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Accounting Policies of KG Petrochem Ltd. Company

Mar 31, 2015

OVERVIEW

The Company was originally incorporated on 29.2.1980 under Companies Act, 1956 as KG Petrochem Private Limited .The name

of the company changed to KG Petrochem Limited as per fresh Certificate of Incorporation dated 24.8.1995 issued by Registrar of Companies, Rajasthan, Jaipur.

Presently the Company is engaged in the business of manufacturing and services as under-

(I) Textile Division:-Manufacturing and marketing of terry towels, made-ups etc. in the domestic and inter-national market.

(ii) Agency Division :Consignment Stockiest of GAIL (India) Ltd. for marketing and distribution of polymers in Rajasthan and

(iii) Garment Division: Manufacturing & marketing of readymade garment like bathrobes, babyhood towels, pillows etc.

1.1 System of Accounting and use of estimates

The Company follows the mercantile system of accounting by following accrual concept in the preparation of accounts. The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known/materialized.

1.2 Valuation of Inventories (AS-2)

(I) Raw materials, components, stores and spares are valued at lower of cost and net realizable value. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. Cost of raw materials, components, stores and spares is determined on FIFO basis.

(ii) Work-in-progress and finished goods are valued at lower of cost and net realizable value. Cost includes direct materials and

labour and a portion of manufacturing overheads based on normal operating capacity.

(iii) Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.

1.3 Cash Flow Statement (AS-3)

Cash flows are reported using the indirect method as prescribed in Accounting Standard 3 'Cash Flow Statement', where by net profit before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expense associated with investing or financial cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.

1.4 Depreciation (AS-6)

Depreciation on fixed assets is provided for on straight line method in accordance with the provisions of Schedule II of the Companies Act, 2013. Depreciation on additions/disposals during the year is provided on pro-rata basis. Individual asset costing less than Rs 5000/- has been fully depreciated in the year of purchase.

1.5 Revenue Recognition (AS-9)

Turnover are inclusive of excise duty and other related realization but exclusive of Value Added Tax charged. Export sale has been recognized at the time of removal of goods from factory at invoice value (whether FOB or CIF) on the basis of exchange rates declared by Custom Department for that particular month.

Duty Drawback Scheme are accounted for in the year of export at FOB value. Import License under DEPB Scheme and Focus Product Scheme are accounted for at net realizable value on accrual basis.

1.6 Fixed Assets (AS-10)

Value of Gross Block of fixed assets represent cost of acquisition, including non-refundable taxes & duties, expenditure on installations, attributable borrowing cost and other identifiable direct expenses incurred up to the date of commencement of commercial use of the assets. *

1.7 Foreign Currency Transaction (AS-11)

(I) Transactions denominated in foreign currency are normally recorded at the exchange rate prevailing at the time of transaction. (ii) Monetary items denominated in foreign currency at the year end and not covered by forward exchange contracts are translated at the year end rates and those covered by forward contracts are translated at the rate ruling at the date of transaction as increased or decreased by the proportionate difference between the forward rate and exchange rate on the date of transaction such difference having been recognized over the life of the contract. Foreign exchange financial instruments in hand at the yearend are valued mark to market. Any income or expenses on account of exchange difference either on settlement or on i translation is recognized in the Statement of Profit & Loss.

1.8 Government Grants (AS-12)

In case of depreciable assets, the cost of asset is shown at gross value and grant thereon is treated as Capital Grants which are withdrew over the period and in the proportion in which depreciation is charged.

1.9 Employee retirement benefits (AS-15) (i) Short - term Employee Benefits:-

All employee benefits payable wholly within twelve months of rendering the service are classified as short-term employee benefits and they are recognized in the period in which the employee renders the related services The Company recognizes the undiscounted amount of short term employee benefits expected to be paid in exchange for services rendered as a liability after deducting any amount already paid.

