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Accounting Policies of Super Tannery Ltd. Company

Mar 31, 2015

1.1 Basis of Preparation of Financial Statements

The financial statements are prepared in accordance with the GAAP in India under the historical cost convention, except for certain fixed assets which were revalued, on accrual basis of accounting in accordance with the applicable Accounting Standards as prescribed under Section 133 of the Companies Act, 2013 ('Act') read with rule 7 of the Companies (Accounts) Rules, 2014, the provisions of the Act (to the extent notified) and other accounting principles generally accepted in India, to the extent applicable.

1.2 Use of Estimates

The preparation of financial statements in conformity with Indian GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities on the date of financial statements and the reported amount of revenues and expenses during the reported period. Difference between actual results and estimates are recognized in the period in which the results are known/ materialised.

1.3 Fixed Assets

Fixed Assets, other than those revalued, are stated at their cost of acquisition or construction as the case may be and including all related acquisition/installation expenses and borrowing cost as per Accounting Standard (AS) 16. Subsidy received on Fixed Assets is credited to the cost of respective fixed assets. Assets revalued are stated at their revalued amount. Cost/revalued amount so ascertained is adjusted for accumulated depreciation/amortization and provision for impairment.

1.4 Depreciation

Depreciation on Fixed Assets is provided on 'Straight Line Method' in accordance with the provisions of Schedule II to the Companies Act, 2013 except for leasehold land and intangible assets. Leasehold Land is amortised over the period of lease. Depreciation attributable to appreciation due to revaluation of fixed assets (other than leasehold land) is provided over the remaining useful life of the asset in accordance with Schedule II to the Companies Act, 2013 and equivalent amount is withdrawn from Revaluation Reserve and credited to Statement of Profit and Loss. In case of impaired assets, depreciation is charged on the adjusted cost net of impairment. Intangible Assets are amortised over a period of ten years under the straight line method of amortisation.

1.5 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. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs is less than the carrying amount, the carrying amount is reduced to the recoverable amount. The reduction is treated as an impairment loss and is recognized in the Statement of Profit and Loss. If at the balance sheet date there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount.

1.6 Capital work in progress

Capital Work in Progress comprises cost of fixed assets yet to be commissioned and/or in transit, borrowing cost and incidental expenditure during construction period. Expenditure during construction period is allocated to the respective Fixed Assets on completion of the construction period.

1.7 Investments

Long term investments (non current) are carried at cost and provision, if necessary, is made for decline other than temporary in their value. Current investments are carried at lower of cost and market/fair value.

1.8 Inventories

Stock of raw materials and chemicals are valued at lower of cost (weighted average) or net realizable value. Stores and spares are valued at lower of cost (FIFO basis) or net realizable value. Stock of work in process is valued at estimated cost. Finished goods (including stock in transit or at port) are valued at lower of cost (determined on Direct cost method) or net realizable value. Stock of trading items is valued at lower of cost (weighted average) or net realizable value. Stock of waste and scrap are valued at estimated realizable value. Stock transferred to other divisions of the company is valued at transfer price. Import entitlements/licenses are valued at estimated realizable value.

1.9 Provisions, Contingent Liabilities and Contingent Assets

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

1.10 Revenue Recognition

i) Sales are recognized in respect of (a) Exports on shipment of consignment; and (b) others on dispatches of consignment from company premises. Sales are inclusive of excise duty but net of sales tax, returns and discounts.Duty Drawback is accounted for on the basis of export sales effected during the year.

ii) Revenue is accounted for on accrual basis when its collection or receipt is reasonably certain.

iii) All expenses are accounted for on accrual basis. However the claims are recognised on settlement.

1.11 Government Grants

Capital subsidy received under Tannery Modernisation Scheme (TMS) is credited to Capital Reserve. Revenue Grants are recognized in the Statement of Profit & Loss in accordance with the related Scheme and in the period in which those accrued.

1.12 Retirement Benefits

Contributions are made to the Provident Fund and Superannuation Funds on actual liability basis. Provision for gratuity liability is made at the end of the year on the basis of actuarial valuation . Provision for leave encashment is made on the basis of total liability of all eligible employees as per the company's scheme.

