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Accounting Policies of Premco Global Ltd. Company

Mar 31, 2015

1. Basis of preparation of Financial Statements

a) These financial statements have been prepared in accordance with the generally accepted accounting principles in India under the historical cost convention on accrual basis. Pursuant to section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rule, 2014, till the standards of accounting or any addendum thereto are prescribed by Central Government in consultation and recommendation of the National Financial Reporting Authority, the existing Accounting Standards notified under the Companies Act, 1956 shall continue to apply. Consequently, these financial statements have been prepared to comply in all material aspect with the Accounting Standards notified under Section 211(3C) of Companies Act, 1956 [ Companies (Accounting Standards ), 2006 as amended ] and other relevant provisions of the Companies Act, 2013.

b) 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 the Schedule III to the Companies Act, 2013. Based on the nature of products and the time between the acquisition of assets for processing and their realization in cash and cash equivalent, the Company has ascertained its operating cycle to be twelve months for the purpose of current - non-current classification of assets and liabilities.

c) Accounting policies not specifically referred to otherwise are consistent with the generally accepted accounting principles followed by the Company.

d) The preparation of financial statements requires estimates and assumption to be made that effect the reported amount of assets and liabilities on the date of financial statements and the reported amount of revenue and expenses during the reporting period. The Difference between the actual and estimate are recognized in the period in which results are known/materialized.

2. Fixed Assets and Depreciation

A) Fixed Assets:

a) Tangible Fixed assets stated at cost of acquisition or construction, less accumulated depreciation. All costs, including borrowing costtill respective assets is put to use, are capitalized.

b) intangible assets are stated at acquisition cost, net of accumulated amortization and accumulated impairment losses, if any.

c) Losses arising from the retirement of and gains & losses arising from disposal of fixed assets which are carried at cost are recognized in the statement of profit & loss.

B) Depreciation:

d) Depreciation has been provided as under:

(i) For assets existing on 1st April 2014 the carrying amount will be amortized over the remaining useful lives on straight line method as prescribed in the schedule II of Companies Act, 2013.

(ii) For the assets added after the 1st April 2014 On straight line method at the useful Lives prescribed in Schedule II to The Companies Act, 2013.

(iii) Leasehold Improvements are written off over the period of lease.

(iv) Intangible assets include Cost of software capitalized is amortized over a period of 3 years.

(v) Depreciation on assets added/ disposed off during the year has been provided on pro-rata basis with reference to the days of addition/ disposal.

3. Foreign Exchange Transaction

Transactions denominated in foreign currencies are recorded at the exchange rate prevailing at the time of the transaction. Monetary assets and liabilities in foreign currency, outstanding at the end of the year are converted into Indian currency at the rate prevailing on the Balance Sheet date. Resulting gain or loss is recognized in statement of profit or loss.

At the reporting date, non-monetary items which are carried in terms of historical cost denominated in foreign currency are reported using the exchange rate at the date of transaction.

Forward Exchange Contracts:

The premium or discount arising at the inception of the forward exchange contracts entered into to hedge an existing assets/ liability, is amortized as expense or income over the life of the contract. Exchange differences on such contracts are recognized in the statement of profit & loss in the reporting period in which the exchange rate changes. Any profit or loss arising on cancellation or renewal of such forward exchange contracts is recognized as income or expense for the period.

Forward exchange contracts outstanding as at the year end on account of firm commitment/ highly probable forecast transaction are marked to market gains & the losses, if any, are recognized in the statement of profit & loss.

4. Investments

Investments that are readily realizable and are intended to be held for not more than one year from the date, on which such investments are made, are classified as current investments. Ail the other investments are classified as long-term investments. Current investments are carried at cost or fair value, whichever is lower. Long-term investments are carried at cost. However, provision for diminution is made to recognize a decline, other than temporary, in the value of investments, such reduction being determined and made for each investment individually.

5. Inventories

Inventories are stated at lower of cost and net realizable value.

Cost of raw materials is determined using FIFO method. However, these items are considered to be realizable at cost if the finished products, in which they will be used, are expected to be sold at or above cost.