(ii) Post-employment Benefits:-

(a) Defined Contribution Plan: Contribution to superannuation fund is recognized as an expense in the Statement of Profit & Loss as it is incurred. There are no other obligations other than the contribution payable to the respective trusts.

(b) Defined Benefit Plan and Other Long Term Benefits: Retirement benefits in the form of gratuity, provident fund, post retirement medical benefit schemes and other long term benefits in the form of leave encashment, silver jubilee and long service award are determined on the basis of an actuarial valuation using the projected unit credit method as at Balance Sheet date. Actuarial gains/losses are recognized immediately in the Statement of Profit & Loss.

1.10 Borrowing Cost (AS-16)

Borrowing cost that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying assets is one that takes necessarily substantial period of time to get ready for its intended use. All other borrowing cost are charged to revenue.

1.11 Earnings Per Share (AS-20)

Earnings per equity share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting attributable taxes) by the weighted average number of equity shares outstanding during the period. Diluted earnings per equity share have been computed using the weighted average number of equity shares and dilutive potential equity shares outstanding at the year end.

1.12 Taxes on Income (AS-22)

Current tax is determined as the amount of tax payable to the Taxation Authorities in respect of taxable income for the year.

Deferred tax is recognized, subject to consideration of prudence, in respect of deferred tax assets, on timing differences being difference between taxable income and accounting income that originate in one year and are capable of reversal in one or more subsequent years.

In respect of unabsorbed depreciation / carry forward of losses under the tax laws, deferred tax assets are recognized only to the extent that there is virtual certainty that future taxable income will be available against which such deferred tax assets can be realized.

Credit in respect of Minimum Alternative Tax under Income Tax Act 1961 (MATCredit- Entitlement) is recognized in accordance with guidance note issued by the Council of the Institute of Chartered Accountants of India

1.13 Intangible Assets (AS-26)

Intangible assets are stated at cost less accumulated amount of amortization.

1.14 Impairment of assets (AS-28)

If the carrying amount of fixed assets exceeds the recoverable amount on the reporting date, the carrying amount is reduced to the recoverable amount. The recoverable amount is measured as the higher of the net selling price and the value in use determined by the present value of future cash flows.

1.15 Provisions, Contingent Liabilities and Contingent Assets (AS-29)

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but disclosed in the notes. Contingent assets is neither recognized nor disclosed in the financial statement. '

1.16 Except where stated, accounting policies are consistent with the generally accepted accounting principles and have been consistently applied.


Mar 31, 2014

1.1 System of Accounting and use of estimates

The Company follows the mercantile system of accounting by following accrual concept in the preparation of accounts. The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known/materialized.

1.2 Valuation of Inventories (AS-2)

(i) Raw materials, components, stores and spares are valued at lower of cost and net realisable value. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. Cost of raw materials, components, stores and spares is determined on FIFO basis.

(ii) Work-in-progress and finished goods are valued at lower of cost and net realisable value. Cost includes direct materials and labour and a portion of manufacturing overheads based on normal operating capacity.

(iii) Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.

1.3 Cash Flow Statement (AS-3)

Cash flows are reported using the indirect method as prescribed in Accounting Standard 3 ''Cash Flow Statement'', where by net profit before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expense associated with investing or financial cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.

1.4 Depreciation (AS-6)

Depreciation on fixed assets is provided for on straight line method in accordance with the provisions of Section 205(2) (b) of the Companies Act, 1956. Depreciation on additions/disposals during the year is provided on pro-rata basis.

Individual asset costing less than Rs 5000/- has been fully depreciated in the year of purchase.

1.5 Revenue Recognition (AS-9)

Turnover are inclusive of excise duty and other related realisation but exclusive of Value Added Tax charged. Export sale has been recognised at the time of removal of goods from factory at invoice value (whether FOB or CIF) on the basis of exchange rates declared by Custom Department for that particular month.

Duty Drawback Scheme are accounted for in the year of export at FOB value.

Import Licence under DEPB Scheme and Focus Product Scheme are accounted for at net realisable value on accrual basis.

