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Accounting Policies of Hindustan Tin Works Ltd. Company

Mar 31, 2015

1.1 Basis of Preparation of Financial Statements

The financial statement has been prepared to comply in all material respect with the mandatory Accounting Standard notified by the Ceneral Government as per Companies (Accounting Standard) Rules 2006 ( as amended ) read with Circular No. 15/2013 dated September 13, 2013 and General Circular No. 8/2014 dated 04th April 2014 issued by the Ministry of Corporate Affair and the relevant provision of Companies Act 2013. These financial statements have been prepared on an accrual basis and under historical cost convention on the basis of going concern The accounting policies adopted in the preparation of financial statement are consistent with those of previous year.

2.2 Recognition of Income and Expenditure:

Revenues /Income and Costs/Expenditure are generally accounted on accrual, as they are earned or incurred. Sales of Goods are recognized on transfer of significant risks and rewards of ownership which is generally on the dispatch of goods. Company makes export sales by using custom / cenvat paid material against which Company is entitled to import duty free raw material and duty draw back. The accounting for export benefits are on accrual basis and same is reduced from the cost of raw material consumed in the financial statement. In case of advance authorization the estimated amount of export benefits have been recognized in the financial statement and suitable adjustment for the difference arising on actual receipt of material would be made in the year of receipt of material.

2.3 Uses 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 on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Differences between actual results and estimates are recognised in the period in which the results are known/materialized.

2.4 Fixed Assets

Fixed assets are stated at cost except Plant & Machinery shifted from erstwhile Sahibabad unit which were revalued on 30.6.92 and the assets of erstwhile Conwel Cans India Ltd. which has been taken on fair market value as per the approved valuer''s report.

2.5 Method of Depreciation:

Depreciation is provided on straight line method with NIL residual value (except in respect of assets belonging to Registered Office Depreciation on which has been provided at Written Down Value with 5.00% residual value) and at the rates and in the manner specified in the Schedule II of the Companies Act, 2013, (net of cenvat as applicable.) Depreciation on additions to assets or on sale/discardment of assets is calculated pro rata from the Date of such addition or up to the Date of such sale/discardment, as the case may be. Difference of Rs.314.66 lacs has been debited to the retain earning as on beginging of the financial year 2014-15 and its Deferred tax effect amounting to Rs. 106.95 lacs has been debited to Deferred Tax Liability by crediting in retained earning.

2.6 Investment

The Company has made long term investments shown under the Head " Non Current Investment" which are stated at cost. Provision for diminishing in value of the long term investment is made only if such a decline is other than temporary in the opinion of the management.

The investment in unquoted equity shares in JV company has now been classified under Current Investment as the same has been disposed off in the Financial Year 2015-16.

2.7 Value of Inventory

Inventories are valued at cost or net realizable value whichever is lower. The bases of valuation are as follows:-

Raw material, stores & spares : At cost or Net realizable value which ever is lower.

Work-in-process : At raw material cost plus Process cost.

Finished goods : At Market Price or Cost which ever is lower

Accounting of Raw Material purchase & closing stock is net of CENVAT & VAT credit. Claims & refunds, if any, shall be accounted for in the year of determination. The excise duty in respect of closing inventory of finished goods is not included in the valuation of finished goods inventory.

2.8 Foreign Currency Transaction

(i) Transactions in foreign currency are recorded at the exchange rate published by Custom department for the particular period on which the transaction recorded.

(ii) Current monetary Assets and Liabilities denominated in foreign currency are translated at the exchange rate prevailing at the date of balance sheet and gains or losses on translation are recognized in profit and Loss Account in the respective heads.

(iii) In respect of forward exchange contract assigned to foreign currency Assets / Liabilities, the difference due to change in exchange rate between the inception of forward contract and date of the balance sheet and proportionate premium / discount for the period up to the date of balance sheet is recognized in the profit loss Account. Any profit or loss arising on settlement / cancellation of forward contract is recognized as income or expense for the year in which they arise.

(iv) Any gain or loss arising on account of exchange difference either on settlement or on translation is accounted for in the Profit & Loss account except in case of long term foreign currency monetary items relating to acquisition of depreciable capital asset (other than regarded as borrowing cost) in which case they are adjusted to the carrying cost of such assets.

