Accounting Policies of JJ Exporters Ltd. Company

Mar 31, 2015

A) Historical conventions and revenue recognition

i) Financial statements are drawn using the historical cost convention and adopting accrual basis save & except realization on account of samples which are accounted for on settlement/receipt basis in view of uncertainty of realization.

ii) Export sales have been booked on FOB basis on the date of shipment.

iii) Sale of import/export entitlements received by way of SIL/QUOTA licenses has been booked as on the date of sale, thereof. However, Duty Draw Back and DEPB Entitlement are accounted for on accrual basis on eligible amount of exports made and entitlement of Target-Plus Scheme has been accounted on utilization basis as per the scheme. Focus Product Credit is booked on the basis of licenses received.

b) Fixed assets and capital expenditure :

i) Fixed assets are stated at cost which includes installation & other expenditures. Such expenditure comprises purchase price, import duties, levies and any directly attributable cost of bringing the assets to their working conditions.

ii) Capitalisation of Construction Period Expenses:

Direct expenses as well as clearly identifiable indirect expenses incurred during construction period have been capitalised directly with respective assets. Finance cost and other allocable expenses incurred during the construction period of the project have been capitalised, proportionately.

c) Depreciation:

Depreciation is provided on Written Down Value Method as per Schedule II of the Companies Act, 2013, save and except for units J.J.Spectrum Silk and J.J. Exporter Limited- DTA Unit where depreciation has been provided on Straight Line Method as per Schedule II of the Companies Act, 2013. Leasehold land is being depreciated over the period of lease, wherever applicable. Increase/decrease in value of assets arising out of exchange rates fluctuation is charged over the remaining useful life of the assets upto the year 31st March, 2007 and later on, it has been charged to the Statement of Profit and Loss in accordance with the Accounting Standard 11, "The Effects of Changes in Foreign Exchange Rates".

d) Valuation of Inventory:

i) Stock of finished/semi-finished goods has been valued at weighted average cost representing costs which has been incurred in bringing the inventory to their present conditions or net realisable value whichever is lower except for damaged and rejected goods which has been valued at estimated realisable value as per continuous practice followed by the company.

ii) Raw Materials & Stores have been valued at weighted average cost or net realisable value whichever is lower.

e) Investments:

Non-current investments are stated at cost. Provisions are being made for diminution in value other than temporary in nature. Current investments category wise are valued at cost or market price, whichever is lower.

f) Foreign Currency transactions:

i) All foreign currency income and expenses are generally recorded at the exchange rate prevailing on the date of transactions/ negotiations with the company's banker, save & except where forward contract has been booked which is being recorded at relevant rate. Premium on forward contract is being accounted for during the life of contract.

ii) Foreign currency retained out of export proceeds in Exchange Earner's Foreign Currency Account with banker has been converted at bank advice rate applied for the relevant export bills except in case of collection bills wherein the same has been converted at spot rate prevailing on the date of realization of the bills.

iii) Commission to foreign agents is converted at exchange rates prevailing at the time of accounting such liability in company's books.

iv) The company has approved policy of hedging. Accordingly, derivative contracts are entered into to hedge highly probable sales transactions or firm commitments. As per accounting policies adopted by the company, the gain or loss on settlement of the hedge contract is adjusted in sale/purchase as the case may be in the period in which transaction is accounted for.

v) Current Assets and Liabilities in foreign currencies are converted at exchange rates prevailing at the year end, except in case of Forward contract booked by the company against these Assets/ Liabilities, which have been converted at the contracted rates.

g) Employee benefits:

i) Short-term employee benefits including Leave Encashment are recognised as an expense at the undiscounted amount in the Statement of Profit & Loss of the year in which the related service is rendered.

ii) Post-Employment Benefits and other Long Term Employee Benefits include:

Defined Contribution Plans:

Company's contribution to Provident Fund and Employee State Insurance Fund are determined under the relevant Schemes and/or Statute and charged to the Statement of Profit & Loss.