1.6 Fixed Assets (AS-10)

Value of Gross Block of fixed assets represent cost of acquisition, including non-refundable taxes & duties, expenditure on installations, attributable borrowing cost and other identifiable direct expenses incurred upto the date of commencement of commercial use of the assets.

1.7 Foreign Currency Transaction (AS-11)

(i) Transactions denominated in foreign currency are normally recorded at the exchange rate prevalling at the time of transaction.

(ii) Monetary items denominated in foreign currency at the year end and not covered by forward exchange contracts are translated at the year end rates and those covered by forward contracts are translated at the rate ruling at the date of transaction as increased or decreased by the proportionate difference between the forward rate and exchange rate on the date of transaction such difference having been recongnised over the life of the contract. Foreign exchange financial instruments in hand at the year end are valued mark to market.

Any income or expenses on account of exchange difference either on settlement or on translation is recongnised in the Statement of Profit & Loss.

1.8 Government Grants (AS-12)

In case of depreciable assets, the cost of asset is shown at gross value and grant thereon is treated as Capital Grants which are withdrew over the period and in the proportion in which depreciation is charged.

1.9 Employee retirement benefits (AS-15)

(i) Short - term Employee Benefits:-

All employee benefits payable wholly within twelve months of rendering the service are classified as short-term employee benefits and they are recognised in the period in which the employee renders the related services

The Company recognises the undiscounted amount of short term employee benefits expected to be paid in exchange for services rendered as a liability after deducting any amount already paid.

(ii) Post-employment Benefits:-

(a) Defined Contribution Plan: Contribution to superannuation fund is recognised as an expense in the Statement of Profit & Loss as it is incurred. There are no other obligations other than the contribution payable to the respective trusts.

(b) Defined Benefit Plan and Other Long Term Benefits: Retirement benefits in the form of gratuity, provident fund, post retirement medical benefit schemes and other long term benefits in the form of leave encashment, silver jubilee and long service award are determined on the basis of an actuarial valuation using the projected unit credit method as at Balance Sheet date. Actuarial gains/losses are recognised immediately in the Statement of Profit & Loss.

1.10 Borrowing Cost (AS-16)

Borrowing cost that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying assets is one that takes necessarily substantial period of time to get ready for its intended use. All other borrowing cost are charged to revenue.

1.11 Earning Per Share (AS-20)

Earnings per equity share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting attributable taxes) by the weighted average number of equity shares outstanding during the period. Diluted earnings per equity share have been computed using the weighted average number of equity shares and dilutive potential equity shares outstanding at the year end.

1.12 Taxes on Income (AS-22)

Current tax is determined as the amount of tax payable to the Taxation Authorities in respect of taxable income for the year. Deferred tax is recognized, subject to consideration of prudence, in respect of deferred tax assets, on timing differences being difference between taxable income and accounting income that originate in one year and are capable of reversal in one or more subsequent years.

In respect of unabsorbed depreciation / carry forward of losses under the tax laws, deferred tax assets are recognized only to the extent that there is virtual certainty that future taxable income will be available against which such deferred tax assets can be realized.

Credit in respect of Minimum Alternative Tax under Income Tax Act 1961 (MAT Credit - Entitlement) is recognized in accordance with guidance note issued by the Council of the Institute of Chartered Accountants of India.

1.13 Impairment of assets (AS-28)

If the carrying amount of fixed assets exceeds the recoverable amount on the reporting date, the carrying amount is reduced to the recoverable amount. The recoverable amount is measured as the higher of the net selling price and the value in use determined by the present value of future cash flows.

1.14 Provisions, Contingent Liabilities and Contingent Assets (AS-29)

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognised but disclosed in the notes.

1.15 Except where stated, accounting policies are consistent with the generally accepted accounting principles and have been consistently applied.


Mar 31, 2013

1.1 System of Accounting and use of estimates

The Company follows the mercantile system of accounting by following accrual concept in the preparation of accounts. The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known/materialized.