The cost of finished goods and Stock-in-process comprises raw materials, direct labour, other direct costs and related production overheads upto the relevant stage of completion.

Waste materials are valued at Net Realizable value.

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

6. Recognition of Income & Expenditure

(i) Revenue / Incomes and Costs / Expenditure are generally accounted on accrual, as they are earned or incurred.

(ii) a) Sale of Goods is recognized on transfer of significant risks and rewards of ownership which is gene rally on the dispatch of goods.

b) Sales of goods are accounted inclusive of taxes, wherever applicable.

(iii) Export incentives underthe"Duty Drawback Scheme" etc. is accounted as income in the year of export.

(iv) Interest Income/ expenditure is recognized on the time proportion basis taking into account of the amount outstanding and the rate applicable.

(v) Dividend income is recognized when the right to received dividend is established.

7. Government Grants & Subsidies

Government grants are recognized when there is a reasonable assurance that the same will be received and ail attaching conditions will be complied with. Revenue grants are recognized in the Statement of Profit and Loss. Capital grants relating to specific tangible / Intangible Assets are reduced from the gross value of the respective Tangible / Intangible Assets. Other capital grants in the nature of promoter's contribution are credited to capital reserve.

8. Customs Duty

Custom Duty is accounted for as and when paid on the clearance of the goods for home Consumption.

9. Employees Retirement and other benefits

a) Provident Fund:

The contribution of the Company on a monthly basis towards Provident Fund and Employee State Insurance, which are, defined contributions plans are charged to revenue. The company has paid to regulatory authority & has no further obligations other than these contributions.

b) Escrow Deposits Scheme:

The company has a defined contribution plan towards employee escrow deposit scheme for eligible employees as perterms of employment. The contribution ofthe Company on monthly basis are charged to revenue and provided as liability to be paid upon Retirement, Resignation or Termination of employment subject to fulfillment of agreed term & Conditions.

The company also under obligation to pay interest on the escrow deposit contribution made by Company as well as the equivalent amount of cumulative escrow deposit monthly retention recovered from the employee covered in the scheme. The interest is provided as liability to be paid upon Retirement, Resignation or Termination of employment subject to fulfillment of agreed term & Conditions.

c) Employee Security Deposit Scheme:

The company retains an amount as a security deposit on monthly basis for eligible employees as a part of employee retention policy for 3 years from the date of appointment. The Company also under an obligation to pay interest on the security deposit retention received from the employee covered in the scheme. The interest is provided as liability to be paid upon Retirement, Resignation or Termination of employment subject to fulfillment of agreed term & Conditions.

d) Leave Encashment:

Leave Encashment towards accumulated Compensated Absences are the Company's defined benefit plan payable upon Retirement, Resignation or Termination of employment. The present value of the obligation under such defined benefit plan is determined based on actuarial Valuation using the Projected Unit Credit Method.

e) Gratuity:

The Company provides for gratuity, a defined benefit plan (the Gratuity plan) covering eligible employees in accordance with the Payment of Gratuity Act, 1972. The Gratuity plan provides a lumpsum payment to vested employees at retirement, death, incapacitation ortermination of employment, of an amount based on the respective employee's salary and the tenure of employment. The Company's liability is actually determined under (using the Projected Unit Credit method) at the end of each year. Actuarial losses/gains are recognized in the statement of profit & loss in the year in which they arise.

The Company has subscribed to a gratuity plan which is administrated through HDFC Standard life Insurance Company Limited and a trust which is administrated through trustees.

The plan assets for funding the liability are insurer managed funds. The shortfall in the actuarially determined liability and the value of plan assets as on reporting date is provided as liability and recognized in statement of profit & loss in the year.

The actuarial losses / gains are recognized in the year in which they arise.

10. Provision & Contingent Liabilities Provision:

Provision are recognized when there is a present obligation as a result of a past event and it is probable that an outflow of benefits will be required to settle the obligation and there is a reliable estimate of the amount of the obligation.