Defined Benefit Plans:

Company's liability towards gratuity is actuarially determined at each Balance Sheet date using the Projected Unit Credit Method. Actuarial gains and losses are recognised in Statement of Profit & Loss. The contribution towards Gratuity is funded with LIC.

h) Taxation :

Income Tax expense comprises current tax and deferred tax charge or credit. Deferred Tax Asset or Liability is recognised using substantively enacted tax rates. Deferred Tax Assets/ Liabilities are reviewed as at each Balance Sheet date based on developments during the year and to reassess realization/liabilities.

i) Impairment of assets :

Impairment of assets are assessed at balance sheet date and if any indicator of impairment exist, the same is assessed and provided for.

j) Provisions for contingent liabilities & contingent assets :

Provisions are recognised in respect of present obligations arising out of past events where there are reliable estimate of probable outflows of resources. Contingent liabilities are the possible obligation of the past events, the existence of which will be confirmed only by the occurrence or non-occurrence of a future event. These are not provided for and are disclosed by way of notes to the accounts. Contingent assets are neither provided for nor disclosed.

k) Government Grants :

State Capital Investment Subsidy has been credited to Capital Reserve Account on receipt basis.

l) Borrowing Costs :

Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying assets are capitalised as part of cost until the asset is ready for its intended use. A qualifying asset is an asset that necessarily require substantial period of time to get ready for its intended use or sale. After that, the borrowing costs are recognised as an expense in the period in which they are incurred and it includes exchange difference arising from foreign currency borrowings to the extent that they are regarded as an adjustment to borrowing costs.

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Mar 31, 2014

A) Historical conventions and revenue recognition

i) Financial statements are drawn using the historical cost convention and adopting accrual basis, save & except realisation on account of samples which are accounted for on settlement/ receipt basis in view of uncertainty of realisation.

ii) Export sales have been booked on FOB basis on the date of shipment.

iii) Sale of import/export entitlements received by way of SIL/QUOTA licenses has been booked as on the date of sale, thereof. However, Duty Draw Back and DEPB Entitlement are accounted for on accrual basis on eligible amount of exports made and entitlement of Target-Plus Scheme has been accounted on utilisation basis as per the scheme. Focus Product Credit is booked on the basis of licences received.

b) Fixed assets and capital expenditure :

i) Fixed assets are stated at cost which includes installation & other expenditures. Such expenditure comprises purchase price, import duties, levies and any directly attributable cost of bringing the assets to their working conditions.

ii) Capitalisation of Construction Period Expenses:

Direct expenses as well as clearly identifiable indirect expenses incurred during construction period have been capitalised directly with respective assets. Finance cost and other allocable expenses incurred during the construction period ofthe project have been capitalised, proportionately.

c) Depreciation:

Depreciation for the year has been provided on Written Down Value Method at the rates prescribed in Schedule XIV of the Companies Act, 1956, save and except for units J.J. Spectrum Silk and J.J. Exporter Limited- DTA Unit at Gangarampur where, depreciation has been provided on Straight Line Method at the rates prescribed in Schedule XIV of the Companies Act, 1956. Leasehold Land is being depreciated over the period of lease, wherever applicable. Increase/decrease in value of assets arising out of exchange rates fluctuation is charged over the remaining useful life of the assets upto the year ended 31st March, 2007 and later on it has been charged to the Statement of Profit & Loss in accordance with Accounting Standard 11, "The Effects of Changes in Foreign Exchange Rates", notified in Companies (Accounting Standard) Rules, 2006.

d) Valuation of lnventory:

i) Stock of finished/semi finished goods has been valued at weighted average cost representing costs which has been incurred in bringing the inventory to their present conditions or net realisable value whichever is lower except for damaged and rejected goods which has been valued at estimated realisable value as per continuous practice followed by the company.

ii) Raw Materials & Stores have been valued at weighted average cost or net realisable value whichever is lower.

e) Investments:

Non-current investments are stated at cost. Provisions are being made for diminution in value other than temporary in nature. Current investments categorywise, are valued at cost or market price, whichever is lower.

f) Foreign Currency transactions:

i) All foreign currency income and expenses are generally recorded at the exchange rate prevailing on the date of transactions/ negotiations with the company''s banker, save & except where forward contract has been booked which is being recorded at relevant rate. Premium on forward contract are being accounted for during the life of contract.

ii) Foreign currency retained out of export proceeds in Exchange Earner''s Foreign Currency Account with banker has been converted at bank advice rate applied for the relevant export bills except in case of collection bills wherein the same has been converted at spot rate prevailing on the date of realisation of the bills.

iii) Commission to foreign agents is converted at exchange rates prevailing at the time of accounting such liability in company''s books.

iv) The company has approved policy of hedging. Accordingly, derivative contracts are entered into to hedge highly probable sales transactions or firm commitments. As per accounting policies adopted by the company, the gain or loss on settlement of the hedge contract is adjusted in sale/purchase as the case may be in the period in which transaction is accounted for.

v) Current Assets and Liabilities in foreign currencies are converted at exchange rates prevailing at the year end, except in case of Forward contract booked by the company against these Assets/ Liabilities, which have been converted at the contracted rates.

g) Employee benefits:

i) Short-term employee benefits including Leave Encashment are recognised as an expense at the undiscounted amount in the Statement of Profit & Loss of the year in which the related service is rendered.

ii) Post Employment Benefits and other Long Term Employee Benefits include:

Defined Contribution Plans:

Company''s contribution to Provident Fund and Employee State Insurance Fund are determined under the relevant Schemes and/or Statute and charged to the Statement of Profit & Loss.

