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Accounting Policies of Stovec Industries Ltd. Company

Dec 31, 2016

1) General Information

Stovec Industries Limited ("the Company") was incorporated on 5th June, 1973. The Company''s factory and registered office is presently located in Ahmadabad, Gujarat. The Company is listed on BSE Ltd and Ahmadabad Stock Exchange Ltd. The Company has three major Business Segments: Textile Machinery & Consumables, Graphics Consumables and Galvanic. The Company is a Technology and Market leader in Rotary Screen Printing Industry in India.

2) Statement of significant accounting policies

a) Basis of preparation of financial statements

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) Rules 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 aspects with the accounting standards notified under Section 211(3C) [Companies (Accounting Standards) Rules, 2006, as amended] and other relevant provisions of the Companies Act, 2013.

All assets and liabilities have been classified as current or non-current as per the Company''s 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 equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current — noncurrent classification of assets and liabilities.

b) Inventories

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

i) Cost of raw materials, packing materials, stores, spares and tools are computed on a moving weighted average cost basis.

ii) Cost of work-in-progress/ finished goods are determined on moving weighted average cost basis comprising material, labour and related factory overheads.

c) Revenue Recognition

i) Sale of Goods and Services

Revenue is recognized when the property and all significant risks and rewards of ownership are transferred to the buyer and no significant uncertainty exists regarding the amount of consideration that is derived from the sale of goods. Sales are recorded net of trade discount, rebates and sales tax / value added tax is inclusive of excise duty.

Service income is recognized on completion of rendering of services and is recorded net of service tax. Cost incurred during the pendency of the contract is carried forward as job in progress at lower of cost and net realizable amounts.

ii) Other Revenue

Commission income is recognized and accounted on accrual basis.

Interest income is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

Eligible export incentives are recognized in the year in which the conditions precedent are met and there is no significant uncertainty about the collectability.

Lease rental income is recognized on accrual basis.

Dividend income is accounted for in the year in which the right to receive the same is established.

d) Fixed Assets and Depreciation / Amortization Tangible Assets

i) Fixed assets are stated at historical cost less depreciation / amortization. Cost includes all expenses relating to acquisition and installation of the concerned assets.

ii) Depreciation has been provided on a straight-line method (pro-rata from the date of additions) over the useful life as prescribed in Schedule II to the Companies Act 2013 or as per technical evaluation.

e) Foreign Currency Transactions Initial Recognition

On initial recognition, all foreign currency transactions are recorded by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.

Subsequent Recognition

As at the reporting date, non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction. All monetary assets and liabilities in foreign currency are restated at the end of accounting period.

Exchange differences on restatement of all monetary items are recognized in the Statement of Profit and Loss.

Forward Exchange Contracts

The premium or discount arising at the inception of forward exchange contracts entered into to hedge an existing asset / liability, is amortized as expense or income over the life of the contract. Exchange differences on such a contract are recognized in the Statement of Profit and Loss in the reporting period in which the exchange rates change. Any profit or loss arising on cancellation or renewal of such a forward exchange contract are recognized as income or as expense for the period.

f) Investments

Investments that are readily realizable and are intended to be held for not more than one year from the date, on which such investment are made, are classified as Current Investment. All 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 the investments, such reduction being determined and made for investment individually.

g) Employee Benefits

i) Short Term Employee Benefits:

The employees of the Company are entitled to leave encashment as per the leave policy of the Company. The liability in respect of leave encashment of short term nature is provided, based on an actuarial valuation carried out by an independent actuary as at the year-end.

ii) Long Term Employee Benefits:

Defined Contribution Plans

The Company has Defined Contribution plans for post employment benefits namely Provident Fund.

The Company contributes to a Government administered Provident Fund and has no further obligation beyond making its contribution.

The Company makes contributions to state plans namely Employee''s State Insurance Fund and Employee''s Pension Scheme 1995 and has no further obligation beyond making the payment to them.

The Company''s contributions to the above funds are charged to Statement of Profit and Loss every year.

Defined Benefit Plans

The Company has Defined Benefit Plan comprising of Gratuity and Leave Encashment. The Company contributes to the Gratuity Fund which is recognized by the Income Tax Authorities and administered through its trustees.

Liability for Defined Benefit Plans is provided on the basis of actuarial valuation, as at the Balance Sheet date, carried out by an independent actuary using the Projected Unit Credit Method.

iii) Termination benefits are recognized as an expense as and when incurred.

iv) Actuarial gains and losses comprise experience adjustments and the effects of changes in actuarial assumptions and are recognized immediately in the Statement of Profit and Loss as income or expense.

h) Research and Development Expenditure

Research and development expenditure is charged to revenue under the natural heads of account in the year in which it is incurred. However, development expenditure qualifying as an intangible asset, if any, is capitalized, to be amortized over the economic life of the product. Research and development expenditure on fixed asset is depreciated in accordance with the useful life specified in paragraph (d) above.

i) Operating Leases As a lessee:

Leases in which a significant portion of the risks and rewards of ownership are retained by the less or are classified as operating leases. Payments made under operating leases are charged to the Statement of Profit and Loss on a straight-line basis over the period of the lease.