Contingent Liabilities:

Contingent liabilities are disclosed when there is a possible obligation arising from the past events, the existence of which will be confirmed only on the occurrence or non occurrence of one or more uncertain future events not wholly within the control of the company or a present obligation that arises from past events where it is either not portable that an outflow of resources will be required to settle ora reliable estimate of the amount cannot be made.

11. Current and Deferred Tax

Tax expense for the period, comprising Current tax and Deferred Tax are included in the determination of net profit or loss for the period.

Current tax is measured at the amount expected to be paid to the tax authorities in accordance with the taxation laws prevailing in India.

Deferred Tax is recognized for all the timing differences, subject to the consideration of prudence in respect of deferred tax assets. Deferred tax assets are recognized and carried forward only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

Deferred Tax assets and liabilities are measured using the tax rates and tax laws that have been enacted and substantively enacted by the Balance Sheet date. At each Balance Sheet date, the company re-assesses unrecognized deferred tax assets, if any.

12. Borrowing Cost

Borrowing cost incurred in relation to the acquisition, construction of assets are capitalized as the part of cost of such assets up to date which such assets are ready for intended use. Other borrowing costs are charged as an expense in the year in which they are incurred.

13. Impairment of Assets

Assessment is done at each Balance Sheet date as to whether there is any indication that a tangible asset may be impaired. For the purpose of assessing impairment, the smallest identifiable group of asset that generates cash inflows from continuing use that are largely independent of the cash inflow from other assets or groups of assets, is considered as a cash generating unit. If any such indication exists, an estimate of the recoverable amount of the asset/cash generating unit is made.

Assets whose carrying value exceeds their recoverable amount are written down to the recoverable amount. Recoverable amount is higher of an asset's or cash generating unit's net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an assets and from its disposal at the end of its useful life. Assessment is aiso done at each Balance Sheet date as to whether there is any indication that an impairment loss recognized for an asset in prior accounting periods may no longer exist or may have decreased.

14. Lease Rentals

Lease Rentals for assets taken on operating lease are recognized as under expenses in Profit and Loss Account over the lease term on accrual basis.

15. Cash and Cash Equivalents:

In the Cash flow statement, cash and cash equivalents include cash on hand, demand deposits with bank, other short term highly liquid investments with original maturity of three months or less.

16. Earnings per share:

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by weighted average number of equity shares outstanding during the period. The Weighted average number of equity shares outstanding during the period and for all periods presented is adjusted for the events, such as bonus shares, other than conversion of potential equity share that have changed the number of equity shares outstanding, without a corresponding change in resources.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity share holders and the weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares.


Mar 31, 2014

1. Basis of preparation of Financial Statements

a) The financial statements have been prepared under historical cost convention, in accordance with the generally accepted accounting principles and the provision of the Companies Act, 1956 as adopted consistently by the Company.

b) Accounting policies not specifically referred to otherwise are consistent with the generally accepted accounting principles followed by the Company.

c) The preparation of financial statements requires estimates and assumption to be made that effect the reported amount of assets and liabilities on the date of financial statements and the reported amount of revenue and expenses during the reporting period .The Difference between the actual and estimate are recognized in the period in which results are known/materialized.

2. Fixed Assets and Depreciation

a) Fixed assets stated at cost of acquisition or construction or less accumulated depreciation. All costs, including financial cost till commencements of commercial production, net charges on Foreign Exchange Contracts and adjustments arising from exchange rate variations relating to specific borrowings attributable to the fixed assets are capitalized.

b) Depreciation on fixed assets provided on straight-line method at the rates prescribed by Schedule XIV of the Companies Act, 1956.

c) Leasehold Improvements are written off over the period of lease.

3. Foreign Exchange Transaction

Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing at the time of the transaction. Outstanding balances are valued at the rate prevailing on the Balance Sheet date.

4. Investments

The Investments are stated at cost. Provision for diminution in the value of long-term investments is made only if such a decline is other than temporary in the opinion of the management.

5. Inventories

The inventories are valued as follows:

a) Raw materials, Stores, Spares and Stock in transit are valued at cost.

b) Stock in process is valued at cost.

c) Finished goods are valued at cost or market value whichever is lower.