Defined Benefit Plans:

Company''s liability towards gratuity is actuarially determined at each Balance Sheet date using the Projected Unit Credit Method. Actuarial gains and losses are recognised in Statement of Profit & Loss. The contribution towards Gratuity is funded with LIC.

h) Taxation :

Income Tax expense comprises current tax and deferred tax charge or credit. Deferred Tax Asset or Liability is recognised using substantively enacted tax rates. Deferred Tax Assets/ Liabilities are reviewed as at each Balance Sheet date based on developments during the year and to reassess realisation/liabilities.

i) Impairment of assets:

Impairment of assets are assessed at balance sheet date and if any indicators of impairment exist, the same is assessed and provided for.

j) Provisions for contingent liabilities & contingent assets :

Provisions are recognised in respect of present obligations arising out of past events where there are reliable estimate of probable outflows of resources. Contingent liabilities are the possible obligation of the past events, the existence of which will be confirmed only by the occurrence or non-occurrence of a future event. These are not provided for and are disclosed by way of notes to the accounts. Contingent assets are neither provided for nor disclosed.

k) Government Grants :

State Capital Investment Subsidy has been credited to Capital Reserve Account on receipt basis.

l) Borrowing Costs :

Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying assets are capitalised as part of cost until the asset is ready for its intended use. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use or sale. After that, the borrowing costs are recognised as an expense in the period in which they are incurred and it includes exchange difference arising from foreign currency borrowings to the extent that they are regarded as an adjustment to borrowing costs.

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Mar 31, 2013

A) Historical conventions and revenue recognition

i) Financial statements are drawn using the historical cost convention and adopting accrual basis save & except realisation on account of samples which are accounted for on settlement/receipt basis in view of uncertainty of realisations.

ii) Export sales have been booked on FOB basis on the date of shipment.

iii) Sale of import/export entitlements received by way of SIL/QUOTA licenses has been booked as on the date of sale thereof, however Duty Draw Back and DEPB entitlement are accounted for on accrual basis on eligible amount of exports made and entitlement of target plus scheme has been accounted on utilisation basis as per the scheme. Focus product credit is booked as on the basis of licences received.

b) Fixed assets and capital expenditure :

i) Fixed assets are stated at cost which includes installation & other expenditures. Such expenditure comprises purchase price, import duties, levies and any directly attributable cost of bringing the assets to their working conditions.

ii) Capitalisation of construction period expenses:

Direct expenses as well as clearly identifiable indirect expenses incurred during construction period have been capitalised directly with respective assets. Financing cost and other allocable expenses during the construction period of the project have been capitalised proportionately.

c) Depreciation:

Depreciation for the year has been provided on written down value method at the rate prescribed in Schedule XIV of the Companies Act, 1956 save and except for unit J.J.Spectrum Silk where depreciation has been provided on straight line method at the rates prescribed in Schedule XIV of the Companies Act, 1956. Leasehold land is being depreciated over the period of lease, wherever applicable Increase/decrease in value of assets arising out of exchange rates fluctuation is charged over the remaining useful life of the assets upto the year 31st March 2007 and later on it has been charged to the statement of profit and loss in accordance with the Accounting Standard 11, notified in Companies (Accounting Standard) Rules, 2006.

d) Valuation of Inventory:

i) Stock of finished/semi finished goods has been valued at weighted average cost representing costs which has been incurred in bringing the inventory to their present conditions or net realisable value whichever is lower except for damaged and rejected goods which has been valued at estimated realisable value as per continuous practice followed by the company.

ii) Raw Materials & Stores have been valued at weighted average cost or net realisable value whichever is lower.

e) Investments:

Non-current investments are stated at cost. Provisions are being made for diminution in value other than temporary in nature. Current investments categorywise are valued at cost or market price whichever is lower.