1.2 Valuation of Inventories (AS-2)

(i) Raw materials, components, stores and spares are valued at lower of cost and net realisable value. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. Cost of raw materials, components, stores and spares is determined on FIFO basis.

(ii) Work-in-progress and finished goods are valued at lower of cost and net realisable value. Cost includes direct materials and labour and a portion of manufacturing overheads based on normal operating capacity. (iii) Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.

1.3 Cash Flow Statement (AS-3)

Cash flows are reported using the indirect method as prescribed in Accounting Standard 3 ''Cash Flow Statement'', where by net profit before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expense associated with investing or financial cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.

1.4 Depreciation (AS-6)

Depreciation on fixed assets is provided for on straight line method in accordance with the provisions of Section 205(2) (b) of the Companies Act, 1956. Depreciation on additions/disposals during the year is provided on pro-rata basis.

Individual asset costing less than Rs 5000/- has been fully depreciated in the year of purchase.

1.5 Revenue Recognition (AS-9)

Turnover are inclusive of excise duty and other related realisation but exclusive of Value Added Tax charged. Export sale has been recognised at the time of removal of goods from factory at invoice value (whether FOB or CIF) on the basis of exchange rates declared by Custom Department for that particular month.

"Duty Drawback Scheme are accounted for in the year of export at FOB value. Import Licence under DEPB Scheme and Focus Product Scheme are accounted for at net realisable value on accrual basis."

1.6 Fixed Assets (AS-10)

Value of Gross Block of fixed assets represent cost of acquisition, including non-refundable taxes & duties, expenditure on installations, attributable borrowing cost and other identifiable direct expenses incurred upto the date of commencement of commercial use of the assets.

1.7 Foreign Currency Transaction (AS-11)

"(I) Transactions denominated in foreign currency are normally recorded at the exchange rate prevailing at the time of transaction, (ii) Monetary items denominated in foreign currency at the year end and not covered by forward exchange contracts are translated at the year end rates and those covered by forward contracts are translated at the rate ruling at the date of transaction as increased or decreased by the proportionate difference between the forward rate and exchange rate on the date of transaction such difference having been recongnised over the life of the contract. Foreign exchange financial instruments in hand at the year end are valued mark to market. Any income or expenses on account of exchange difference either on settlement or on translation is recongnised in the Statement of Profits Loss."

1.8 Government Grants (AS-12)

In case of depreciable assets, the cost of asset is shown at gross value and grant thereon is treated as Capital Grants which are withdrew overthe period and in the proportion in which depreciation is charged.

1.9 Employee retirement benefits (AS-15)

(i) Short-term Employee Benefits:-

All employee benefits payable wholly within twelve months of rendering the service are classified as short-term employee benefits and they are recognised in the period in which the employee renders the related services

The Company recognises the undiscounted amount of short term employee benefits expected to be paid in exchange for services rendered as a liability after deducting any amount already paid.

(ii) Post-employment Benefits:-

(a) Defined Contribution Plan: Contribution to superannuation fund is recognised as an expense in the Statement of Profit & Loss as it is incurred. There are no other obligations other than the contribution payable to the respective trusts.

(b) Defined Benefit Plan and Other Long Term Benefits: Retirement benefits in the form of gratuity, provident fund, post retirement medical benefit schemes and other long term benefits in the form of leave encashment, silver jubilee '' and long service award are determined on the basis of an actuarial valuation using the projected unit credit method as at Balance Sheet date. Actuarial gains/losses are recognised immediately in the Statement of Profit & Loss.

1.10 Borrowing Cost (AS-16)

Borrowing cost that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying assets is one that takes necessarily substantial period of time to get ready for its intended use. All other borrowing cost are charged to revenue.

1.11 Earning Per Share (AS-20)

Earnings per equity share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting attributable taxes) by the weighted average number of equity shares outstanding during the period. Diluted earnings per equity share have been computed using the weighted average number of equity shares and dilutive potential equity shares outstanding at the year end.