6. Sales

Sales include related services, and Taxes.

7. Government Grants & Subsidies

a) The government grants received are accounted in the year of receipt.

b) Interest subsidy on term loans under TUF scheme is provided on accrual basis only to the extent of certainty of receipt & filling of claim in respect thereof.

8. Customs Duty

Custom Duty is accounted for as and when paid on the clearance of the goods for home Consumption.

9. Employees Retirement and other benefits

a) The contribution of the Company towards Provident Fund and Employee State Insurance, which are, defined contributions plans are charged to revenue.

b) The Employee''s Gratuity and Leave Encashment are the company''s defined benefit plan. The present value of the obligation under such defined benefit plan is determined based on Actuarial Valuation using the Projected Unit Credit Method.

10. Contingent Liabilities

Contingent liabilities are not provided for and are disclosed by way of notes.

11. Provisions for Current and Deferred Tax

Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income-tax Act, 1961.

Deferred tax resulting from "timing difference" between book and taxable profit is accounted for using the tax rates and laws that have been enacted or substantively enacted as on the balance sheet date. The deferred tax assets is recognized and carried forward only to the extent that there is a reasonable and virtual certainty that the assets will be realised in future.

12. Borrowing Cost

Borrowing cost incurred in relation to the acquisition, construction of assets are capitalized as the part of cost of such assets up to date which such assets are ready for intended use. Other borrowing costs are charged as an expense in the year in which they are incurred.

13. Impairment of Assets

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

14. Lease Rentals :

Lease Rentals for assets taken on operating lease are recognized as on expenses in Profit and Loss Account over the lease term on accrual basis.


Mar 31, 2013

1. Basis of preparation of Financial Statements

a) The financial statements have been prepared under historical cost convention, in accordance with the generally accepted accounting principles and the provision of the Companies Act, 1956 as adopted consistently by the Company.

b) Accounting policies not specifically referred to otherwise are consistent with the generally accepted accounting principles followed by the Company.

c) The preparation of financial statements requires estimates and assumption to be made that effect the reported amount of assets and liabilities on the date of financial statements and the reported amount of revenue and expenses during the reporting period .The Difference between the actual and estimate are recognized in the period in which results are known/materialized.

2. Fixed Assets and Depreciation

a) Fixed assets stated at cost of acquisition or construction or less accumulated depreciation. All costs, including financial cost till commencements of commercial production, net charges on Foreign Exchange Contracts and adjustments arising from exchange rate variations relating to specific borrowings attributable to the fixed assets are capitalized.

b) Depreciation on fixed assets provided on straight-line method at the rates prescribed by Schedule XIV of the CompaniesAct, 1956.

c) Leasehold Improvementsarewrittenoffovertheperiodoflease.

3. Foreign Exchange Transaction

Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing at the

time of the transaction. Outstanding balances are valued at the rate prevailing on the Balance Sheet date.

4. Investments

The Investments are stated at cost. Provision for diminution in the value of long-term investments is made only

if such a decline is other than temporary in the opinion of the management.

5. Inventories

The inventories are valued as follows:

a) Raw materials, Stores, Spares and Stock in transit are valued at cost.

b) Stock in process is valued at cost.

c) Finished goods are valued at cost or market value whichever is lower.

6. Sales

Sales include related services, and Taxes.

7. Government Grants & Subsidies

a) The government grants received are accounted in the year of receipt.

b) Interest subsidy on term loans under TUF scheme is provided on accrual basis only to the extent of certainty of receipt & filling of claim in respect thereof.

8. Customs Duty

Custom Duty is accounted for as and when paid on the clearance of the goods for home Consumption.

9. Employees Retirement and other benefits

a) The contribution of the Company towards Provident Fund and Employee State Insurance, which are, defined contributions plans are charged to revenue.

b) The Employee''s Gratuity and Leave Encashment are the company''s defined benefit plan. The present value of the obligation under such defined benefit plan is determined based on Actuarial Valuation using the Projected Unit Credit Method.