As a less or:

The Company has leased certain tangible assets and such leases where the Company has substantially retained all the risks and rewards of ownership are classified as operating leases. Lease income on such operating leases are recognized in the Statement of Profit and Loss on a straight line basis over the lease term.

j) Taxes on Income

Provision for tax for the year is made on the assessable income at the tax rate applicable to the relevant assessment year.

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 or substantively enacted by the Balance Sheet date. At each Balance Sheet date, the Company re-assesses unrecognized deferred tax assets, if any.

k) Warranty

A provision is recognized for expected warranty claims on products sold, based on past experience of level of repairs and returns. Assumptions used to calculate the provision for warranties are based on current sales level and current information available about returns.

l) Impairment of Assets

The Company assesses at each Balance Sheet date whether there is any indication that asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the Statement of Profit and Loss.

m) Provisions and Contingent Liabilities

Provisions: Provisions are recognized when there is a present obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and there is a reliable estimate of the amount of the obligation. Provisions are measured at the best estimate of the expenditure required to settle the present obligation at the Balance sheet date and are not discounted to its present value.

Contingent Liabilities: Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by 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 probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made, is termed as a contingent liability.

n) Accounting Estimates

The preparation of financial statements requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of financial statements and the reported amounts of revenue and expenses during the reporting period. Difference between the actual results and the estimates are recognized in the year in which the results are known/ materialised.


Dec 31, 2014

A) Basis of preparation of financial statements

These Financial Statements have been prepared in accordance with generally accepted accounting principles in India under the historical cost convention on accrual basis. Pursuant to circular 15/2013 dated September 13, 2013 read with circular 08/2014 dated April 4, 2014, till the standard 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 aspects with the Accounting Standards notified under the Companies Act, 1956 of India (the "Act") read with the General Circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013.

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

b) Inventories

Inventories are valued at lower of cost and net realisable value.

i) Cost of raw materials, packing materials, stores, spares and tools are computed on a moving weighted average cost basis.

ii) Cost of work-in-progress/ finished goods are determined on moving weighted average cost basis comprising material, labour and related factory overheads.

c) Revenue Recognition Sale of Goods

Revenue is recognised when the property and all significant risks and rewards of ownership are transferred to the buyer and no significant uncertainty exists regarding the amount of consideration that is derived from the sale of goods. Sales are recorded net of trade discount, rebates and sales tax / value added tax is inclusive of excise duty.

Sale of Services

Service income is recognised on completion of rendering of services and is recorded net of service tax. Cost incurred during the pendency of the contract is carried forward as job in progress at lower of cost and net realisable amounts.

Commission

Commission income is recognised and accounted on accrual basis.

Interest

Interest income is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable.

d) Fixed Assets and Depreciation / Amortisation Tangible Assets

i) Fixed assets are stated at historical cost less depreciation / amortisation. Cost includes all expenses relating to acquisition and installation of the concerned assets.

ii) Depreciation has been provided on a straight-line method (pro-rata from the date of additions) over the useful life of the assets as stated below. Depreciation has been provided at the rates stipulated in Schedule XIV to the Act, or at the rates determined based on the useful life of assets, as estimated by managament, whichever is higher.

Description of the asset Useful Life (Years)

Building 30

Plant and Machinery 9

Patterns/Tools/Mollet 3

Computers 4

Furniture and Fixtures 10

Office Equipments, Air Conditioners and Cooler etc. 3 to 6

Vehicles 5

Intangible Assets

Intangible Assets are stated at acquisition cost, net of accumulated amortization and accumulated impairment losses, if any. Intangible Assets are amortized on a straight - line basis (pro-rata from the date of additions) over there estimated useful lives. The useful lives are as under:

Description of the asset Useful Life (Years)

Computer Software 3

Trademark 5

Technical/ Commercial Know-how 5

e) Foreign Currency Transactions

Foreign currency transactions are accounted at the exchange rates prevailing on the date of the transaction. Gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies are recognised in the Statement of Profit and Loss.

f) Investments

Investments that are readily realisable and are intended to be held for not more than one year from the date, on which such investment are made, are classified as Current Investment. All 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 dimunition is made to recognise a decline, other than temporary, in the value of the investments, such reduction being determined and made for investment individually.

g) Employee Benefits

i) Short Term Employee Benefits:

The employees of the Company are entitled to leave encashment as per the leave policy of the Company. The liability in respect of leave encashment of short term nature is provided, based on an actuarial valuation carried out by an independent actuary as at the year-end.

ii) Long Term Employee Benefits:

Defined Contribution Plans

The Company has Defined Contribution plans for post employment benefits namely Provident Fund.

The Company contributes to a Government administered Provident Fund and has no further obligation beyond making its contribution.

The Company makes contributions to state plans namely Employee''s State Insurance Fund and Employee''s Pension Scheme 1995 and has no further obligation beyond making the payment to them.

The Company''s contributions to the above funds are charged to Statement of Profit and Loss every year.

Defined Benefit Plans

The Company has Defined Benefit Plan comprising of Gratuity and Leave Encashment. The Company contributes to the Gratuity Fund which is recognised by the Income Tax Authorities and administered through its trustees.

