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Accounting Policies of Duncan Engineering Ltd. Company

Mar 31, 2015

2.1 Basis of preparation :

The financial statements have been prepared under historical cost convention, on accrual basis of accounting and in accordance with the generally accepted accounting principles in India and the provision of the Companies Act, 2013. The company has prepared these financial statements to comply in all material respects with the accounting standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules 2014.

2.2 Use of estimates :

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

2.3 Classification of Assets and Liabilities as Current and Non Current

All assets and liabilities are classified as current or non-current as per the Company's normal operating cycle and other criteria set out in Schedule II to the Companies Act, 2013. Based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, 12 months has been considered by the Company for the purpose of current/ non-current classification of assets and liabilities.

2.4 Revenue Recognition :

Sale of goods :

Domestic sales are recognized on dispatch, and are net of sales tax. Export sales are recognized on shipment, on the basis of the Bills of Lading.

Sale of services :

Revenue from services is recognized on rendering of services in accordance with the Contractual arrangements.

2.5 Fixed Assets :

(a) Tangible Assets :

Tangible fixed assets are stated at cost less accumulated depreciation/ amortization and impairments, if any. Direct cost including the purchase price and any attributable cost of bringing the asset to its working condition for its intended use are capitalized when fixed assets are ready for use.

(b) Intangible Assets :

Intangible Assets resulting in future economic benefits where the cost can be reliably measured are capitalized. Intangible assets are stated at cost less accumulated depreciation/ amortization and impairment loss.

2.6 Depreciation & Amortization :

Depreciation on additions/ deletions to fixed assets i.e. Tangible & Intangible is calculated pro-rata from/ upto the date of such additions/ deletions. Depreciation on fixed assets is provided on useful life basis at the rates and the manner provided in Schedule II of Companies Act, 2013 except:

Sr. Asset Usefullife As Useful Life considered No. Classification per Schedule II by Company

1 Vehicles 10 5

2 Intangible Asset (Computer Software) Not specified 5

Leasehold Improvements are amortized equally over the period of the respective leases.

Asset purchsed for value not exceeding Rs. 5000/- is fully depreciated in the year of purchase.

2.7 Impairment of Assets :

The Company assesses at each Balance Sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or recoverable amount of the cash generation unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the Statement of Profit and Loss. If at the Balance Sheet date there is an indication that if a previously assessed impairment loss no longer exist, the recoverable amount is reassessed and the assets is reflected at the recoverable amount.

2.8 Foreign Currency Transactions :

All foreign currency receivables and payables, except those covered under forward exchange contracts, are restated at the exchange rate prevailing as on the date of Balance Sheet and exchange differences arising thereon are debited /credited to the Statement of Profit and Loss. In case of assets and liabilities covered by forward contracts, the exchange difference is recognized over the life of the contract. Exchange differences arising on concluded transactions during the year are debited/ credited in the Statement of Profit and Loss of the same year.

2.9 Investments :

Long Term Investments are valued at cost. The company provides for diminution other than temporary, in the value of Long Term investments. Current Investments are stated at lower of cost and fair value.

2.10 Valuation of Inventory :

Inventories are valued at lower of cost and Net realizable value.

Cost of raw materials, stores and spares are determined on a weighted average basis.

Cost of work-in-progress includes raw material cost determined on a weighted average basis, labour charges and proportionate factory overheads.

Cost of finished goods includes raw material cost determined on a weighted average basis, labour charges, proportionate factory overheads and excise duty.

2.11 Segment Reporting

The accounting policies adopted for segment reporting are in conformity with the accounting policies adopted for the Company. Primary Segments are identified based on the nature of products and services, the different risks and returns and the internal business reporting system. Revenue, Expense, Assets and Liabilities, which relate to the Company as a whole and could not be allocated to segments on a reasonable basis, have been classified as unallocated. Secondary segment is identified based on geography by location of customers i.e. in India and outside India. Inter-segment revenue have been accounted for based on the transaction price agreed to between the segments, which is primarily market based.

2.12 Employee Benefits :

I. Short Term Employee Benefits

All employee benefits payable within 12 months of rendering of services are classified as short term employee benefits. All Short term employee benefits are accounted on undiscounted basis during the accounting period based on services rendered by employees.