2.9 Research & Development

Revenue expenditure charged to Profit and Loss Account under respective heads of account and capital expenditure added to the cost of Fixed Assets in the year in which it is incurred.

2.10 Employees Benefits

(i) Defined Contribution Plans such as Provident Fund etc. are charged to the Profit & Loss Account as incurred.

(ii) Defined Benefit Plans - The present value of the obligation under such plan isdetermined based on an actuarial valuation using the Projected Unit Credit Method. Actuarial gains and losses arising on such valuation are recognised in the Profit & Loss Account. In case of funded defined benefit plans, the fair value of the plan assets is reduced from the gross obligation under the defined benefit plans, to recognize the obligation on net basis.

(iii) Other Long term Employee Benefits are recognised in the same manner as Defined Benefit Plans.

2.11 Accounting for Past Events

A provision is recognized when the Company has a present obligation as a result of past event and 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 financial statements, are not discounted to their present value and are determined based on best estimate required to settle the obligation at each Balance Sheet date and are adjusted to reflect the current best estimates.

2.12 Borrowing Cost

Borrowing costs includes interest cost and all ancillary costs incurred in connection with the arrangement of borrowings. Borrowing cost is considered as expenditure in the period and charge of to Profit and Loss Account. Fund borrowed for acquisition of qualifying fixed assets are capitalized till the date of commissioning and thereafter charged to Profit and Loss Account.

2.13 Provisions, Contingent Liabilities and Contingent Assets

Contingent liabilities, if any, are not recognized in the accounts but are disclosed by way of notes. Contingent assets are neither recognized nor disclosed in the financial statements.

2.14 Taxes on Income

Provision for tax is made as per Income Tax Act, 1961. Deferred tax assets/liabilities resulting from timing difference between book and taxable profit is accounted for considering the tax rate and laws that have been enacted or substantively enacted as on the balance sheet date. Deferred tax assets if any, are recognized and carry forward only to the extent that there is virtual certainty that the asset will be realized in future.

2.15 Impairment of Assets

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


Mar 31, 2014

1 Basis of Preparation of Financial Statements

These financial statements have been prepared on an accrual basis and under historical cost convention and in compliance, in all material aspects, with the applicable accounting principles in India, the applicable accounting standards notified under Section 211(3C ) and the other relevant provisions of the Companies Act, 1956.

All the 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 Schedule VI to the Companies Act, 1956.

2 Recognition of Income and Expenditure:

Revenues /Income and Costs/Expenditure are generally accounted on accrual, as they are earned or incurred.

Sales of Goods are recognized on transfer of significant risks and rewards of ownership which is generally on the dispatch of goods.

Company makes export sales by using custom / cenvat paid material against which Company is entitled to import duty free raw material and duty draw back.

The accounting for export benefits are on accrual basis and same is reduced from the cost of raw material consumed in the financial statement.

In case of advance authorization the estimated amount of export benefits have been recognized in the financial statement and suitable adjustment for the difference arising on actual receipt of material would be made in the year of receipt of material.

3 Uses 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 on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Differences between actual results and estimates are recognised in the period in which the results are known/materialized.

4 Fixed Assets

Fixed assets are stated at cost except Plant & Machinery shifted from erstwhile Sahibabad unit which were revalued on 30.6.92 and the assets of erstwhile Conwel Cans India Ltd. which has been taken on fair market value as per the approved valuer''s report.

5 Method of Depreciation:

Depreciation is provided on straight line method (except in respect of assets belonging to Registered Office Depreciation on which has been provided at Written Down Value) and at the rates and in the manner specified in the Schedule XIV of the Companies Act, 1956, (net of cenvat as applicable.) Depreciation on additions to assets or on sale/discardment of assets is calculated pro rata from the Date of such addition or up to the Date of such sale/discardment, as the case may be.

6 Investment

The Company has made long term investments which are stated at cost. Provision for diminishing in value of the long term investment is made only if such a decline is other than temporary in the opinion of the management.

7 Value of Inventory

Inventories are valued at cost or net realizable value whichever is lower. The basis of valuation are as follows:-

Raw material, stores & spares : At cost or Net realizable value which ever is lower.