1.13 Foreign Currency Translations

i) The reporting currency of the company is Indian rupees.

ii) Outstanding foreign currency assets and liabilities are translated at the exchange rate prevailing at the Balance Sheet date. Gains or losses on these assets and liabilities relating to the acquisition of fixed assets are adjusted to the cost of such fixed assets and those relating to other accounts are recognized in the statement of profit and loss. Exchange Difference arising as a result of transactions settled during financial year are included in sales.

1.14 Intangible Assets

Intangible assets are stated at cost of acquisition less accumulated amortization and accumulated impairement losses (if any).

1.15 Earning Per Share (EPS)

Earning per share is calculated in accordance with the procedure laid out in AS-20 on Earning Per Share.

1.16 Excise Duty

Excise duty is accounted for as and when paid on clearance of goods from bounded premises. No provision is made for excise duty in respect of finished products lying in bounded premises since major sales comprises of export sales.

1.17 Borrowing Cost

Borrowing costs that are attributable to the acquisition/construction of qualifying assets are capitalized as part of cost of such assets. A qualifying asset is an asset that requires a substantial period of time to get ready for its intended use. All other borrowing costs are recognized as an expense in the period in which they are incurred.

1.18 Taxation

Provision for tax on income for the year (i.e. Current Tax) is made after considering the various deductions/reliefs admissible under the Income Tax Act, 1961. Provision for tax effect of timing differences between taxable income and accounting income (i.e. Deferred Tax) is made in accordance with the provisions of AS-22 on Accounting for Taxes on Income.

1.19 Prior Period Items

Prior period items, if material, are disclosed separately.

1.20 Cash Flow Statement

Cash flow statement is prepared in accordance with the "Indirect Method" prescribed in AS -3 on Cash Flow Statements.


Mar 31, 2014

1.1 Basis of Preparation of Financial Statements

The financial statements are prepared under the historical cost convention, except for certain fixed assets which were revalued, on accrual basis of accounting in accordance with the applicable Accounting Standards as prescribed by the Companies (Accounting Standard) Rules, 2006 (AS), Generally Accepted Accounting Principles (GAAP) in India and the relevant provisions of the Companies Act, 1956 (the Act).

1.2 Use of Estimates

The preparation of financial statements in conformity with Indian GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities on the date of financial statements and the reported amount of revenues and expenses during the reported period. Difference between actual results and estimates are recognized in the period in which the results are known/ materialised.

1.3 Fixed Assets

Fixed Assets, other than those revalued, are stated at their cost of acquisition or construction as the case may be and including all related acquisition/installation expenses and borrowing cost as per Accounting Standard (AS) 16. Subsidy received on Fixed Assets is credited to the cost of respective fixed assets. Assets revalued are stated at their revalued amount. Cost/revalued amount so ascertained is adjusted for accumulated depreciation/amortization and provision for impairment.

1.4 Depreciation

i) Depreciation on fixed assets excepting leasehold land and intangible assets is provided as under:

a) Assets acquired and put to use on or upto 31st March, 1992, is provided on Written Down Value Method as per Schedule XIV to the Companies Act, 1956;

b) Assets acquired and put to use after 31st March, 1992, is provided on Straight Line Method as per Schedule XIV to the Companies Act, 1956; and

c) Amount attributable to appreciation due to revaluation, is provided on Straight Line Method as per Schedule XIV to the Companies Act, 1956 and equivalent amount is withdrawn from Revaluation Reserve.

ii) Cost of lease land is amortized over the period of lease. Intangible assets are amortised over a period of ten years under the straight line method of amortization.

1.5 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. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs is less than the carrying amount, the carrying amount is reduced to the recoverable amount. The reduction is treated as an impairment loss and is recognized in the Statement of Profit and Loss. If at the balance sheet date there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount.

1.6 Capital work in progress

Capital Work in Progress comprises cost of fixed assets yet to be commissioned and/or in transit, advances for capital expenditure and expenditure during construction period. Expenditure during construction period is allocated to the respective Fixed Assets on completion of the construction period.

1.7 Investments

Long term investments (non current) are carried at cost and provision, if necessary, is made for decline other than temporary in their value. Current investments are carried at lower of cost and market/fair value.