Liability for Defined Benefit Plans is provided on the basis of actuarial valuation, as at the Balance Sheet date, carried out by an independent actuary using the Projected Unit Credit Method.

iii) Termination benefits are recognised as an expense as and when incurred.

iv) Actuarial gains and losses comprise experience adjustments and the effects of changes in actuarial assumptions and are recognised immediately in the Statement of Profit and Loss as income or expense.

h) Research and Development Expenditure

Research and development expenditure is charged to revenue under the natural heads of account in the year in which it is incurred. However, development expenditure qualifying as an intangible asset, if any, is capitalised, to be amortized over the economic life of the product. Research and development expenditure on fixed asset is depreciated in accordance with the useful life specified in paragraph (d) above.

i) Operating Leases

As a lessee:

Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to the Statement of Profit and Loss on a straight-line basis over the period of the lease.

As a lessor:

The Company has leased certain tangible assets and such leases where the Company has substantially retained all the risks and rewards of ownership are classified as operating leases. Lease income on such operating leases are recognised in the Statement of Profit and Loss on a straight line basis over the lease term.

j) Taxes on Income

Provision for tax for the year is made on the assessable income at the tax rate applicable to the relevant assessment year.

Deferred tax is recognised for all the timing differences, subject to the consideration of prudence in respect of deferred tax assets. Deferred tax assets are recognised 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 realised.

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

k) Warranty

A provision is recognised for expected warranty claims on products sold, based on past experience of level of repairs and returns. Assumptions used to calculate the provision for warranties are based on current sales level and current information available about returns.

l) Impairment of Assets

The Company assesses at each Balance Sheet date whether there is any indication that asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognised in the Statement of Profit and Loss.

m) Provisions and Contingent Liabilities

Provisions: Provisions are recognised when there is a present obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and there is a reliable estimate of the amount of the obligation. Provisions are measured at the best estimate of the expenditure required to settle the present obligation at the Balance sheet date and are not discounted to its present value.

Contingent Liabilities: Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by 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 probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made, is termed as a contingent liability.

n) Accounting Estimates

The preparation of financial statements requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of financial statements and the reported amounts of revenue and expenses during the reporting period. Difference between the actual results and the estimates are recognised in the year in which the results are known/ materialised.


Dec 31, 2013

1) General Information

Stovec Industries was incorporated in 1973, in Ahmadabad, Gujarat. The Company is listed on Bombay Stock Exchange and Ahmadabad Stock Exchange. The Company has three major Business segments : Textile Machinery and Consumables, Graphics Consumables and Galvanic. "Textile Machinery and Consumables" segment includes Perforated Rotary Screens, Laquer & Auxiliary Chemicals, Digital Ink, Rotary Screen Printing Machine, Engraving Equipment, Components and Spares. "Graphics Consumables" segment includes Anilox Rollers, Rotamesh screens and Rota Plate. "Galvanic" Segment includes Galvano Consumables.

2) Statement of significant accounting policies

a) Basis of preparation of financial statements

These Financial Statements have been prepared under historical cost convention from the books of account maintained on accrual basis to comply in all material aspects with all the applicable accounting principles in India, the applicable accounting standards as notified under the Companies Act, 1956, of India (the "Act") read with the General Circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013.

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

b) Inventories

Inventories are valued at lower of cost and net realisable value.

i) Cost of raw materials, packing materials, stores, spares and tools are computed on a moving weighted average cost basis.

ii) Cost of work-in-progress/ finished goods are determined on moving weighted average cost basis comprising material, labor and related factory overheads.

c) Revenue Recognition

Sale of Goods

Revenue is recognised when the property and all significant risks and rewards of ownership are transferred to the buyer and no significant uncertainty exists regarding the amount of consideration that is derived from the sale of goods. Sales are recorded net of trade discount, rebates and sales tax / value added tax and inclusive of excise duty.

Sale of Services

Service income is recognised on completion of rendering of services and is recorded net of service tax. Cost incurred during the pendency of the contract is carried forward as job in progress at realisable amounts.

Interest

Interest income is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable.

d) Fixed Assets and Depreciation / Amortisation

Tangible Assets

i) Fixed assets are stated at historical cost less depreciation / amortisation. Cost includes all expenses relating to acquisition and installation of the concerned assets.

ii) Depreciation has been provided on a straight-line method (pro-rata from the date of additions) over the useful life of the assets as stated below. Depreciation has been provided at the rates stipulated in Schedule XIV to the Act, or at the rates determined based on the useful life of assets, as estimated by management, whichever is higher.

Intangible Assets

Computer software is capitalised and amortised on a straight – line basis over its useful life, which is estimated as three years.

e) Foreign Currency Transactions

Foreign currency transactions are accounted at the exchange rates prevailing on the date of the transaction. Gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies are recognised in the Statement of Profit and Loss.

f) Investments

Long term investments are stated at cost less diminution in value which is other than temporary.

g) Employee Benefits

i) Short Term Employee Benefits:

The employees of the Company are entitled to leave encashment as per the leave policy of the Company. The liability in respect of leave encashment of short term nature is provided, based on an actuarial valuation carried out by an independent actuary as at the year-end.

ii) Long Term Employee Benefits:

Defined Contribution Plans

The Company has Defined Contribution plans for post employment benefits namely Provident Fund.