II. Long Term Employee Benefits

All employee benefits other than short term employee benefits are classified as long term employee benefits. The Company has both defined contribution and defined benefits plan.

a) Defined Contribution Plan Provident fund

Each eligible employee and the Company make an equal contribution at a percentage of the basic salary specified under the Employees Provident Funds and Miscellaneous Provisions Act, 1952. The Company has no further obligations under the plan beyond its periodic contributions. The Company contribution towards this fund is charged to the Statement of Profit and Loss.

Superannuation

The Superannuation Contribution is based on a percentage of basic salary payable to eligible employees for the period of service. The Company contribution is made to the trust which is manage by Holding Company, which is charged to the Statement of Profit and Loss.

b) Defined Benefit Plan

Gratuity, which is a defined benefit scheme is funded with LIC on projected credit unit method on the basis of an actuarial valuation done at the year end and is charged to the Statement of Profit & Loss.

III. Other Long Term Employee Benefits

Accrued leave is a long term employee benefit. Compensated absences are provided based on actuarial valuation as at Balance Sheet date and is recognized in the Statement of Profit & Loss.

2.13 Taxation:

(a) Current Tax :

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

(b) Deferred Tax :

Deferred tax is recognized, subject to the consideration of prudence, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

(c) Minimum Alternate Tax (MAT) Credit Entitlement :

MAT paid in accordance with tax laws, which give rise to future economic benefits in the form of adjustment of future tax liability, is recognized as an asset only when, based on convincing evidence, it is probable that the future economic benefits associated with it will flow to the Company and the assets can be measured reliably.

2.14 Borrowing Cost :

Borrowing cost directly attributable to the acquisition or construction of qualifying assets are capitalized. Other borrowing costs are recognized as expenses in the period in which they are incurred. In determining the amount of borrowing costs eligible for capitalization during the period, any income earned on the temporary investments of those borrowing is deducted from cost incurred.

2.15 Operating Leases

Lease rent in respect of assets taken on operating lease are charged to Statement of Profit & Loss as per the terms of lease agreements.

2.16 Provisions, Contingent Liability and Contingent assets :

The Company recognizes a provision when there is a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. When there is a possible obligation or a present obligation that the likelihood of outflow of resources is remote, no provision or disclosure is made. Contingent assets are neither recognized nor disclosed in the financial statement.


Mar 31, 2013

1.1 Basis of preparation :

These financial statements have been prepared in accordance with the generally accepted accounting principles in India under the historical cost convention on accrual basis. These financial statements have been prepared to comply in all material aspects with the, accounting standards notified under Section 211(3C) [Companies (Accounting Standards) Rules, 2006, as amended] and the other relevant provisions of the Companies Act, 1956 (the Act).

1.2 Use of estimates :

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

1.3 Fixed Assets :

(a) Tangible Assets :

Tangible fixed assets are stated at cost less accumulated depreciation/ amortization and impairments, if any. Direct cost including the purchase price and any attributable cost of bringing the asset to its working condition for its intended use are capitalized when fixed assets are ready for use.

(b) Intangible Assets :

Intangible Assets resulting in future economic benefits where the cost can be reliably measured are capitalized. Intangible assets are stated at cost less accumulated depreciation/ amortization and impairment loss.

1.4 Depreciation & Amortization :

Depreciation on additions/ deletions to fixed assets is calculated pro-rata from/ upto the date of such additions/ deletions. Depreciation is provided on a straight line method on the cost of tangible assets, at the rates given in Schedule XIV to the Companies Act, 1956 except:

(i) Vehicles, which have been depreciated in 7 years period.

(ii) Computers, which have been depreciated in 4 years period.

(iii) Leasehold Improvements are amortized equally over the period of the respective leases.

(iv) Guest house Equipments and Furniture which have been depreciated in 3 years period.

Depreciation on additions/ deletions to intangible assets is calculated pro-rata from/ upto the date of such additions/ deletions. Depreciation on intangible assets is provided on a straight line method at the following rates:

1.5 Impairment of Assets :

The Company assesses at each Balance Sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or recoverable amount of the cash generation unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the Statement of Profit and Loss. If at the Balance Sheet date there is an indication that if a previously assessed impairment loss no longer exist, the recoverable amount is reassessed and the assets is reflected at the recoverable amount.