1.8 Inventories

Stock of raw materials and chemicals are valued at lower of cost (weighted average) or net realizable value. Stores and spares are valued at lower of cost (FIFO basis) or net realizable value. Stock of work in process is valued at estimated cost. Finished goods (including stock in transit or at port) are valued at lower of cost (determined on Direct cost method) or net realizable value. Stock of trading items is valued at lower of cost (weighted average) or net realizable value. Stock of waste and scrap are valued at estimated realizable value. Stock transferred to other divisions of the company is valued at transfer price. Import entitlements/licenses are valued at estimated realizable value.

1.9 Provisions, Contingent Liabilities and Contingent Assets

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

1.10 Revenue Recognition

Sales are recognized in respect of (a) Exports on shipment of consignment; and (b) others on dispatches of consignment from company premises. Sales include Excise duty and Sales/Trade tax. Duty Drawback is accounted for on the basis of export sales effected during the year.

1.11 Government Grants

Capital subsidy received under Tannery Modernisation Scheme (TMS) is credited to Capital Reserve. Revenue Grants are recognized in the Statement of Profit & Loss in accordance with the related Scheme and in the period in which those accrued.

1.12 Retirement Benefits

Contributions are made to the Provident Fund and Superannuation Funds on actual liability basis. Provision for gratuity liability is made at the end of the year on the basis of actuarial valuation . Provision for leave encashment is made on the basis of total liability of all eligible employees as per the company''s scheme.

1.13 Foreign Currency Translations

i) The reporting currency of the company is Indian rupees.

ii) Outstanding foreign currency assets and liabilities are translated at the exchange rate prevailing at the Balance Sheet date. Gains or losses on these assets and liabilities relating to the acquisition of fixed assets are adjusted to the cost of such fixed assets and those relating to other accounts are recognized in the statement of profit and loss. Exchange Difference arising as a result of transactions settled during financial year are included in sales.

1.14 Intangible Assets

Intangible assets are stated at cost of acquisition less accumulated amortization. The Computer Software if any, purchased during the year is being amortized over a period of ten years.

1.15 Earning Per Share (EPS)

Earning per share is calculated in accordance with the procedure laid out in AS-20 on Earning Per Share.

1.16 Excise Duty

Excise duty is accounted for as and when paid on clearance of goods from bounded premises. No provision is made for excise duty in respect of finished products lying in bounded premises since major sales comprises of export sales.

1.17 Borrowing Cost

Borrowing costs that are attributable to the acquisition/construction of qualifying assets are capitalized as part of cost of such assets. A qualifying asset is an asset that requires a substantial period of time to get ready for its intended use. All other borrowing costs are recognized as an expense in the period in which they are incurred.

1.18 Taxation

Provision for tax on income for the year (i.e. Current Tax) is made after considering the various deductions/relieves admissible under the Income Tax Act, 1961. Provision for tax effect of timing differences between taxable income and accounting income (i.e. Deferred Tax) is made in accordance with the provisions of AS-22 on Accounting for Taxes on Income.

1.19 Prior Period Items

Prior period items, if material, are disclosed separately.

1.20 Cash Flow Statement

Cash flow statement is prepared in accordance with the "Indirect Method" prescribed in AS -3 on Cash Flow Statements.

2.1 Term/rights attached to equity shares

The company has only one class of equity shares having a par value of Re. 1/- per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

2.2 Bonus Shares/Shares for consideration other than cash issued & Buy Back of shares during preceding five years:

Bonus Shares issued during No. of Shares preceding five F.Y.

Financial Year 2009-10 1,79,95,560 (equity shares of Rs. 2/- each fully paid ratio 1:2)

2.3 Face Value of Equity Shares-sub division / split in preceding five years:

At the annual general meeting held on 30th September 2010, the members of company approved a stock split i.e. sub-division each equity share of the company of the face value of Rs. 2/- each as existing on Record Date, shall stand sub-divided into two equity shares of face value of Re. 1/- each fully paid up, and consequently the Authorized and Paid up Equity Share Capital of the company be changed accordingly.