The Company contributes to a Government administered Provident Fund and has no further obligation beyond making its contribution.

The Company makes contributions to state plans namely Employee''s State Insurance Fund and Employee''s Pension Scheme 1995 and has no further obligation beyond making the payment to them.

The Company''s contributions to the above funds are charged to Statement of Profit and Loss every year.

Defined Benefit Plans

The Company has Defined Benefit Plan comprising of Gratuity and Leave Encashment. The Company contributes to the Gratuity Fund which is recognised by the Income Tax Authorities and administered through its trustees.

Liability for Defined Benefit Plans is provided on the basis of actuarial valuation, as at the Balance Sheet date, carried out by an independent actuary using the Projected Unit Credit Method.

iii) Termination benefits are recognised as an expense as and when incurred.

iv) Actuarial gains and losses comprise experience adjustments and the effects of changes in actuarial assumptions and are recognised immediately in the Statement of Profit and Loss as income or expense.

h) Research and Development Expenses

Research and development expenses of revenue nature are charged to the Statement of Profit and Loss when incurred. Expenditure of capital nature is capitalised and depreciated in accordance with the rates specified in paragraph (d) above.

i) Operating Leases

As a lessee:

Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to the Statement of Profit and Loss on a straight-line basis over the period of the lease.

As a lessor:

The Company has leased certain tangible assets and such leases where the Company has substantially retained all the risks and rewards of ownership are classified as operating leases. Lease income on such operating leases are recognised in the Statement of Profit and Loss on a straight line basis over the lease term.

j) Taxes on Income

Provision for tax for the year is made on the assessable income at the tax rate applicable to the relevant assessment year.

Deferred tax is recognised for all the timing differences, subject to the consideration of prudence in respect of deferred tax assets. Deferred tax assets are recognised 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 realised.

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

k) Warranty

A provision is recognised for expected warranty claims on products sold, based on past experience of level of repairs and returns. Assumptions used to calculate the provision for warranties are based on current sales level and current information available about returns.

l) Impairment of Assets

The Company assesses at each Balance Sheet date whether there is any indication that asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognised in the Statement of Profit and Loss.

m) Provisions and Contingent Liabilities

Provisions: Provisions are recognised when there is a present obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and there is a reliable estimate of the amount of the obligation. Provisions are measured at the best estimate of the expenditure required to settle the present obligation at the Balance sheet date and are not discounted to its present value.

Contingent Liabilities: Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by 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 probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made, is termed as a contingent liability.

n) Accounting Estimates

The preparation of financial statements requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of financial statements and the reported amounts of revenue and expenses during the reporting period. Difference between the actual results and the estimates are recognised in the year in which the results are known/ materialised.


Dec 31, 2012

A) Basis of preparation of financial statements

These Financial Statements have been prepared under historical cost convention from the books of account maintained on accrual basis to comply in all material aspects with all the applicable accounting principles in India, the applicable accounting standards as notified under Section 211(3C) of the Companies Act, 1956, of India (the "Act") and the relevant provisions of the Act.

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

b) Inventories

Inventories are valued at lower of cost and net realisable value.

i) Cost of raw materials, packing materials, stores, spares and tools are computed on a moving weighted average cost basis.

ii) Cost of work-in-progress/ finished goods are determined on moving weighted average cost basis comprising material, labour and related factory overheads.

c) Revenue Recognition

Sale of Goods

Revenue is recognised when the property and all significant risks and rewards of ownership are transferred to the buyer and no significant uncertainty exists regarding the amount of consideration that is derived from the sale of goods. Sales are recorded net of trade discount, rebates and sales tax.

In respect of sale transaction involving installation/ commissioning services, the composite revenue is recognised based on transfer of significant risks and rewards.

Sale of Services

Service income is recognised on completion of rendering of services and is recorded net of service tax. Cost incurred during the pendency of the contract is carried forward as job in progress at realisable amounts.

Interest

Interest income is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable.

d) Fixed Assets and Depreciation / Amortisation Tangible Assets

i) Fixed assets are stated at historical cost less depreciation / amortisation. Cost includes all expenses relating to acquisition and installation of the concerned assets.

ii) Depreciation has been provided on a straight-line method (pro-rata from the date of additions) over the useful life of the assets as stated below. Depreciation has been provided at the rates stipulated in Schedule XIV to the Act, or at the rates determined based on the useful of life of assets, as estimated by managament, whichever is higher.

Intangible Assets

Computer software is capitalised and amortised on a straight - line basis over its useful life, which is estimated as three years.

e) Foreign Currency Transactions

Foreign currency transactions are accounted at the exchange rates prevailing on the date of the transaction. Gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies are recognised in the Statement of Profit and Loss.

f) Investments

Long term investments are stated at cost less diminution in value which is other than temporary.

g) Employee Benefits

i) Short Term Employee Benefits:

The employees of the Company are entitled to leave encashment as per the leave policy of the Company. The liability in respect of leave encashment of short term nature is provided, based on an actuarial valuation carried out by an independent actuary as at the year-end.

ii) Long Term Employee Benefits:

Defined Contribution Plans

The Company has Defined Contribution plans for post employment benefits namely Provident Fund and Superannuation Fund.