1.6 Foreign Currency Transactions :

All foreign currency receivables and payables, except those covered under forward exchange contracts, are restated at the exchange rate prevailing as on the date of Balance Sheet and exchange differences arising thereon are debited /credited to the Statement of Profit and Loss. In case of assets and liabilities covered by forward contracts, the exchange difference is recognized over the life of the contract. Exchange differences arising on concluded transactions during the year are debited/credited in the Statement of Profit and Loss of the same year.

1.7 Investments :

Long Term Investments are valued at cost. Provision is made to recognize a diminution, other than temporary, in the value of investments. Current Investments are stated at lower of cost and fair value.

1.8 Valuation of Inventory :

(a) Inventories are valued at lower of cost and Net realizable value.

Cost of raw materials, stores and spares are determined on a weighted average basis.

Cost of work-in-progress includes raw material cost determined on a weighted average basis, labour charges and proportionate factory overheads.

Cost of finished goods includes raw material cost determined on a weighted average basis, labour charges, proportionate factory overheads and excise duty.

1.9 Revenue Recognition :

Sale of goods :

Domestic sales are recognized on dispatch, and are net of sales tax. Export sales are recognized on shipment, on the basis of the Bills of

Lading.

Sale of services :

Revenue from services is recognized on rendering of services in accordance with the Contractual arrangements.

1.10 Employee Benefits :

(i) Contribution towards the defined contribution plans are recognised in the Statement of Profit and Loss on accrual basis.

(ii) Liabilities in respect of defined benefit plans are determined based on actuarial valuation made by an independent actuary, using Projected Unit Credit Method, as at each balance sheet date. The actuarial gains or losses are recognised immediately in the Statement of Profit and Loss.

(iii) Leave Encashment has been determined and accrued on the basis of actuarial valuation.

1.11 Taxation:

(a) Current Tax :

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

(b) Deferred Tax :

Deferred tax is recognized, subject to the consideration of prudence, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

(c) Minimum Alternate Tax (MAT) Credit Entitlement :

MAT paid in accordance with tax laws, which give rise to future economic benefits in the form of adjustment of future tax liability, is recognized as an asset only when, based on convincing evidence, it is probable that the future economic benefits associated with it will flow to the Company and the assets can be measured reliably.

1.12 Borrowing Cost :

Borrowing cost directly attributable to the acquisition or construction of qualifying assets are capitalized. Other borrowing costs are recognized as expenses in the period in which they are incurred. In determining the amount of borrowing costs eligible for capitalization during the period, any income earned on the temporary investments of those borrowing is deducted from cost incurred.

1.13 Provisions, Contingent Liability and Contingent assets :

The Company recognizes a provision when there is a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. When there is a possible obligation or a present obligation that the likelihood of outflow of resources is remote, no provision or disclosure is made. Contingent assets are neither recognized nor disclosed in the financial statement.


Mar 31, 2012

1.1 Basis of preparation :

These financial statements have been prepared in accordance with the generally accepted accounting principles in India under the historical cost convention on accrual basis. These financial statements have been prepared to comply in all material aspects with the, accounting standards notified under Section 211(3C) [Companies (Accounting Standards) Rules, 2006, as amended] and the other relevant provisions of the Companies Act, 1956 (the Act).

All assets and liabilities have been classified as current or non-current as per the Company's normal operating cycle and other criteria set out in the Schedule VI to the Companies Act, 1956. Based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current - non current classification of assets and liabilities.

1.2 Tangible Assets :

(a) Fixed assets are stated at cost less depreciation, where applicable. Leasehold land is stated at cost.

(b) Depreciation :

Depreciation on additions/ deletions to fixed assets is calculated pro-rata from/ upto the date of such additions/ deletions. Depreciation is provided on a straight line method on the cost of tangible assets less estimated residual value, at the rates given in Schedule XIV to the Companies Act, 1956 except:

(i) Vehicles, which have been depreciated in 7 years period.

(ii) Leasehold Improvements are amortised equally over the period of the respective leases.