10. Contingent Liabilities

Contingent liabilities are not provided for and are disclosed by way of notes.

11. Provisions for Current and Deferred Tax

Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income-tax Act, 1961.

Deferred tax resulting from "timing difference" between book and taxable profit is accounted for using the tax rates and laws that have been enacted or substantively enacted as on the balance sheet date. The deferred tax assets is recognized and carried forward only to the extent that there is a reasonable and virtual certainty that the assets will be realised in future.

12. Borrowing Cost

Borrowing cost incurred in relation to the acquisition, construction of assets are capitalized as the part of cost of such assets up to date which such assets are ready for intended use. Other borrowing costs are charged as an expense in the year in which they are incurred.

13. Impairment of Assets

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

14. Lease Rentals:

Lease Rentals for assets taken on operating lease are recognized as on expenses in Profit and Loss Account over the lease term on accrual basis.


Mar 31, 2012

1. Basis of preparation of Financial Statements

a) The financial statements have been prepared under historical cost convention, in accordance with the generally accepted accounting principles and the provision of the Companies Act, 1956 as adopted consistently by the Company.

b) Accounting policies not specifically referred to otherwise are consistent with the generally accepted accounting principles followed by the Company.

c) The preparation of financial statements requires estimates and assumption to be made that effect the reported amount of assets and liabilities on the date of financial statements and the reported amount of revenue and expenses during the reporting period .The Difference between the actual and estimate are recognized in the period in which results are known/materialized.

2. Fixed Assets and Depreciation

a) Fixed assets stated at cost of acquisition or construction or less accumulated depreciation. All costs, including financial cost till commencements of commercial production, net charges on Foreign Exchange Contracts and adjustments arising from exchange rate variations relating to specific borrowings attributable to the fixed assets are capitalized.

b) Depreciation on fixed assets provided on straight-line method at the rates prescribed by Schedule XIV of the Companies Act, 1956.

C) Leasehold Improvements are written off over the period of lease.

3. Foreign Exchange Transaction

Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing at the time of the transaction. Outstanding balances are valued at the rate prevailing on the Balance Sheet date.

4. Investments

The Investments are stated at cost. Provision for diminution in the value of long-term investments is made only if such a decline is other than temporary in the opinion of the management.

5. Inventories

The inventories are valued as follows:

a) Raw materials, Stores, Spares and Stock in transit are valued at cost.

b) Stock in process is valued at cost.

c) Finished goods are valued at cost or market value whichever is lower.

6. Sales

Sales include related services, and Taxes. The company has changed the method of accounting Sales by excluding the value of interdivision Sales in the current year. The above change has no effect in overall profit / loss of the year.

7. Government Grants & Subsidies

a) The government grants received are accounted in the year of receipt.

b) Interest subsidy on term loans under TUF scheme is provided on accrual basis only to the extent of certainty of receipt & filling of claim in respect thereof.

8. Customs

Custom Duty is accounted for as and when paid on the clearance of the goods for home consumption.

9. Employees Retirement and other benefits

a) The contribution of the Company towards Provident Fund and Employee State Insurance, which are, defined contributions plans are charged to revenue.

b) The Employee's Gratuity and Leave Encashment are the company's defined benefit plan. The present value of the obligation under such defined benefit plan is determined based on Actuarial Valuation using the Projected Unit Credit Method.

10. Contingent Liabilities

Contingent liabilities are not provided for and are disclosed by way of notes.

11. Inter Divisional Transfers

Inter divisional transfers of goods and services for internal use of captive consumption in plant located at different places/states were erstwhile upto FY 2010-11 shown as contra items in the Profit and Loss Account as interdivision Sales and Purchases. The company has changed the method of accounting Sales revenue from operations & consumption of raw material by excluding the value of interdivision Sales/purchases in the current year. The above change has no effect in overall profit /loss of the year

12. Provisions for Current and Deferred Tax

Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income-tax Act, 1961.

Deferred tax resulting from "timing difference" between book and taxable profit is accounted for using the tax rates and laws that have been enacted or substantively enacted as on the balance sheet date. The deferred tax assets is recognized and carried forward only to the extent that there is a reasonable and virtual certainty that the assets will be realized in future.