Work-in-process : At raw material cost plus Process cost.

Finished goods : At Market Price or Cost which ever is lower

Accounting of Raw Material purchase & closing stock is net of CENVAT & VAT credit. Claims & refunds, if any, shall be accounted for in the year of determination. The excise duty in respect of closing inventory of finished goods is not included in the valuation of finished goods inventory.

8 Foreign Currency Transaction

(i) Transactions in foreign currency are recorded at the exchange rate published by Custom department for the particular month in which the transaction recorded.

(ii) Current monetary Assets and Liabilities denominated in foreign currency are translated at the exchange rate prevailing at the date of balance sheet and gains or losses on translation are recognized in profit and Loss Account in the respective heads.

(iii) In respect of forward exchange contract assigned to foreign currency Assets / Liabilities, the difference due to change in exchange rate between the inception of forward contract and date of the balance sheet and proportionate premium / discount for the period up to the date of balance sheet is recognized in the profit loss Account . Any profit or loss arising on settlement / cancellation of forward contract is recognized as income or expense for the year in which they arise.

(iv) Any gain or loss arising on account of exchange difference either on settlement or on translation is accounted for in the Profit & Loss account except in case of long term foreign currency monetary items relating to acquisition of depreciable capital asset (other than regarded as borrowing cost) in which case they are adjusted to the carrying cost of such assets.

9 Research & Development

Revenue expenditure charged to Profit and Loss Account under respective heads of account and capital expenditure added to the cost of Fixed Assets in the year in which it is incurred.

10 Employees Benefits

(i) Defined Contribution Plans such as Provident Fund etc. are charged to the Profit & Loss Account as incurred.

(ii) Defined Benefit Plans - The present value of the obligation under such plan is determined based on an actuarial valuation using the Projected Unit Credit Method. Actuarial gains and losses arising on such valuation are recognised in the Profit & Loss Account. In case of funded defined benefit plans, the fair value of the plan assets is reduced from the gross obligation under the defined benefit plans, to recognize the obligation on net basis.

(iii) Other Long term Employee Benefits are recognised in the same manner as Defined Benefit Plans.

11 Accounting for Past Events

A provision is recognized when the Company has a present obligation as a result of past event and 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 financial statements, are not discounted to their present value and are determined based on best estimate required to settle the obligation at each Balance Sheet date and are adjusted to reflect the current best estimates.

12 Borrowing Cost

Borrowing costs includes interest cost and all ancillary costs incurred in connection with the arrangement of borrowings. Borrowing cost is considered as expenditure in the period and charge of to Profit and Loss Account. Fund borrowed for acquisition of qualifying fixed assets are capitalized till the date of commissioning and thereafter charged to Profit and Loss Account.

13 Provisions, Contingent Liabilities and Contingent Assets

Contingent liabilities, if any, are not recognized in the accounts but are disclosed by way of notes. Contingent assets are neither recognized nor disclosed in the financial statements.

14 Taxes on Income

Provision for tax is made as per Income Tax Act, 1961. Deferred tax assets/liabilities resulting from timing difference between book and taxable profit is accounted for considering the tax rate and laws that have been enacted or substantively enacted as on the balance sheet date. Deferred tax assets if any, are recognized and carry forward only to the extent that there is virtual certainty that the asset will be realized in future.

15 Impairment of Assets

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


Mar 31, 2012

1.1 Basis of Preparation of Financial Statements

These financial statements have been prepared on an accrual basis and under historical cost convention and in compliance, in all material aspects, with the applicable accounting principles in India, the applicable accounting standards notified under Section 211(3C ) and the other relevant provisions of the Companies Act,1956.

All the 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 Schedule VI to the Companies Act, 1956.

1.2 Recognition of Income and Expenditure:

Revenues /Income and Costs/Expenditure are generally accounted on accrual, as they are earned or incurred.

Sales of Goods are recognized on transfer of significant risks and rewards of ownership which is generally on the dispatch of goods.

Company makes export sales by using custom / cenvat paid material against which Company is entitled to import duty free raw material/duty exemption pass book (DEPB) and duty draw back.

The accounting for export benefits are on accrual basis and same is reduced from the cost of raw material consumed in the financial statement.

