during the year.


Mar 31, 2011

A) System of Accounting :

i) Financial Statements are prepared in accordance with Generally Accepted accounting principles in India (GAAP) under the historical cost convention.

ii) The Company follows the mercantile system of accounting and recognizes income and expenditure on accrual basis.

iii) Investment subsidy not specifically related to any fixed asset is credited to a specific reserve upon receipt and retained till the requisite conditions are fulfilled. On fulfillment of such conditions, the same is transferred to Capital Reserve.

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 end. Although these estimates are based upon managements best knowledge of current events and actions, actual results could differ from these estimates.

c) Fixed Assets :

i) All Fixed Assets are stated at their original cost of acquisition/installation less depreciation.

ii) Capital Work-in-progress is stated at amount expended (including advances) up to the date of the Balance Sheet.

iii) All the fixed assets are assessed for any indication of impairment at the end of each financial year. On such indication the impairment loss, being the excess carrying value over the recoverable value of the assets, are charged to the profit & loss account in the respective financial years. The impairment loss recognized in the prior years is reversed in cases where the recoverable value exceeds the carrying value, upon the reassessment in the subsequent years.

d) Expenditure during construction period :

Expenditure during construction period is grouped under "Capital work in progress". Upon commencement of commercial production, the expenditure is allocated to buildings and plant and machinery in the ratio of their direct cost.

e) Depreciation :

Depreciation on Fixed Assets is provided in accordance with Schedule XIV of the Companies Act, 1956, on Straight Line Method in respect of Buildings, Plant and Machinery, and on Written Down Value Method in respect of other Fixed Assets.

f) Amortization :

Cost of compensatory land (intangibles) transferred to Government of Andhra Pradesh in lieu of forest land diverted for mining and free hold land for mining is amortized over the tenure of the Mining lease.

g) Revenue Recognition :

i) Cement :

Sales are recognized at the point of dispatch i.e when significant risk is transferred to customers.

ii) Power :

Revenue from sale of power is recognized net of Wheeling charges.

h) Inventory Valuation

i) Raw Materials, Coal Stores & Spares, and Packing Materials: At Weighted average Cost

ii) Materials in Transit: At Cost

iii) Work in process: At Weighted Average cost or Net Realisable Value, which ever is lower.

iv) Finished goods: At cost or Net Realisable Value, which ever is lower. Cost comprises of cost of purchase, cost of conversion, & other costs incurred in bringing the inventories to the present location & condition.

i) Power Subsidy :

The Power subsidy granted by the Andhra Pradesh State Electricity Board pursuant to GO issued by the Department of Industries and Commerce is treated as a Capital Receipt.

j) Investments :

Investments are stated at cost of acquisition. Diminution in the value of investments other than temporary meant to be held for a long period of time is recognized.

k) Internal Consumption :

Internal consumption of the Companys products, which are other wise marketable, is accounted for at transfer price and is included under sales.

I) Transfer price for Inter divisional transfer/consumption :

i) Cement: Internal consumption is taken at cost plus statutory levies as applicable.

ii) Power

Hydel/Wind: At cost of purchase from APCPDCL/ TNEB by the division consuming such Power

m) Retirement Benefits:

Provident Fund is administered through Regional Provident Fund Commissioner. The Superannuation and Gratuity are administered through the scheme of Life Insurance Corporation of India. The liability towards Leave Encashment and Gratuity is recognized on the basis of actuarial valuation.

n) Borrowing Costs :

Borrowing costs are recognized as an expense in the period in which they are incurred. Borrowing costs incurred for acquiring and construction of assets are capitalised as part of the cost of such assets.

o) Taxation : Provision for income tax is made for both current and deferred taxes. Provision for current Income tax is made at current tax rates based on assessable income. Deferred income taxes are recognized for the future tax consequences attributable to timing differences between the carrying amounts of existing assets and liabilities and their respective tax bases. The effect on deferred tax assets and liabilities of a change in tax rates as stated in the financial statements is recognized 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 when there is virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

p) Contingencies : The Company recognizes provisions when there is present obligation as a result of past event and it is probable that there will be an outflow of resources and reliable estimate can be made of the amount of obligation. A disclosure for contingent Liabilities is made in the notes to accounts when there is a possible obligation or a present obligation that may, but probably will not, require an out flow of resources. Contingent assets are neither recognized nor disclosed in the financial statements.

q) Earning Per Share: Earning per share is calculated by dividing the net profit or loss for the year attributable to equity share holders by the weighted average no of equity shares outstanding during the year.