13. Borrowing Cost

Borrowing cost incurred in relation to the acquisition, constriction of assets are capitalized as the part of cost of such assets up to date which such assets are ready for intended use. Other borrowing costs are charged as an expense in the year in which they are incurred.

14. Impairment of Assets

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

15. Lease Rentals :

Lease Rentals for assets taken on operating lease are recognized as on expenses in Profit and Loss Account over the lease term on accrual basis.


Mar 31, 2010

1. Basis of preparation of Financial Statements

a) The financial statements have been prepared under historical cost convention, in accordance with the generally accepted accounting principles and the provision of the Companies Act, 1956 as adopted consistently by the Company.

b) Accounting policies not specifically referred to otherwise are consistent with the generally accepted accounting principles followed by the Company.

c) The preparation of financial statements requires estimates and assumption to be made that effect the reported amount of assets and liabilities on the date of financial statements and the reported amount of revenue and expenses during the reporting period The Difference between the actual and estimate are recognized in the period in which results are known/materialized.

2. Fixed Assets and Depreciation

a) Fixed assets stated at cost of acquisition or construction or less accumulated depreciation. All costs, including financial cost till commencements of commercial production, net charges on Foreign Exchange Contracts and adjustments arising from exchange rate variations relating to specific borrowings attributable to the fixed assets are capitalized.

b) Depreciation on fixed assets provided on straight-line method at the rates prescribed by Schedule XIV of the Companies Act, 1956.

3. Foreign Exchange Transaction

Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing at the time of the transaction. Outstanding balances are valued at the rate prevailing on the Balance Sheet date.

4. Investments

The Investments are stated at cost. Provision for diminution in the value of long-term investments is made only if such a decline is other than temporary in the opinion of the management.

5. Inventories

The inventories are valued as follows:

a) Raw materials, Stores, Spares and Stock in transit are valued at cost.

b) Stock in process is valued at cost.

c) Finished goods are valued at cost or market value whichever is lower.

6. Sales

Sales include Inter-division transfers, related services, and Taxes.

7. Government Grants & Subsidies

a) The government grants received are accounted in the year of receipt.

b) Interest subsidy on term loans under TUF scheme is provided on accrual basis only to the extent of certainty of receipt & filling of claim in respect thereof.

8. Customs and Excise Duty

Custom Duty is accounted for as and when paid on the clearance of the goods for home consumption.

9. Employees Retirement and other benefits

a) The contribution of the Company towards Provident Fund and Employee State Insurance, which are, defined contributions plans are charged to revenue.

b) The Employees Gratuity and Leave Encashment are the companys defined benefit plan. The present value of the obligation under such defined benefit plan is determined based on Acturial Valuation using the Projected Unit Credit Method.

10. Contingent Liabilities

Contingent liabilities are not provided for and are disclosed by way of notes.

11. Inter Divisional Transfers

Inter divisional transfers of goods and services for internal use of captive consumption in plant located at different places/states are shown as contra items in the Profit and Loss Account to reflect the true economical value of the production inter-se the divisions. Any unrealized profit on unsold stocks is ignored while valuing inventories. This accounting treatment has no impact on the profit of the company.

12. Provisions for Current and Deferred Tax

Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income-tax Act, 1961.

Deferred tax resulting from "timing difference" between book and taxable profit is accounted for using the tax rates and laws that have been enacted or substantively enacted as on the balance sheet date. The deferred tax assets is recognized and carried forward only to the extent that there is a reasonable and virtual certainty that the assets will be realised in future.

13. Borrowing Cost

Borrowing cost incurred in relation to the acquisition, constriction of assets are capitalized as the part of cost of such assets up to date which such assets are ready for intended use. Other borrowing costs are charged as an expense in the year in which they are incurred.

14. Impairment of Assets

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

15. Lease Rentals:

Lease Rentals for assets taken on operating lease are recognized as on expenses in Profit and Loss Account over the lease term on accrual basis.

 
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