In case of advance authorization the estimated amount of export benefits have been recognized in the financial statement and suitable adjustment for the difference arising on actual receipt of material would be made in the year of receipt of material.

1.3 Uses 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 on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Differences between actual results and estimates are recognised in the period in which the results are known/materialized.

1.4 Fixed Assets

Fixed assets are stated at cost except Plant & Machinery shifted from erstwhile Sahibabad unit which were revalued on 30.6.92 and the assets of erstwhile Conwel Cans India Ltd. which has been taken on fair market value as per the approved valuer's report.

1.5 Method of Depreciation

Depreciation is provided on straight line method (except in respect of assets belonging to Registered Office Depreciation on which has been provided at Written Down Value) and at the rates and in the manner specified in the Schedule XIV of the Companies Act, 1956, (net of cenvat as applicable.) Depreciation on additions to assets or on sale/discardment of assets is calculated pro rata from the month of such addition or up to the month of such sale/discardment, as the case may be.

1.6 Investment

The Company has made long term investments which are stated at cost. Provision for diminishing in value of the long term investment is made only if such a decline is other than temporary in the opinion of the management.

1.7 Value of Inventory

Inventories are valued at cost or net realizable value whichever is lower. The bases of valuation are as follows:-

Raw material, stores & spares : At cost or Net realizable value which ever is lower.

Work-in-process : At raw material cost plus Process cost.

Finished goods : At Market Price or Cost which ever is lower

(Determination of cost Selling Price less 10%)

Accounting of Raw Material purchase & closing stock is net of CENVAT & VAT credit. Claims & refunds, if any, shall be accounted for in the year of determination. The excise duty in respect of closing inventory of finished goods is not included in the valuation of finished goods inventory.

1.8 Foreign Currency Transaction

(i) Transactions in foreign currency are recorded at the exchange rate published by Custom department for the particular month in which the transaction recorded.

(ii) Current monetary Assets and Liabilities denominated in foreign currency are translated at the exchange rate prevailing at the date of balance sheet and gains or losses on translation are recognized in profit and Loss Account in the respective heads.

(iii) In respect of forward exchange contract assigned to foreign currency Assets / Liabilities, the difference due to change in exchange rate between the inception of forward contract and date of the balance sheet and proportionate premium / discount for the period up to the date of balance sheet is recognized in the profit loss Account . Any profit or loss arising on settlement / cancellation of forward contract is recognized as income or expense for the year in which they arise.

(iv) Any gain or loss arising on account of exchange difference either on settlement or on translation is accounted for in the Profit & Loss account except in case of long term foreign currency monetary items relating to acquisition of depreciable capital asset (other than regarded as borrowing cost) in which case they are adjusted to the carrying cost of such assets.

1.9 Research & Development

Revenue expenditure charged to Profit and Loss Account under respective heads of account and capital expenditure added to the cost of Fixed Assets in the year in which it is incurred.

1.10 Employees Benefits

(i) Defined Contribution Plans such as Provident Fund etc. are charged to the Profit & Loss Account as incurred.

(ii) Defined Benefit Plans - The present value of the obligation under such plan is determined based on an actuarial valuation using the Projected Unit Credit Method. Actuarial gains and losses arising on such valuation are recognised in the Profit & Loss Account. In case of funded defined benefit plans, the fair value of the plan assets is reduced from the gross obligation under the defined benefit plans, to recognize the obligation on net basis.

(iii) Other Long term Employee Benefits are recognised in the same manner as Defined Benefit Plans.

1.11 Accounting for Past Events

A provision is recognized when the Company has a present obligation as a result of past event and 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 financial statements, are not discounted to their present value and are determined based on best estimate required to settle the obligation at each Balance Sheet date and are adjusted to reflect the current best estimates.

1.12 Borrowing Cost

Borrowing costs includes interest cost and all ancillary costs incurred in connection with the arrangement of borrowings. Borrowing cost is considered as expenditure in the period and charge of to Profit and Loss Account. Fund borrowed for acquisition of qualifying fixed assets are capitalized till the date of commissioning and thereafter charged to Profit and Loss Account.