1.12 Taxes on Income (AS-22)

Current tax is determined as the amount of tax payable to the Taxation Authorities in respect of taxable income for the year.

Deferred tax is recognized, subject to consideration of prudence, in respect of deferred tax assets, on timing differences being difference between taxable income and accounting income that originate in one year and are capable of reversal in one or more subsequent years.

In respect of unabsorbed depreciation / carry forward of losses under the tax laws, deferred tax assets are recognized only to the extent that there is virtual certainty that future taxable income will be available against which such deferred tax assets can be realized.

Credit in respect of Minimum Alternative Tax under Income Tax Act 1961 (MAT Credit - Entitlement) is recognized in accordance with guidance note issued by the Council of the Institute of Chartered Accountants of India

1.13 Impairment of assets (AS-28)

If the carrying amount of fixed assets exceeds the recoverable amount on the reporting date, the carrying amount is reduced to the recoverable amount. The recoverable amount is measured as the higher of the net selling price and the value in use determined by the present value of future cash flows.

1.14 Provisions, Contingent Liabilities and Contingent Assets (AS-29)

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognised but disclosed in the notes.

1.15 Except where stated, accounting policies are consistent with the generally accepted accounting principles and have been consistently applied.


Mar 31, 2012

1.1 System of Accountingand use of estimates.

The Company follows the mercantile system of accounting by following accrual concept in the preparation of accounts. The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known/materialized.

1.2 Valuation of Inventories (AS-2)

Inventories are valued at lower of cost and net realizable value. Cost is measured on first in first out basis.

1.3 Depreciation (AS-6)

Depreciation on fixed assets is provided for on straight line method in accordance with the provisions of Section 205(2) (b) of the Companies Act, 1956. Depreciation on additions/disposals during the year is provided on pro-rata basis. Individual asset costing less than Rs 5000/- has been fully depreciated in the year of purchase.

1.4 Revenue Recognition (AS-9)

Turnover are inclusive of excise duty and other related realisation but exclusive of Value Added Tax charged. Export sale has been recognised at the time of removal of goods from factory at invoice value (whether FOB or CIF) on the basis of exchange rates declared by Custom Department for that particular month.

"Duty Drawback Scheme are accounted for in the year of export at FOB value. Import Licence under DEPB Scheme and Focus Product Scheme are accounted for at net realisable value on accrual basis."

1.5 Fixed Assets (AS-10)

Value of Gross Block of fixed assets represent cost of acquisition, including non-refundable taxes & duties, expenditure on installations, attributable borrowing cost and other identifiable direct expenses incurred upto the date of commencement of commercial use of the assets.

1.6 Foreign Currency Transaction (AS-11)

"(i) Transactions denominated in foreign currency are normally recorded at the exchange rate prevailing at the time of transaction.

(ii) Monetary items denominated in foreign currency at the year end and not covered by forward exchange contracts are translated at the year end rates and those covered by forward contracts are translated at the rate ruling at the date of transaction as increased or decreased by the proportionate diff erance between the forward rate and exchange rate on the date of transaction such difference having been recongnised over the life of the contract. Foreign exchange financial instruments in hand at the year end are valued mark to market. Any income or expenses on account of exchange difference either on settlement or on translation is recongnised in the Statement of Profit & Loss Account.

1.7 Employee retirement benefits (AS-15)

Company's contribution paid / payable during the year towards provident fund scheme and employee state insurance scheme are recognized in the profit & loss account. Leave encashment is accounted for on cash basis.

1.8 Borrowing Cost (AS-16)

Borrowing cost that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying assets is one that takes necessarily substantial period of time to get ready for its intended use. All other borrowing cost are charged to revenue.