The Company contributes to a Government administered Provident Fund and has no further obligation beyond making its contribution.

The Company makes contributions to state plans namely Employee''s State Insurance Fund and Employee''s Pension Scheme 1995 and has no further obligation beyond making the payment to them.

The Company''s contributions to the above funds are charged to Statement of Profit and Loss every year.

Defined Benefit Plans

The Company has Defined Benefit Plan comprising of Gratuity and Leave Encashment. The Company contributes to the Gratuity Fund which is recognised by the Income Tax Authorities and administered through its trustees.

Liability for Defined Benefit Plans is provided on the basis of actuarial valuation, as at the Balance Sheet date, carried out by an independent actuary using the Projected Unit Credit Method.

iii) Termination benefits are recognised as an expense as and when incurred.

iv) Actuarial gains and losses comprise experience adjustments and the effects of changes in actuarial assumptions and are recognised immediately in the Statement of Profit and Loss as income or expense.

h) Research and Development Expenses

Research and development expenses of revenue nature are charged to the Statement of Profit and Loss when incurred. Expenditure of capital nature is capitalised and depreciated in accordance with the rates specified in paragraph (d) above.

i) Operating Leases

Lease Income

Lease rentals in respect of operating lease arrangements are recognised in Statement of Profit and Loss in accordance with Accounting Standard - 19 "Leases". Costs, including depreciation, incurred in earning the lease income are recognised as expenses.

Lease Expense

Assets acquired as leases where a significant portion of the risks and rewards of the ownership are retained by the lessor are classified as Operating Leases. Lease rentals are charged to Statement of Profit and Loss on an accrual basis.

j) Taxes on Income

Provision for tax for the year is made on the assessable income at the tax rate applicable to the relevant assessment year.

Deferred tax is recognised for all the timing differences, subject to the consideration of prudence in respect of deferred tax assets. Deferred tax assets are recognised 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 realised.

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

k) Warranty

A provision is recognised for expected warranty claims on products sold, based on past experience of level of repairs and returns. Assumptions used to calculate the provision for warranties are based on current sales level and current information available about returns.

l) Impairment of Assets

The Company assesses at each Balance Sheet date whether there is any indication that asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognised in the Statement of Profit and Loss.

m) Provisions and Contingent Liabilities

Provisions: Provisions are recognised when there is a present obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and there is a reliable estimate of the amount of the obligation. Provisions are measured at the best estimate of the expenditure required to settle the present obligation at the Balance sheet date and are not discounted to its present value.

Contingent Liabilities: Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by 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 probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made, is termed as a contingent liability.

n) Accounting Estimates

The preparation of financial statements requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of financial statements and the reported amounts of revenue and expenses during the reporting period. Difference between the actual results and the estimates are recognised in the period in which the results are known/ materialised.


Dec 31, 2011

A) Basis of preparation of financial statements

These Financial Statements have been prepared under historical cost convention from the books of account maintained on accrual basis to comply in all material aspects with all the applicable accounting principles in India, the applicable accounting standard as notified under section 211(3C) of the Companies Act, 1956, of India (the ACI -Act ACI-) and the relevant provisions of the Act.

b) Inventories

Inventories are valued at lower of cost and net realisable value.

Cost of raw materials, packing materials, stores, spares and tools are computed on a weighted average basis.

Cost of work-in-progress/ finished goods are determined on weighted average basis comprising material, labour and related factory overheads.

c) Revenue Recognition

Sale of Goods

Revenue is recognised when the property and all significant risks and rewards of ownership are transferred to the buyer and no significant uncertainty exists regarding the amount of consideration that is derived from the sale of goods. Sales are recorded net of trade discount, rebates and sales tax.

In respect of sale transaction involving installation/ commissioning services, the composite revenue is recognised based on transfer of significant risks and rewards.

Sale of Services

Service income is recognised on completion of rendering of services and is recorded net of service tax. Cost incurred during the pendency of the contract is carried forward as job in progress.

Others

Other income is recognised on accrual basis except where receipt of income is uncertain. Commission income is recognised on the basis of confirmation received.

d) Fixed Assets and Depreciation/ Amortisation

i) Fixed assets are stated at historical cost less depreciation / amortisation. Cost includes all expenses relating to acquisition and installation of the concerned assets.

ii) Self constructed assets are stated at cost of construction relating directly to the specific asset and other costs attributable to the construction activity.

iii) Depreciation on all assets is provided on a straight line method at the rates and in the manner specified in Schedule XIV to the Act except in respect of the following:

Computer software is capitalised and amortised on a straight - line basis over its useful life, which is estimated as three years.

iv) Depreciation of Assets acquired during the year is being provided on pro-rata basis from the date of acquisition.

e) Foreign Currency Transactions

Foreign currency transactions are accounted at the exchange rates prevailing on the date of the transaction. Gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies are recognised in the Profit and Loss Account.

f) Investments

Long term investments are stated at cost less diminution in value which is other than temporary.

g) Employee Benefits

i) Short Term Employee Benefits:

The employees of the Company are entitled to leave encashment as per the leave policy of the Company. The liability in respect of leave encashment of short term nature is provided, based on an actuarial valuation carried out by an independent actuary as at the year-end.

ii) Long Term Employee Benefits:

Defined Contribution Plans

The Company has Defined Contribution plans for post employment benefits namely Provident Fund and Superannuation Fund.