1.13 Provisions, Contingent Liabilities and Contingent Assets

Contingent liabilities, if any, are not recognized in the accounts but are disclosed by way of notes. Contingent assets are neither recognized nor disclosed in the financial statements.

1.14 Taxes on Income

Provision for tax is made as per Income Tax Act, 1961. Deferred tax assets/liabilities resulting from timing difference between book and taxable profit is accounted for considering the tax rate and laws that have been enacted or substantively enacted as on the balance sheet date. Deferred tax assets if any, are recognized and carry forward only to the extent that there is virtual certainty that the asset will be realized in future.

1.15 Impairment of Assets

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. Impairment is charged to the Profit & Loss Account in the year in which an asset is identified as impaired. The impairment loss recognized in the 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 on accrual & historical cost convention basis and in accordance with Accounting Standards issued by the Institute of Chartered Accountants of India and the requirements of the companies Act 1956.

2. Uses 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 on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Differences between actual results and estimates are recognised in the period in which the results are known/materialized.

3. Employee Benefit:

(a) Defined Contribution Plans such as Provident Fund etc. are charged to the Profit & Loss Account as incurred.

(b) Defined Benefit Plans - The present value of the obligation under such plan is determined based on an actuarial valuation using the Projected Unit Credit Method. Actuarial gains and losses arising on such valuation are recognised immediately in the Profit & Loss Account. In case of funded defined benefit plans, the fair value of the plan assets is reduced from the gross obligation under the defined benefit plans, to recognize the obligation on net basis.

(c) Other Long term Employee Benefits are recognised in the same manner as Defined Benefit Plans.

4. Revenue Recognition:

Revenue in respect of sale of products is recognized at the point of dispatch of materials to customers. Claims & Returns, if any, is accounted for in the year of determination. Sales includes sale of Tin Containers, lacquered sheet, printed sheet, tinplate, component, scrap. Sales are exclusive of sales tax & excise.

Company makes export sales by using custom paid material against which Company is entitled to import custom free raw material/duty exemption pass book (DEPB). The estimated amount of eligible custom duty is treated as receivables/ actual amount of DEPB is accounted for in the statement of affairs and accordingly cost of raw material is reduced.

5. Fixed Assets:

Fixed assets are stated at cost except Plant & Machinery shifted from erstwhile Sahibabad unit which were revalued on 30.6.92 and the assets of erstwhile Conwel Cans India Ltd. which has been taken on fair market value as per the approved valuer's report.

6. Depreciation :

Depreciation is provided on straight line method (except in respect of assets belonging to Registered Office Depreciation on which has been provided at Written Down Value) and at the rates and in the manner specified in the Schedule XIV of the Companies Act, 1956, (net of cenvat as applicable.) Depreciation on additions to assets or on sale/discardment of assets is calculated pro rata from the month of such addition or up to the month of such sale/discardment, as the case may be;

7. Inventories:

Inventories are valued at cost or net realizable value whichever is lower. The bases of valuation are as follows:- Raw material, stores & spares : At Cost or Net realisable value which ever is lower. Work-in-process : At raw material cost plus Process cost. Finished goods : At selling price less 10%

Accounting of Raw Material purchase & closing stock is net of CENVAT & VAT credit. Claims & refunds, if any, shall be accounted for in the year of determination.

8. Foreign Currency Transactions:

(i) Transactions in foreign currency are recorded at the exchange rate published by Custom department for the particular month date of transaction. Current monetary Assets and Liabilities denominated in foreign currency are translated at the exchange rate prevailing at the date of balance sheet and gains or losses on translation are recognized in profit and Loss Account.

(ii) In respect of forward exchange contacts assigned to foreign currency Assets / Liabilities, the difference due to change in exchange rate between the inception of forward contact and date of the balance sheet and proportionate premium / discount for the period up to the date of balance sheet is recognized in the profit loss Account . Any profit or loss arising on settlement / cancellation of forward contact is recognized as income or expense for the year in which they arise.

9. A provision is recognized when the Company has a present obligation as a result of past event and 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 financial statements, are not discounted to their present value and are determined based on best estimate required to settle the obligation at each Balance Sheet date and are adjusted to reflect the current best estimates.

10. Investment

The Company has made long term investments which are stated at cost. Provision for diminishing in value of the long term investment is made only if such a decline is other than temporary in the opinion of the management.