1.9 Taxes on Income (AS-22)

Current tax is determined as the amount of tax payable to the Taxation Authorities in respect of taxable income for the year. Deferred tax is recognized, subject to consideration of prudence, in respect of deferred tax assets, on timing differences being difference between taxable income and accounting income that originate in one year and are capable of reversal in one or more subsequent years.

In respect of unabsorbed depreciation / carry forward of losses under the tax laws, deferred tax assets are recognized only to the extent that there is virtual certainty that future taxable income will be available against which such deferred tax assets can be realized.

Credit in respect of Minimum Alternative Tax under Income Tax Act 1961 (MAT Credit - Entitlement) is recognized in accordance with guidance note issued by the Council of the Institute of Chartered Accountants of India.

1.10 Except where stated, accounting policies are consistent with the generally accepted accounting principles and have been consistently applied.


Mar 31, 2010

1) System of Accounting and use of estimates

The Company follows the mercantile system of accounting by following accrual concept in the preparation of accounts. The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of financial statements ands the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are know/materialized.

2) Fixed Assets

Value of Gross Block of fixed assets represent cost of acquisition, including non-refundable taxes & duties, expenditure on installations, attributable pre-operative expenses including borrowing cost and other identifiable direct expenses incurred upto the date of commencement of commercial use of the assets.

3) Depreciation:

Depreciation on fixed assets is provided for on straight line method in accordance with the provisions of section 205(2) (b) of the companies Act, 1956. Depreciation on additions/disposals during the year is provided on pro-rata basis.

4) Valuation of Inventories :

Inventories are valued at lower of cost or net realizable value. Cost is measured on first in first out basis.

5) Turnover

Turnovers are inclusive of excise duty, refund and other related realization but exclusive of value added tax charged. Export sale has been recognized at the time of removal of goods from factory gate at invoice value (whether FOB or CIF) on the basis of exchange rates declared by the Customs department for that particular month.

During the year export sale of Rs.103.32 Lacs (Previous Year Rs.27.28 Lacs) booked on the basis of removal of goods at invoice value however let export order date of the same was after 31 st March 2010.

6) Benefits receivable against export and its obligation

Duty Drawback Scheme are accounted for in the year of export at FOB value

7) Deferred Revenue Expenses

Preliminary Expenses are amortized over a period of 5 years.

8) Foreign Currency Transaction:

(i) Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing at the time of the transaction.

(ii) Monetary items denominated in foreign currency at the year end and not covered by forward exchange contracts are translated at the year end rates and those covered by forward contracts are translated at the rate ruling at the date of transaction as increased or decreased by the proportionate difference between the forward rate and exchange rate on the date of transaction such difference having been recognized over the life of the contract. Foreign exchange financial instruments in hand at the year end are valued mark to market.

Any income or expenses on account of exchange difference either on settlement or on translation is recognized in the profit & loss account.

9) Employee retirement benefits:

Companys contribution paid / payable during the year towards provident fund scheme and employee state insurance scheme are recognized in the profit & loss account. Leave encashment is accounted for on cash basis

10) Taxes on Income

Current tax is determined as the amount of tax payable to the Taxation Authorities in respect of taxable income for the year.

Deferred tax is recognized, subject to consideration of prudence, in respect of deferred tax assets, on timing differences being difference between taxable income and accounting income that originate in one year and are capable of reversal in one or more subsequent years.

In respect of unabsorbed depreciation / carry forward of losses under the tax laws, deferred tax assets are recognized only to the extent that there is virtual certainty that future taxable income will be available against which such deferred tax assets can be realized.

Credit in respect of Minimum Alternative Tax under Income Tax Act 1961 (MAT Credit Entitlement) is recognized in accordance with guidance note issued by the Council of the Institute of Chartered Accountants of India.

11) Borrowing Cost

Borrowing cost that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying assets is one that takes necessarily substantial period of time to get ready for its intended use. All other borrowing cost are charged to revenue.

12) Except where stated, accounting policies are consistent with the generally accepted accounting principles and have been consistently applied.



 
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