(iii) Guest house Equipments and Furniture which have been depreciated in 3 years period.

1.3 Intangible Assets :

Intangible Assets are stated at cost less accumulated depreciation and impairment loss.

1.4 Employee Benefits :

(i) Contribution towards the defined contribution plans are recognised in the Statement of Profit and Loss on accrual basis.

(ii) Liabilities in respect of defined benefit plans are determined based on actuarial valuation made by an independent actuary, using Projected Unit Credit Method, as at each balance sheet date. The actuarial gains or losses are recognised immediately in the Statement of Profit and Loss.

(iii) Leave Encashment has been determined and accrued on the basis of actuarial valuation.

1.5 Valuation of Inventory :

(a) Inventories are valued at lower of cost and market value.

Cost of raw materials, stores and spares are determined on a weighted average basis.

Cost of work-in-progress includes raw material cost determined on a weighted average basis, labour charges and proportionate factory overheads.

Cost of finished goods includes raw material cost determined on a weighted average basis, labour charges, proportionate factory overheads and excise duty.

(b) Accounting of CENVAT :

The Company follows on a consistent basis, the "non-inclusive" method of accounting for CENVAT under Central Excise Act, 1944 with regard to its inventories, purchase and consumption.

1.6 Investments:

Long Term Investments are valued at cost. Provision is made to recognise a diminution, other than temporary, in the value of investments. Current Investments are stated at lower of cost and fair value.

1.7 Taxation:

(a) Current Tax :

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

(b) Deferred Tax:

Deferred tax is recognised, subject to the consideration of prudence, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

(c) Minimum Alternate Tax (MAT) Credit Entitlement:

MAT paid in accordance with tax laws, which give rise to future economic benefits in the form of adjustment of future tax liability, is recognised as an asset only when, based on convincing evidence, it is probable that the future economic benefits associated with it will flow to the Company and the assets can be measured reliably.

1.8 Foreign Currency Transactions :

All foreign currency receivables and payables, except those covered under forward exchange contracts, are restated at the exchange rate prevailing as on the date of Balance Sheet and exchange differences arising thereon are debited /credited to the Statement of Profit and Loss. In case of assets and liabilities covered by forward contracts, the exchange difference is recognised over the life of the contract. Exchange differences arising on concluded transactions during the year are debited/credited in the Statement of Profit and Loss of the same year.

1.9 Impairment of Assets :

The Company assesses at each Balance Sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or recoverable amount of the cash generation unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognised in the Statement of Profit and Loss. If at the Balance Sheet date there is an indication that if a previously assessed impairment loss no longer exist, the recoverable amount is reassessed and the assets is reflected at the recoverable amount.

1.10 Provisions and Contingencies :

The Company recognises a provision when there is a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. When there is a possible obligation or a present obligation that the likelihood of outflow of resources is remote, no provision or disclosure is made.

1.11 Revenue Recognition :

Sale of goods:

Domestic sales are recognised on dispatch, and are net of sales tax. Export sales are recognised on shipment, on the basis of the Bills of Lading.

Sale of services:

Revenue from services is recognised on rendering of services in accordance with the Contractual arrangements.

1.12 Use of estimates :

The Preparation of Financial Statement requires estimates and assumptions to be made that affect the reported amount of Assets and Liabilities on date of the financial statement and reported amount of revenues and expenses during reporting period. Difference between actual results and estimates are recognised in the period in which results are known/materialised.

1.13 Borrowing Cost:

Borrowing cost directly attributable to the acquisition or construction of qualifying assets are capitalised. Other borrowing costs are recognised as expenses in the period in which they are incurred. In determining the amount of borrowing costs eligible for capitalisation during the period, any income earned on the temporary investments of those borrowing is deducted from cost incurred.


Mar 31, 2011

(a) Accounting Conventions:

The financial statements are prepared on an accrual basis of accounting and in accordance with the generally accepted accounting principles in India, provisions of the Companies Act, 1956 (the Act) and comply in material aspects with the accounting standards notified under Section 211 (3C) of the Act, read with Companies (Accounting Standards) Rules, 2006.

(b) Fixed Assets:

Fixed assets are stated at cost less depreciation, where applicable. Leasehold land is stated at cost.