f) Foreign Currency transactions:

i) All foreign currency income and expenses are generally recorded at the exchange rate prevailing on the date of transactions/negotiations with the company''s banker save & except where forward contract has been booked which is being recorded at relevant rate. Premium on forward contract are being accounted for during the life of contract.

ii) Foreign currency retained out of export proceeds in Exchange Earners Foreign Currency Account with banker has been converted at bank advice rate applied for the relevant export bills except in case of collection bills wherein the same has been converted at spot rate prevailing on the date of realisation of the bills.

iii) Commission to foreign agents is converted at exchange rates prevailing at the time of accounting such liability in company''s books.

iv) The company has approved policy of hedging, accordingly derivative contracts are entered into to hedge highly probable sales transactions or firm commitments. As per accounting policies adopted by the company the gain or loss on settlement of the hedge contract is adjusted in sale/purchase as the case may be in the period in which transaction is accounted for.

v) Current Assets and Liabilities in foreign currencies are converted at exchange rates prevailing at the year end except in case were forward contract has been booked by the company against these assets / liabilities were in the same is converted at contracted rates.

g) Employee benefits:

i) Short-term employee benefits including Leave Encashment are recognised as an expense at the undiscounted amount in the statement of profit and loss of the year in which the related service is rendered.

ii) Post Employment benefits and other long term employee benefits

h) Defined Contribution Plans:

Company''s contribution to Provident Fund and Employee State Insurance Fund are determined under the relevant Schemes and/or statute and charged to statement of profit and loss.

Defined Benefit Plans:

Company''s liability towards gratuity is actuarially determined at each balance sheet date using the Projected Unit Credit Method. Actuarial gains and losses are recognised in statement of profit & loss. The contribution towards Gratuity is funded with LIC.

i) Taxation:

Income Tax expense comprises current tax and deferred tax charge or credit. Deferred tax asset or liability is recognised using substantively enacted tax rates. Deferred tax assets/liabilities are reviewed as at each Balance Sheet date based on developments during the year and to reassess realisation/liabilities.

j) Impairment of assets :

Impairment of assets are assessed at balance sheet date and if any indicators of impairment exist, the same is assessed and provided for.

k) Provisions for contingent liabilities & contingent assets :

Provisions are recognised in respect of present obligations arising out of past events where there are reliable estimate of probable outflows of resources. Contingent liabilities are the possible obligation of the past events, the existence of which will be confirmed only by the occurrence or non-occurrence of a future event. These are not provided for and are disclosed by way of notes to the accounts. Contingent assets are not provided for or disclosed.

I) Government Grants :

State capital investment subsidy has been credited to capital reserve account on receipt basis.

m) Borrowing Costs :

Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying assets are capitalised as part of cost until the asset is ready for its intended use. A qualifying asset is an asset that necessarily require a substantial period of time to get ready for its intended use. After that the borrowing costs are recognised as an expense in the period in which they are incurred including exchange difference arising from foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs.

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Mar 31, 2012

A) Historical conventions and revenue recognition

i) Financial statements are drawn using the historical cost convention and adopting accrual basis save & except realization on account of samples which are accounted for on settlement/receipt basis in view of uncertainty of realizations.

ii) Export sales have been booked on FOB basis on the date of shipment.

iii) Sale of import/export entitlements received by way of SIL/QUOTA licenses has been booked as on the date of sale thereof, however Duty Draw Back and DEPB entitlement are accounted for on accrual basis on eligible amount of exports made and entitlement of target plus scheme has been accounted on utilization basis as per the scheme. Focus product credit is booked as on the basis of licenses received.

b) Fixed assets and capital expenditure :

a) Fixed assets are stated at cost which includes installation & other expenditures. Such expenditure comprises purchase price, import duties, levies and any directly attributable cost of bringing the assets to their working conditions.

b) Capitalization of construction period expenses:

Direct expenses as well as clearly identifiable indirect expenses incurred during construction period have been capitalized directly with respective assets. Financing Cost and other allocable expenses during the construction period of the project have been capitalized proportionately.

c) Depreciation:

Depreciation for the year has been provided on written down value method at the rate prescribed in Schedule XIV of the Companies Act, 1956 save and except for unit J.J. Spectrum Silk where depreciation has been provided on straight line method at the rates prescribed in schedule XIV of the Companies Act, 1956. Leasehold land is being depreciated over the period of lease, wherever applicable. Increase/decrease in value of assets arising out of exchange rates fluctuation is charged over the remaining useful life of the assets upto the year 31st March 2007 and later on it has been charged to the profit and loss account in accordance with the Accounting Standard 11, notified in Companies (Accounting Standard ) Rules, 2006.