11. Impairment of Assets

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

12. Borrowing costs

Borrowing costs includes interest cost and all ancillary costs incurred in connection with the arrangement of borrowings. Borrowing cost is considered as expenditure in the period and charge of to Profit and Loss Account.


Mar 31, 2010

1. Accounting Convention :

The Financial Statements are prepared on accrual & historical cost convention basis and in accordance with Accounting Standards issued by the Institute of Chartered Accountants of India and the requirements of the companies Act 1956.

2. Uses 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 on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Differences between actual results and estimates are recognised in the period in which the results are known/materialized,

3. Employee Benefit:

(a) Defined Contribution Plans such as Provident Fund etc. are charged to the Profit & Loss Account as incurred.

(b) Defined Benefit Plans - The present value of the obligation under such plan is determined based on an actuarial valuation using the Projected Unit Credit Method. Actuarial gains and losses arising on such valuation are recognised immediately in the Profit & Loss Account. In case of funded defined benefit plans, the fair value of the plan assets is reduced from the gross obligation under the defined benefit plans, to recognize the obligation on net basis.

(c) Other Long term Employee Benefits are recognised in the same manner as Defined Benefit Plans.

4. Revenue Recognition:

Revenue in respect of sale of products is recognized at the point of dispatch of materials to customers. Claims & Returns, if any, is accounted for in the year of determination, Sales includes sale of Tin Containers, lacquered sheet, printed sheet, tinplate, component, scrap. Sales are exclusive of sales tax & excise.

Company makes export sales by using custom paid material against which Company is entitled to import custom free raw material/duty exemption pass book (DEPB). The estimated amount of eligible custom duty is treated as receivables/ actual amount of DEPB is accounted for in the statement of affairs and accordingly cost of raw material is reduced.

5. Fixed Assets:

Fixed assets are stated at cost except Plant & Machinery shifted from erstwhile Sahibabad which were revalued on 30.6.92 and the assets of erstwhile Conwel Cans India Ltd. which has been taken on fair market value as per the approved valuers report.

6. Depreciation:

Depreciation is provided on straight line method (except in respect of assets belonging to Registered Office Depreciation on which has been provided at Written Down Value) and at the rates and in the manner specified in the Schedule XIV of the Companies Act, 1956, (net of cenvat as applicable.) Depreciation on additions to assets or on sale/discardment of assets is calculated pro rata from the month of such addition or up to the month of such sale/discardment, as the case may be;

7. Inventories:

Inventories are valued at cost or net realizable value whichever is lower. The bases of valuation are as follows:-

Raw material, stores & spares : At Cost or Net realisable value which ever is lower.

Work-in-process : At raw material cost plus Process cost.

Finished goods : At selling price less 10% as per previous practice.

Accounting of Raw Material consumption is net of CENVAT & VAT credit. Claims & refunds, if any, shall be accounted for in the year of determination.

8. Foreign Currency Transactions:

(i) Transactions in foreign currency are recorded at the exchange rate prevailing on the date of transaction. Current monetary Assets and Liabilities denominated in foreign currency are translated at the exchange rate prevailing at the date of balance sheet and gains or losses on translation are recognized in profit and Loss Account.

(ii) In respect of forward exchange contacts assigned to foreign currency Assets / Liabilities, the difference due to change in exchange rate between the inception of forward contact and date of the balance sheet and proportionate premium / discount for the period up to the date of balance sheet is recognized in the profit loss Account. Any profit or loss arising on settlement / cancellation of forward contact is recognized as income or expense for the year in which they arise.

9. A provision is recognized when the Company has a present obligation as a result of past event and 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 financial statements, are not discounted to their present value and are determined based on best estimate required to settle the obligation at each Balance Sheet date and are adjusted to reflect the current best estimates

10. Investment

The Company has made long term investments which are stated at cost. Provision for diminishing in value of the long term investment is made only if such a decline is other than temporary in the opinion of the management.

11. Impairment of Assets

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

12. Borrowing costs

Borrowing costs includes interest cost and all ancillary costs incurred in connection with the arrangement of borrowings. Borrowing cost is considered as expenditure in the period and charge of to Profit and Loss Account.

 
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