(c) Depreciation:

Depreciation has been calculated on Straight Line Method on the original cost of the assets at the

rates given in Schedule XIV to the Act except:

(i) Vehicles, which have been depreciated in 7 years period.

(ii) Leasehold Improvements are amortised equally over the period of the respective leases.

(iii) Computers, which have been depreciated in 4 years period.

(iv) Guest house Equipments and Furniture which have been depreciated in 3 years period.

(d) Employee Benefits:

(i) Contribution towards the defined contribution plans are recognised in the Profit and Loss Account on accrual basis.

(ii) Liabilities in respect of defined benefit plans are determined based on actuarial valuation made by an independent actuary, using Projected Unit Credit Method, as at each balance sheet date. The actuarial gains or losses are recognised immediately in the profit and loss account.

(iii) Leave Encashment has been determined and accrued on the basis of actuarial valuation.

(e) Valuation of Inventory:

Inventories are valued at lower of cost and market value.

Cost of raw materials, stores and spares are determined on a weighted average basis.

Cost of work-in-progress includes raw material cost determined on a weighted average basis,

labour charges and proportionate factory overheads.

Cost of finished goods includes raw material cost determined on a weighted average basis, labour charges, proportionate factory overheads and excise duty.

(f) Accounting of CENVAT:

The Company follows on a consistent basis, the "non-inclusive" method of accounting for CENVAT under Central Excise Act, 1944 with regard to its inventories, purchase and consumption.

(g) Investments:

Long Term Investments are valued at cost. Provision is made to recognise a diminution, other than temporary, in the value of investments. Current Investments are stated at lower of cost and fair value.

(h) Taxation:

(a) Current Tax

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

(b) Deferred Tax

Deferred tax is recognised, subject to the consideration of prudence, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

(c) Minimum Alternate Tax (MAT) Credit Entitlement

MAT paid in accordance with tax laws, which give rise to future economic benefits in the form of adjustment of future tax liability, is recognised as an asset only when, based on convincing evidence, it is probable that the future economic benefits associated with it will flow to the Company and the assets can be measured reliably.

(i) Foreign Currency Transactions:

All foreign currency receivables and payables/ except those covered under forward exchange contracts, are restated at the exchange rate prevailing as on the date of Balance Sheet and exchange differences arising thereon are debited /credited to the Profit and Loss Account. In case of assets and liabilities covered by forward contracts, the exchange difference is recognised over the life of the contract. Exchange differences arising on concluded transactions during the year are debited/credited in the Profit and Loss Account of the same year.

j) Impairment of Assets:

The Company assesses at each Balance Sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or recoverable amount of the cash generation unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognised in the Profit and Loss Account. If at the Balance Sheet date there is an indication that if a previously assessed impairment loss no longer exist, the recoverable amount is reassessed and the assets is reflected at the recoverable amount.

(k) Provisions and Contingencies:

The Company recognises a provision when there is a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. When there is a possible obligation or a present obligation that the likelihood of outflow of resources is remote, no provision or disclosure is made.

(l) Revenue Recognition:

Sale of goods

Domestic sales are recognised on dispatch, and are net of sales tax. Export sales are recognised on shipment, on the basis of the Bills of Lading.

Sale of services

Revenue from services is recognised on rendering of services in accordance with the Contractual arrangements.

(m) Use of estimates:

The Preparation of Financial Statement requires estimates and assumptions to be made that affect the reported amount of Assets and Liabilities on date of the financial statement and reported amount of revenues and expenses during reporting period. Difference between actual results and estimates are recognized in the period in which results are known/materialised.

(n) Borrowing Cost:

Borrowing cost directly attributable to the acquisition or construction of qualifying assets are capitalised. Other borrowing costs are recognised as expenses in the period in which they are incurred. In determining the amount of borrowing costs eligible for capitalisation during the period, any income earned on the temporary investments of those borrowing is deducted from cost incurred.


Mar 31, 2010

(a) Accounting Conventions:

The financial statements are prepared on an accrual basis of accounting and in accordance with the generally accepted accounting principles in India, provisions of the Companies Act, 1956 (the Act) and comply in material aspects with the accounting standards notified under Section 211 (3C) of the Act, read with Companies (Accounting Standards) Rules, 2006.