Mar 31, 2010

A) System of Accounting :

i) Financial Statements are based on historical cost.

ii) The Company follows the mercantile system of accounting and recognizes income and expenditure

on accrual basis. iii) Investment subsidy not specifically related to any fixed asset is credited to a specific reserve upon

receipt and retained till the requisite conditions are fulfilled. On fulfillment of such conditions, the

same is transferred to Capital Reserve.

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 end. Although these estimates are based upon managements best knowledge of current events and actions, actual results could differ from these estimates.

c) Fixed Assets :

i) All Fixed Assets are stated at their original cost of acquisition / installation less depreciation.

ii) Capital Work-in-progress is stated at amount expended (including advance) up to the date of the Balance Sheet.

iii) All the fixed assets are assessed for any indication of impairment at the end of each financial year. On such indication the impairment loss, being the excess carrying value over the recoverable value of the assets, are charged to the profit & loss account in the respective financial years. The impairment loss recognized in the prior years is reversed in, cases where the recoverable value exceeds the carrying value, upon the reassessment in the subsequent years.

d) Expenditure during construction period :

Expenditure during construction period is grouped under "Capital work in progress". Upon commencement of commercial production, the expenditure is allocated to buildings and plant and machinery in the ratio of their direct cost.

e) Depreciation :

Depreciation on Fixed Assets is provided in accordance with Schedule XIV of the Companies Act, 1956, on Straight Line Method in respect of Buildings, Plant and Machinery and on Written Down Value Method in respect of other Fixed Assets.

f) Amortization :

Cost of compensatory land (intangibles) transferred to Government of Andhra Pradesh in lieu of forest land diverted for mining and free hold land for mining is amortized over the tenure of the Mining lease.

g) Revenue Recognition : i) Cement :

Revenue Sale of goods is recognized at the point of dispatch i.e when significant risk are transferred to customers. ii) Power :

Revenue from sale of power is recognized net of Wheeling charges on power is supplied to Customers.

h) Inventory Valuation

i) Raw Materials, Coal, Stores & Spares, and Packing Materials: At Weighted average Cost

ii) Materials in Transit : At Cost

iii) Work in process : At Weighted Average cost or Net Realisable Value, which ever is lower.

iv) Finished goods : At Weighted Average cost or Net Realisable Value, whichever is lower. Cost comprises of cost of purchase, cost of conversion & other costs incurred in bringing the inventories to the present location & condition.

i) Power Subsidy :

The Power Subsidy granted by the Andhra Pradesh State Electricity Board pursuant to GO issued by the Department of Industries and Commerce is treated as a Capital Receipt.

j) Investments :

Investments are stated at cost of acquisition. Diminution in the value of investments other than temporary meant to be held for a long period of time is recognized.

k) Internal Consumption :

Internal consumption of the Companys products, which are otherwise marketable, is accounted for at transfer price and is included under sales.

1) Transfer price for Inter divisional transfer / consumption :

i) Cement : Internal consumption is taken at cost plus statutory levies as applicable. ii) Power

Hydel / Wind : At cost of purchase from APCPDCL / TNEB by the division consuming such power

m) Retirement Benefits:

Provident Fund is administered through Regional Provident Fund Commissioner. The Superannuation and Gratuity Funds are administered through the scheme of Life Insurance Corporation of India. The contributions to the above said funds are charged against revenue. Provision for leave encashment is made on the basis of actuarial valuation.

n) Borrowing Costs :

Borrowing costs are recognized as an expense in the period in which they are incurred. Borrowing costs incurred for acquiring and construction of assets are capitalised as part of the cost of such assets.

o) Taxation : Provision for income tax is made for both current and deferred taxes. Provision for current Income tax is made at current tax rates based on assessable income. Deferred income taxes are recognized for the future tax consequences attributable to timing differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. The effect on deferred tax assets and liabilities of a change in tax rates is recognized 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 to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

p) Contingencies : The Company recognises provisions when where is present obligation as a result of past event and it is probable that there will be an outflow of resources and reliable estimate can be made of the amount of obligation. A disclosure for contingent liabilities is made in the notes to accounts when there is a possible obligation or a present obligation that may, but probably will not, require an out flow of resources. Contingent assets are neither recognised nor disclosed in the financial statements.

q) Earning Per Share: Earning share is calculated by dividing the net profit or loss for the year attributable to equity share holders by the weighted average number of equity shares outstanding during the year.

 
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