d) Valuation of Inventory:

i) Stock of finished /semi finished goods has been valued at weighted average cost representing costs which has been incurred in bringing the inventory to their present conditions or net realizable value whichever is lower except for damaged and rejected goods which has been valued at estimated realizable value as per continuous practice followed by the company.

ii) Raw Materials & Stores have been valued at weighted average cost or net realizable value whichever is lower.

e) Investments:

Non-current investments are stated at cost. Provisions are being made for diminution in value other than temporary in nature. Current investments categorywise are valued at cost or market price whichever is lower.

f) Foreign Currency transactions:

i) All foreign currency income and expenses are generally recorded at the exchange rate prevailing on the date of transactions/ negotiations with the company's banker, save & except where forward contract has been booked which is being recorded at relevant rate. Premium on forward contract are being accounted for during the life of contract.

ii) Current Assets and Liabilities in foreign currencies are converted at exchange rates prevailing at the yearend except in case were forward contract has been booked by the company against these assets / liabilities were in the same is converted at contracted rates.

iii) Foreign currency retained out of export proceeds in Exchange Earners Foreign Currency Account with banker has been converted at bank advice rate applied for the relevant export bills except in case of collection bills wherein the same has converted at spot rate prevailing on the date of realization of the bills.

iv) Commission to foreign agents is converted at exchange rates prevailing at the time of accounting such liability in company's books.

v) The company has approved policy of hedging, accordingly derivative contracts are entered into to hedge highly probable sales transactions or firm commitments. As per accounting policies adopted by the company the gain or loss on settlement of the hedge contract is adjusted in sale/purchase as the case may be in the period in which transaction is accounted for.

g) Employee benefits:

i) Short-term employee benefits including Leave Encashment are recognized as an expense at the undiscounted amount in the profit and loss account of the year in which the related service is rendered.

ii) Post Employment benefits and other long term employee benefits Defined Contribution Plans:

Company's contribution to Provident Fund and Employee State Insurance Fund are determined under the relevant Schemes and/or statute and charged to profit and loss account.

Defined Benefit Plans:

Company's liability towards gratuity is actuarially determined at each balance sheet date using the Projected Unit Credit Method. Actuarial gains and losses are recognized in profit & loss account. The contribution towards Gratuity is funded with LIC.

h) Taxation :

Income Tax expense comprises current tax and deferred tax charge or credit. Deferred tax asset or liability is recognized using substantively enacted tax rates. Deferred tax assets/liabilities are reviewed as at each Balance Sheet date based on developments during the year and to reassess realization/liabilities.

i) Impairment of assets :

Impairment of assets are assessed at balance sheet date and if any indicators of impairment exist, the same is assessed and provided for.

j) Provisions for contingent liabilities & contingent assets :

Provisions are recognized in respect of present obligations arising out of past events where there are reliable estimate of probable outflows of resources. Contingent liabilities are the possible obligation of the past events, the existence of which will be confirmed only by the occurrence or non-occurrence of a future event. These are not provided for and are disclosed by way of notes to the accounts. Contingent assets are not provided for or disclosed.

k) Government Grants :

State capital investment subsidy has been credited to capital reserve account on receipt basis, in accordance with Accounting Standard 12.

I) Borrowing Costs :

Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying assets are capitalized as part of cost until the asset is ready for its intended use. A qualifying asset is an asset that necessarily require a substantial period of time to get ready for its intended use. After that the borrowing costs are recognized as an expense in the period in which they are incurred including exchange difference arising from foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs.

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Mar 31, 2010

A) Historical Conventions and Revenue Recognition

i) Financial Statements are drawn using the historical cost convention and adopting accrual basis save and except claims realization on A/c of samples which are accounted for on settlement/receipt basis in view of uncertainty of realizations.

ii) Export Sales have been booked on FOB basis on the date of shipment.

iii) Sale of import/export entitlements received by way of SIL/QUOTA Licenses has been booked as on the date of sale thereof, however Duty Draw Backand DEPB entitlements are accounted for on accrual basis on eligible amount of exports made and entitlement of target plus scheme is accounted for on utilization basis as per the scheme.

b) Fixed Assets and Capital Expenditure

a) Fixed Assets are stated at cost which includes installation and other expenditures. Such expenditure comprises purchase price, import duties, levies and any directly attributable cost of bringing the assets to their working conditions.