The Company contributes to a Government administered Provident Fund and has no further obligation beyond making its contribution.

The Company makes contributions to state plans namely Employee's State Insurance Fund and Employee's Pension Scheme 1995 and has no further obligation beyond making the payment to them.

The Company's contributions to the above funds are charged to Profit and Loss Account every year.

Defined Benefit Plans

i) The Company has Defined Benefit Plan comprising of Gratuity and Leave Encashment. The Company contributes to the Gratuity Fund which is recognised by the Income Tax Authorities and administered through its trustees.

ii) Liability for Defined Benefit Plan is provided on the basis of actuarial valuation, as at the Balance Sheet date, carried out by an independent actuary using the Projected Unit Credit Method.

iii) Termination benefits are recognised as an expense as and when incurred.

iv) Actuarial gains and losses comprise experience adjustments and the effects of changes in actuarial assumptions and are recognised immediately in the Profit and Loss Account as income or expense.

h) Research and Development Expenses

Research and development expenses of revenue nature are charged to the Profit and Loss Account when incurred. Expenditure of capital nature is capitalised and depreciated in accordance with the rates specified in paragraph (d) above.

i) Operating Leases

Lease Income

Lease rentals in respect of operating lease arrangements are recognised in Profit and Loss Account in accordance with Accounting Standard - 19 ACI-Leases ACI-. Costs, including depreciation, incurred in earning the lease income are recognised as expenses.

Lease Expense

Assets acquired as leases where a significant portion of the risks and rewards of the ownership are retained by the lesser are classified as Operating Leases. Lease rentals are charged to Profit and Loss Account on an accrual basis.

j) Taxes on Income

Provision for tax for the year is made on the assessable income at the tax rate applicable to the relevant assessment year.

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

k) Warranty

A provision is recognised for expected warranty claims on products sold, based on past experience of level of repairs and returns. Assumptions used to calculate the provision for warranties are based on current sales level and current information available about returns.

l) Impairment of Assets

The Company assesses at each Balance sheet Date whether there is any indication that asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognised in the Profit and Loss Account.

m) Provision for Contingent Liabilities

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

n) Accounting Estimates

The preparation of financial statements requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of financial statements and the reported amounts of revenue and expenses during the reporting period. Difference between the actual results and the estimates are recognised in the period in which the results are known/ materialised.


Dec 31, 2010

A) Basis of preparation of financial statements

These Financial Statements have been prepared under historical cost convention from the books of account maintained on accrual basis to comply in all material aspects with all the applicable accounting principles in India, the applicable accounting standard as notified under section 211(3C) of the Companies Act, 1956, of India (the "Act") and the relevant provisions of the Act.

b) Inventories

Inventories are valued at lower of cost and net realisable value.

Cost of raw materials, packing materials, stores, spares and tools are computed on a weighted average basis.

Cost of work-in-progress/ finished goods are determined on weighted average basis comprising material, labour and related factory overheads.

c) Revenue Recognition

Sale of Goods

Revenue is recognised when the property and all significant risks and rewards of ownership are transferred to the buyer or no significant uncertainty exists regarding the amount of consideration that is derived from the sale of goods. Sales are accounted net of trade discount, rebates and sales tax.

In respect of sale transaction involving installation/ commissioning services, the composite revenue is recognised based on transfer of significant risks and rewards.

Sale of Services

Service income is recognised on completion of rendering of services and is recorded net of service tax. Cost incurred during the pendency of the contract is carried forward as job in progress.

Others

Other income is accounted on accrual basis except where receipt of income is uncertain. Commission income is recorded on the basis of confirmation received.

d) Fixed Assets and Depreciation/ Amortisation

i) Fixed assets are stated at historical cost less depreciation / amortisation. Cost includes all expenses relating to acquisition and installation of the concerned assets.

ii) Self constructed assets are stated at cost of construction relating directly to the specific asset and other costs attributable to the construction activity.

iii) Depreciation on all assets is provided on a straight line method at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956 except in respect of the following:

Assets acquired after April 1, 2004, costing more than Rs. 5,000 and upto Rs. 299,050 (equivalent to EURO 5,000) are depreciated pro-rata over the period of 12 months.

Computer software is capitalised and amortised on a straight – line basis over its useful life, which is estimated as three years.

With effect from October 1, 2009, the ‘New Generation Technical Know-How is amortised over revised period of 2 years as estimated by the Management.

iv) Depreciation of Assets acquired during the year is being provided on pro-rata basis from the date of acquisition.

e) Foreign Currency Transactions

Foreign currency transactions are accounted at the exchange rates prevailing on the date of the transaction. Gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies are recognised in the Profit and Loss Account.

f) Investments

Long term investments are stated at cost less diminution in value which is other than temporary.

g) Employee Benefits

i) Short Term Employee Benefits:

The employees of the Company are entitled to leave encashment as per the leave policy of the Company. The liability in respect of leave encashment of short term nature is provided, based on an actuarial valuation carried out by an independent actuary as at the year end.

ii) Long Term Employee Benefits:

Defined Contribution Plans

The Company has Defined Contribution plans for post employment benefits namely Provident Fund and Superannuation Fund.