3.1 Corporate loan (INR) from bank carries interest @ 13.70% p.a. The loan is repayable in 10 regular installments detailed as under:- a) Next 4 installments of Rs. 1 crore each (From 30.06.2014 to 31.03.2015)

d) Last 2 installment of Rs. 2 crore each.( on 30.06.2015 and 30.09.2015)

3.2 Vehicles Loans are repayable in equated monthly instalments ranging from 36 to 83 EMIs.

3.3 The corporate loan is secured by first charge over entire fixed assets (both present and future, except vehicles financed by other Banks/FIs) of the Company, extension of charge on current assets of the Company, corporate guarantee of a subsidiary Aarifi Tanners Limited. Loans are further secured by the personal guarantee of promoter director(s) and by way of pledge of their shares (as given hereunder) with

4.1 Working Capital Loan from State Bank of India is secured by hypothecation of Inventories & Book Debts, extension of charge on entire fixed assets (both present & future) of the Company and corporate guarantee of a subsidiary Aarifi Tanners Limited. Loans are further secured by the personal guarantee of promoter director(s) and by way of pledge of their shares (as given hereunder) with State Bank of India :

5.1 The company has requested confirmation from Suppliers regarding their registration (filling of Memorandum) under the Micro, Small and Medium Enterprises Development Act, 2006 (the Act). According to the information available with the company there was no amount (principal and/or interest) due to any micro/small enterprises (SME as defined in the Act) as at the end of the year. There is no delay in payment to SME during the year. No interest was paid/payable on account of delay in payment to SME during the year in terms of Section 16 of the Act.

6.1 There are no amounts due for payment to Investor Education & Protection Fund under Section 205C of the Companies Act, 1956 as at the year end.

In respect of items which are purchased both from indigenous and imported sources, the identity of individual items consumed cannot be established but segregation of consumption between imported and indigenous sources has been made on a reasonable approximation determined from the Company''s records.


Mar 31, 2012

1.1 Basis of Preparation of Financial Statements

The financial statements are prepared under the historical cost convention, except for certain fixed assets which were revalued, on accrual basis of accounting in accordance with the applicable Accounting Standards issued by the Institute of Chartered Accountants of India (ICAI), generally accepted accounting principles (GAAP) in India and the relevant provisions of the Companies Act, 1956

1.2 Use of Estimates

The preparation of financial statements inconformity with Indian GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities on the date of financial statements and the reported amount of revenues and expenses during the reported period. Difference between actual results and estimates are recognized in the period in which the results are known/ materialised

1.3 Fixed Assets

Fixed Assets, other than those revalued, are stated at their cost of acquisition or construction as the case may be and including all related acquisition/installation expenses and borrowing cost as per Accounting Standard (AS) 16. Subsidy received on Fixed Assets is credited to the cost of respective fixed assets. Assets revalued are stated at their revalued amount. Cost/revalued amount so ascertained is adjusted for accumulated depreciation/amortization and provision for impairment.

1.4 Depreciation

i) Depreciation on leased out assets, is provided on Straight Line Method over the tenure of lease agreement. Cost of lease hold land is amortized over the period of lease. Intangible assets are written off over a period often years under the straight line method of amortization.

ii) Depreciation on fixed assets excepting on leased out assets and intangible assets, as stated above

iii) Assets acquired and put to use on or upto 31* March, 1992, is provided on Written Down Value Method as per Schedule XIV to the Companies Act, 1956

iv) Assets acquired and put to use on or after 1st April 1992, is provided on Straight Line Method as per Schedule XIV to the Companies Act, 1956 and

v) Amount attributable to appreciation due to revaluation, is provided on Straight Line Method as per Schedule XIV to the Companies Act, 1956 and equivalent amount is withdrawn from Revaluation Reserve

1.5 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. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs is less than

the carrying amount, the carrying amount is reduced to the recoverable amount. The reduction is treated as an impairment loss and is recognized in the Profit and Loss Account. If at the balance sheet date there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount.

1.6 Capital work in progress

Capital Work in Progress comprises cost of fixed assets yet to be commissioned and/or in transit, advances for capital expenditure and expenditure during construction period. Expenditure during construction period is allocated to the respective Fixed Assets on completion of the construction period.

1.7 Investments

Long term investments are carried at cost and provision, if necessary, being made for decline other than temporary in their value.