b) Capitalisation of Construction Period expenses :

Direct Expenses as well as clearly identifiable indirect expenses incurred during construction period have been capitalised directly with respective assets, financing cost and other allocable expenses during the construction period of project have been capitalised proportionately.

c) Depreciation

Depreciation for the year has been provided on written down value method at the rate prescribed in Schedule XIV of the Companies Act, save and expect for unit J. J. Spectrum Silk and Kol EOU where depreciation has been provided on straight line method at the rates prescribed in Schedule XIV of the Companies Act. Leasehold Land is being depreciated over the period of lease, wherever applicable. Increase/Decrease in value of assets arising out of exchange rates fluctuation is charged over the remaining useful life of the assets upto the year 31st March, 2007 and later on it has been charged to the Profit & Loss Account in accordance with the Accounting Standard 11, notified in Companies (Accounting Standard) Rules, 2006.

d) Valuation of Inventory

i) Stock of finished/semi finished goods has been valued at weighted average cost representing costs which has been incurred in bringing the inventory to their present conditions or net realisable value whichever is lower except for damaged and rejected goods which has been valued at estimated realisable value as per continuous practice followed by the Company.

ii) Raw Materials and Stores have been valued at weighted average cost or net realisable value whichever is lower.

e) Investments

Long Term Investments are stated at cost. Provision is being made for diminution in value other than temporary in nature. Short Term Investments are valued category wise at cost or market price whichever is lower.

f) Foreign Currency Transactions

i) All foreign currency income and expenses are generally recorded at the exchange rate prevailing on the date of transactions/negotiation with the Companys banker save and except where forward contract has been booked which is being recorded at relevant rate. Premium on forward contract is being accounted for during the life of contract.

ii) Current Assets and Liabilities in Foreign Currencies have been converted at exchange rates prevailing at the year end except in case where forward contract has been booked by the Company against these assets/liabilities wherein the same has been converted at contracted rates.

iii) Foreign Currency retained out of export proceeds in Exchange Earners Foreign Currency Account with banker has been converted at bank advice rate applied for the relevant export bills except in case of collection bills wherein the same has been converted at spot rate prevailing on the date of realisation of the bills.

iv) Commission to foreign agents is converted at exchange rates prevailing at the time of accounting such liability in Companys books.

v) The Company has approved policy of hedging. Accordingly, derivative contracts are entered into to hedge highly probable sales transactions or firm commitments. As per accounting policies adopted by the Company, the gain or loss on settlement of the hedge contract is adjusted in sale/purchase as the case may be in the period in which transaction is accounted for.

g) Employee Benefits

i) Short-term employee benefits including Leave Encashment are recognised as an expense at the undiscounted amount in the Profit & Loss Account of the year in which the related service is rendered.

ii) Post Employment benefits and other long term employee benefits.

"Defined Contribution Plans - Companys contribution to Provident Fund and Employee State Insurance Scheme are determined under the relevant schemes and/or statute and charged to revenue.

Defined Benefit Plans - Companys liability towards Gratuity is actuarially determined at each Balance Sheet date using the Projected Unit Credit Method. Actuarial gains and losses are recognised in revenue. The contribution towards Gratuity is funded with LIC."

h) Taxation

Income Tax expense comprises current tax and deferred tax charge or credit. Deferred Tax Asset or Liability is recognised using substantively enacted tax rates. Deferred Tax Assets/Liabilities are reviewed as at each balance sheet date based on developments during the year and to reassess realisation/liabilities.

i) Impairment of Assets

Impairment of Assets are assessed at Balance Sheet date and if any indicators of impairment exist, the same is assessed and provided for.

j) Provisions for Contingent Liabilities & Contingent Assets

Provisions are recognised in respect of present obligations arising out of past events where there are reliable estimate of probable outflows of resources. Contingent Liabilities are the possible obligation of the past events, the existence of which will be confirmed only by the occurrence or non-occurrence of a future event. These are not provided for and are disclosed by way of notes on Accounts. Contingent Assets are not provided for or disclosed.

k) Government Grants

State Capital Investment Subsidy has been credited to capital reserve account on receipt basis, in accordance with Accounting Standard 12.

l) Borrowing Costs

Borrowing Costs that are directly attributable to the acquisition, construction or production of qualifying assets are capitalised as part of cost until the asset is ready for its intended use. A qualifying asset is an asset that necessary require a substantial period of time to get ready for its intended use. After that the borrowing costs are recognised as an expense in the period in which they are incurred.