The Company contributes to a Government administered Provident Fund and has no further obligation beyond making its contribution.

The Company makes contributions to state plans namely Employees State Insurance Fund and Employees Pension Scheme 1995 and has no further obligation beyond making the payment to them.

The Companys contributions to the above funds are charged to Profit and Loss Account every year.

Defined Benefit Plans

Liability for Defined Benefit plans (except for Provident fund which is charged based on contributions) is provided on the basis of valuations, as at the Balance Sheet date, carried out by an independent actuary. The actuarial valuation method used for measuring the liability is the Projected Unit Credit method. The obligations are measured as the present value of estimated future cashflows discounted at rates reflecting the prevailing market yields of Indian Government securities as at the Balance Sheet date for the estimated term of the obligations. The estimate of future salary increases considered takes into account the inflation, seniority, promotion and other relevant factors. The expected rate of return of plan assets is the Companys expectation of the average long term rate of return expected on investments of the fund during the estimated term of the obligations. Plan assets are measured at fair value as at the Balance Sheet date. The liability for leave encashment and compensated absenses is provided on the basis of valuation, as at Balance Sheet date, carried out by an independent actuary.

The Company has partly funded the same through a Group Gratuity scheme with Life Insurance Corporation of India (LIC), SBI Life Insurance and deposit with State Bank of India.

iii) Termination benefits are recognised as an expense as and when incurred.

iv) Actuarial gains and losses comprise experience adjustments and the effects of changes in actuarial assumptions and are recognised immediately in the Profit and Loss Account as income or expense.

h) Borrowing Costs

Borrowing costs that are attributable to the acquisition, construction or production of qualifying assets are capitalised as part of the cost of such assets till the assets is put to use. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use. All other borrowing costs are recognised as expense in the period in which they are incurred.

i) Operating Leases

Lease Income

Lease rentals in respect of operating lease arrangements are recognised in Profit and Loss Account in accordance with Accounting Standard – 19 "Leases". Costs, including depreciation, incurred in earning the lease income are recognised as expenses.

Lease Expense

Assets acquired as leases where a significant portion of the risks and rewards of the ownership are retained by the lessor are classified as Operating Leases. Lease rentals are charged to Profit and Loss Account on an accrual basis.

j) Taxes on Income

Provision for tax for the year is made on the assessable income at the tax rate applicable to the relevant assessment year.

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

k) Warranty

A provision is recognised for expected warranty claims on products sold during the last one year, based on past experience of level of repairs and returns. Assumptions used to calculate the provision for warranties were based on current sales level and current information available about returns.

l) Impairment of Assets

The Company assesses at each Balance Sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. The recoverable amount is higher of the assets net selling price or estimated future cash flows which are discounted to their present value based on appropriate discount rates. If such recoverable amount of the asset or recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognised in the Profit and Loss Account. If at the Balance Sheet date there is an indication that if a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount.

m) Provision for Contingent Liabilities

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

n) Accounting Estimates

The preparation of financial statements requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of financial statements and the reported amounts of revenue and expenses during the reporting period. Difference between the actual results and the estimates are recognised in the period in which the results are known/ materialised.


Dec 31, 2009

1. METHOD OF ACCOUNTING

1.1 Basis of Preparation of Financial Statements

These financial statements have been prepared under the historical cost convention from the books of account maintained on accrual basis which is in conformity with accounting principles generally accepted in India, relevant provision of the Companies Act, 1956 and the mandatory Accounting Standards as specified in the (Accounting Standards) Rules, 2006, prescribed by the Central Government.

1.2 Use of estimates

The preparation of financial statements are in conformity with Generally Accepted Accounting Policy (GAAP) which requires the management to make estimates and assumptions that affect the reported amount of assets & liabilities and disclosures of contingent assets and liabilities as at the date of financial statements and reported amount of revenues and expenses during the reported period. Actual results could differ from those estimates. Any revision to accounting estimates is recognised in the current and future periods.

2. FIXED ASSETS

2.1 All tangible/intangible assets are stated at cost less depreciation.

2.2 Self constructed assets are stated at cost of construction relating directly to the specific asset and other costs attributable to the construction activity.

3. DEPRECIATION/AMORTIZATION

3.1 Depreciation has been provided under the "Straight-Line Method (SLM)" in accordance with the provisions of Section 205(2)(b) of the Companies Act, 1956.

3.2 Depreciation on all assets acquired before 2nd April, 1987 is provided at SLM rates of depreciation corresponding to the rates as per Income-tax Rules prevalent at the time of acquisition of the assets in accordance with Circular No.l of 1986 (1/1/86-CI-V) dated 21st May, 1986 of the Company Law Board.

3.3 Depreciation on all assets acquired on or after 2nd April, 1987 is provided at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956 except in respect of the following (such rates not being lower than the rates prescribed under Schedule XIV):-

3.3.1 Plant and Machinery relating to Graphics Segment are depreciated over the useful life of the same as determined by the management.