1.8 Inventories

Stock of raw materials and chemicals are valued at lower of cost (weighted average) or net realizable value. Stores and spares are valued at lower of cost (FIFO basis) or net realizable value. Stock of work in process is valued at estimated cost. Finished goods (including stock in transit or at port) are valued at lower of cost (determined on Direct cost method) or net realizable value. Stock of trading items is valued at lower of cost (weighted average) or net realizable value. Stock of waste and scrap are valued at estimated realizable value. Stock transferred to other divisions of the company is valued at transfer price. Import entitlements/licenses are valued at estimated realizable value.

1.9 Provisions, Contingent Liabilities and Contingent Assets

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

1.10 Revenue Recognition

Sales are recognized in respect of (a) Exports on shipment of consignment; and (b) others on dispatches of consignment from company premises. Sales include Excise duty and Sales/Trade tax. Duty Drawback is accounted for on the basis of export sales effected during the year.

1.11 Retirement Benefits

Contributions are made to the Provident Fund and Superannuation Funds on actual liability basis. Provision for gratuity liability is made at the end of the year on the assumption that it is payable to all eligible employees. Provision for leave encashment is made on the basis of total liability of all eligible employees as per the company's scheme

1.12 Foreign Currency Translations

i) The reporting currency of the company is Indian rupees

ii) Outstanding foreign currency assets and liabilities other than investments are translated at the exchange rate prevailing at the Balance Sheet date. Gains or losses on these assets and liabilities relating to the acquisition of fixed assets are adjusted to the cost of such fixed assets and those relating to other accounts are recognized in the Foreign Currency Translation Reserve. Exchange Difference arising as a result of transactions settled during financial year are included in sales

iii) Investments in wholly owned subsidiaries are carried in Balance sheet at the rates prevailing on the dates of transactions

1.13 Intangible Assets

Intangible assets are stated at cost of acquisition less accumulated amortization. The Computer Software if any, purchased during the year is being amortized over a period often years.

1.14 Earning Per Share

Earning per share is calculated in accordance with the procedure laid out in the relevant Accounting Standard (AS) 20 issued by the institute of Chartered Accountants of India.

1.15 Excise Duty ,

Excise duty is accounted for as and when paid on clearance of goods from bounded premises. No provision is made for excise duty in respect of finished products lying in bounded premises.

1.16 Borrowing Cost

Borrowing costs that are attributable to the acquisition/construction of qualifying assets are capitalized as part of cost of such assets. A qualifying asset is an asset that requires a substantial period of time to get ready for its intended use. All other borrowing costs are recognized as an expense in the period in which they are incurred.

1.17 Taxation

Provision for tax on income for the year (i.e. Current Tax) is made after considering the various deductions/relieves admissible under the Income Tax Act, 1961. Provision for tax effect of timing differences between taxable income and accounting income (i.e. Deferred Tax) is made in accordance with the provisions of Accounting Standard 22, "Accounting for Taxes on Income" (AS-22) issued by the Institute of Chartered Accountants of India.

1.18 Prior Period Items

Prior period items, if material, are disclosed separately.


Mar 31, 2010

1. SYSTEM OF ACCOUNTING

The Accounts are prepared on accrual basis under historical cost convention and to comply in all materia! aspects with applicable accounting principles in India, Accounting Standards notified by the Central Government under The Companies (Accounting Standard) Rules, 2006 and the relevant provisions of the Companies Act, 1956.

2. INVENTORIES

Stock of raw materials and chemicals are valued at lower of cost (weighted average) or net realizable value. Stores and spares are valued at lower of cost (FIFO basis) or net realizable value. Stock of work in process is valued at estimated cost. Finished goods (including stock in transit 6r at port) are valued at lower of cost (determined on Direct cost method) or net realizable value. Stock of trading items is valued at lower of cost (weighted average) or net realizable value. Stock of waste and scrap are valued at estimated realizable value. Stock transferred to other divisions of the company is valued at transfer price. Import entitlements/licenses are valued at estimated realizable value.

3. INVESTMENTS

Long term investments are carried at cost and provision, if necessary, being made for decline other than temporary in their value.