(b) Fixed Assets:

Fixed assets are stated at cost less depreciation, where applicable. Leasehold land is stated at cost.

(c) Depreciation:

Depreciation has been calculated on Straight Line Method on the original cost of the assets at the rates given

in Schedule XIV to the Act except:

(i) Vehicles, which have been depreciated in 7 years period.

(ii) Leasehold Improvements are amortised equally over the period of the respective leases.

(Hi) Cpmputers, which have been depreciated in 4 years period.

(iv) Guest house Equipments and Furniture which have been depreciated in 3 years period.

(d) Employee Benefits:

(i) Contribution towards the defined contribution plans are recognised in the Profit and Loss Account on accrual basis.

(ii) Liabilities in respect of defined benefit plans are determined based on actuarial valuation made by an independent actuary, using Projected Unit Credit Method, as at each balance sheet date. The actuarial gains or losses are recognised immediately in the profit and loss account.

(iii) Leave Encashment has been determined and accrued on the basis of actuarial valuation.

(e) Valuation of Inventory :

Inventories are valued at lower of cost and market value.

Cost of raw materials, stores and spares are determined on a weighted average basis.

Cost of work-in-progress includes raw material cost determined on a weighted average basis, labour charges

and proportionate factory overheads.

Cost of finished goods includes raw material cost determined on a weighted average basis, labour charges, proportionate factory overheads and excise duty.

(f) Accounting of CENVAT :

The Company follows on a consistent basis, the "non-inclusive" method of accounting for CENVAT under Central Excise Act, 1944 with regard to its inventories, purchase and consumption.

(g) Investments:

Long Term Investments are valued at cost. Provision is made to recognise a diminution, other than temporary, in the value of investments. Current Investments are stated at lower of cost and market value.

(h) Taxation

(a) Current Tax

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

(b) Deferred Tax

Deferred tax is recognised, subject to the consideration of prudence, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

Schedule 13 (Continued)

(c) Minimum Alternate Tax (MAT) Credit Entitlement

MAT paid in accordance with tax laws, which give rise to future economic benefits in the form of adjustment

of future tax liability, is recognised as an asset only when, based on convincing evidence, it is probable that

the future economic benefits associated with it will flow to the Company and the assets can be measured

reliably.

(i) Foreign Currency Transactions :

All foreign currency receivables and payables, except those covered under forward exchange contracts, are restated at the exchange rate prevailing as on the date of Balance Sheet and exchange differences arising thereon are debited /credited to the Profit and Loss Account. In case of assets and-liabilities covered by forward contracts, the exchange difference Is recognised over the life of the contract. Exchange differences arising on concluded transactions during the year are debited/credited in the Profit and Loss Account of the same year.

(j) Impairment of Assets :

The Company assesses at each Balance Sheet date whether there is any indication that an asset may be Impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or recoverable amount of the cash generation unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an Impairment loss and is recognised in the Profit and Loss Account. If at the Balance Sheet date there is an Indication that if a previously assessed Impairment loss no longer exist, the recoverable amount is reassessed and the assets is reflected at the recoverable amount.

(k) Provisions and Contingencies :

The Company recognises a provision when there Is a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. When there is a possible obligation or a present obligation that the likelihood of outflow of resources is remote, no provision or disclosure Is made.

(I) Revenue Recognition : Sale of goods

Domestic sales are recognised on despatch, and are net of sales tax. Export sales are recognised on shipment, on the basis of the Bills of Lading Sale of services

Revenue from services is recognised on rendering of services In accordance with the Contractual arrangements.

(m) Use of estimates

The Preparation of Financial Statement requires estimates and assumptions to be made that affect the reported amount of Assets and Liabilities on date of the financial statement and reported amount of revenues and expenses during reporting period. Difference between actual results and estimates are recognized In the period In which results are known/materialised

(n) Borrowing Cost

Borrowing cost directly attributable to the acquisition or construction of qualifying assets are capitalised. Other borrowing costs are recognised as expenses in the period In which they are Incurred. In determining the amount of borrowing costs eligible for capitalisation during the period, any income earned on the temporary Investments of those borrowing Is deducted from cost Incurred.

 
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