3.3.2 Assets acquired after 1st April 2004, costing more than Rs 5,000 and upto EURO 5,000 (equivalent Rs 318,500/- @ Rs 63.70 per EURO) are depreciated pro-rata over the period of 12 months

3.3.3 Patterns are written off over a period of three years.

3.3.4 Cost of Computer Software is amortised over a period of three years.

3.3.5 With effect from 1st October 2009, the "New Generation Technical Know-How is amortised over revised period of 2 years as estimated by the management. (Also refer note 4 to part II of Schedule T)

3.4 Extra Shift depreciation is provided on "Segment" basis.

4. IMPAIRMENT OF ASSETS

At each balance sheet date, the Company reviews the carrying amounts of its fixed assets to determine whether there is any indication that those assets suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of impairment loss. In assessing the value in use, the estimated future cash flows expected from the continuing use of the asset and from its disposal are discounted to their present value using pre tax discount rate that reflects the current market assessments of time value of money and the risks specific to the assets.

5. INVESTMENTS

Long term investments are stated at cost less diminution in value which is other than temporary.

6. INVENTORIES

6.1 Raw & packing materials and stores, spares & tools are valued at cost or net realisable value whichever is less. Cost is computed on a weighted average basis, after providing for the cost of obsolescence.

6.2 The work in progress/finished goods inventories are valued at lower of cost and net realisable value.

6.3 The work in progress/finished goods are determined on average cost basis considering material, labour and related factory overheads.

7. FOREIGN CURRENCY TRANSACTIONS

7.1 Transactions in foreign currency are recorded at the respective exchange rate prevailing on the date of transactions. Assets/liabilities denominated in foreign currency are restated using the closing rate.

7.2 Exchange differences arising on year end conversion or actual realisation/payment are recognized as income or expense in the period in which they arise, including the exchange difference related to acquisition of fixed assets from a country outside India.

8. REVENUE RECOGNITION

8.1 Sales are recognised on dispatch of goods and are-recorded net of trade discount, rebates and sales tax.

8.2 In respect of sale transaction involving installation/commissioning services, the composite revenue is recognised based on dispatch of machinery. Necessary provision based on management estimates are made for the cost to be incurred for the installation and commissioning service.

8.3 Service income is recognised on completed service contract method when complete services are rendered and are recorded net of service tax. Cost incurred during the pendency of the contract is carried forward as job in progress.

8.4 Other income is accounted on accrual basis except where receipt of income is uncertain.

8.5 Commission income is booked on the basis of confirmation received.

9. EMPLOYEE BENEFITS

9.1 Company is having Group Gratuity cum-Life Insurance Scheme with Life Insurance Corporation of India (LIC of India), for future payment of Gratuity to retiring employees. Additional provision is made for shortfall between liability as per actuarial valuation and the amount funded with LIC of India.

9.2 Liability for leave encashment is actuarially determined and provided on accrual basis.

9.3 Employee benefits in the form Provident Fund, Family Pension Fund and Superannuation Schemes, which are defined contribution schemes, are charged to Profit and Loss Account of the year when the contributions to the respective funds accrue.

10. BORROWING COST

Borrowing cost attributable to the acquisition or construction of qualifying assets is capitalised as part of the cost of that assets. Other borrowing costs are recognised as an expense in the period in which they are incurred.

11. OPERATING LEASE

11.1 Lease Income

Lease rentals in respect of Operating Lease arrangements are recognised in Profit & Loss Account in accordance with AS - 19 " Leases". Costs, including depreciation, incurred in earning the lease income are recognised as expenses.

11.2 Lease Expense

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item are classified as Operating Leases. Operating Lease payments are recognised as an expense in the Profit & Loss Account on a straight line basis over the lease period.

12. TAXATION

12.1 Provision for Current Tax has been determined on the basis of relief and deduction available under the Income Tax Act, 1961.

12.2 The deferred tax for timing difference between the books and tax profits for the year is accounted for, using the tax rates and laws that have been substantively enacted as of the balance sheet date. Deferred tax asset other than on unabsorbed losses are realized only when there is reasonable certainty of their realization. Deferred tax asset on unabsorbed tax losses and unabsorbed tax depreciation and carried forward losses are recognized only when there is virtual certainty that this would be realized in future.

13. EXCISE / CUSTOM DUTY ON UNCLEARED GOODS

13.1 Excise duty on manufactured goods lying in the factory premises as at year end are provided for in the accounts and corresponding amount is included in the valuation of inventories.

13.2 Customs duty in respect of goods lying in customs bonded warehouse is accounted at the time of clearance of goods.

14. SEGMENT REPORTING

Segments have been identified taking into account the nature of the products, geographical locations, the differing risk and returns, the organisation structure and internal reporting system. The accounting principles consistently used in the preparation of the financial statements are also consistently applied to record income and expenditure in individual segments.

15. PROVISIONS AND CONTINGENT LIABILITIES

15.1 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.

15.2 Contingent liabilities are disclosed when the Company has a possible obligation or a present obligation and it is probable that a cash outflow will not be required to settle the obligation.

16. DEFERRED REVENUE EXPENDITURE

Compensation to employees under Voluntary Retirement Schedule/Retrenchment is written off in the year of payment.

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