4. FIXED ASSETS

Fixed Assets, Other than those revalued are stated at their cost of acquisition or construction as the case may be, and including all related acquisition/installation expenses and borrowing cost as per accounting standard (AS) 16. Subsidy received on fixed assets is credited to the cost of respective fixed assets. Assets revalued are stated at their revalued amount. Cost/revalued amount so ascertained is adjusted for accumulated depreciation/amortization and provision for impairment.

5. DEPRECIATION

a. Depreciation on leased out assets, is provided on Straight Line Method over the tenure of lease agreement. Cost of lease hold land is amortized over the period of lease. Intangible assets are written off over a period of ten years under the straight line method of amortization.

b. Depreciation on fixed assets excepting on leased out assets and intangible assets, as stated above :

c. Assets acquired and put to use on or upto 31.03.92, is provided onWritten Down Value Method as per Schedule XIV to the Companies Act, 1956;

d. Assets acquired and put to use on or after 1st April 1992, is provided on Straight Line Method as per Schedule XIV to the Companies Act, 1956 and -

e. Amount attributable to appreciation due to revaluation, is provided on Straight Line Method as per Schedule XIV to the Companies Act, 1956 and equivalent amount is withdrawn from Revaluation Reserve.

6. CAPITAL WORK IN PROGRESS

Capital Work in Progress comprises cost of fixed assets yet to be commissioned and/or in transit, advances for capital expenditure and expenditure during construction period. Expenditure during construction period is allocated to the respective Fixed Assets on completion of the construction period.

7. FOREIGN EXCHANGE TRANSLATION / TRANSACTIONS :

a. The reporting currency of the Company is Indian rupees.

b. Outstanding foreign currency assets and liabilities other than Investments are translated at the exchange rate prevailing at the Balance Sheet date. Gains or losses on these assets and liabilities relating to the acquisition of fixed assets are adjusted to the cost of such fixed assets and those relating to other accounts are recognized in the Foreign Currency Translation Reserve. Exchange Difference arising as a result of transactions settled during financial year are included in sales.

c. Investments in wholly owned subsidiaries are carried in Balance Sheet at the rates prevailing on the date of transactions.

8. REVENUE RECOGNITION

Sales are recognized in respect of (a) Exports on shipment of consignment; and (b) others on dispatches of consignment from company premises. Sales include excise duty and -Sales/Trade tax. Duty Drawback is accounted for on the basis of export sales effected during the year.

9. RETIREMENT BENEFITS

Contributions are made to the Provident Fund and Superannuation Funds on actual liability basis. Provision for gratuity liability is made at the end of the year on the assumption that it is payable to all eligible employees. Provision for leave encashment is made on the basis of total liability of all eligible employees as per the companys scheme.

10. INTANGIBLE ASSETS :

Intangible assets are stated at cost of acquisition less accumulated amortization. The Computer Software if any purchased during the year is being amortized over a period of six years.

11. EXCISE DUTY

Excise duty is accounted for as and when paid on clearance of goods from bounded premises. No provision is made for excise duty in respect of finished products lying in bounded premises.

12. BORROWING COST

Borrowing costs that are attributable to the acquisition/construction of qualifying assets are capitalized as part of cost of such assets. A qualifying asset is an asset that requires a substantial period of time to get ready for its intended use. All other borrowing costs are recognised as an expense in the period in which they are incurred.

13. TAXES ON INCOME

Provision for tax on income for the year (i.e. Current Tax) is made after considering the various deductions/relieves admissible under the Income Tax Act, 1961. Provision for tax effect of timing differences between taxable income and accounting income (i.e. Deferred Tax) is made in accordance with the provisions of Accounting Standard 22, "Accounting for Taxes on Income" (AS-22) issued by the Institute of Chartered Accountants of India.

14. PROVISION, CONTINGENT LIABILITY & CONTINGENT ASSETS

Provisions involving substantia! degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the Notes. Contingent Assets are neither recognized nor disclosed in the financial statements.

15. 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. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs is less than the carrying amount, the carrying amount is reduced to the recoverable amount. The reduction is treated as an impairment loss and is recognized in the Profit and Loss Account. If at the balance sheet date there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount.

16. EARNING PER SHARE

Earning per share is calculated in accordance with the procedure laid out in the relevant Accounting Standard (AS) 20 issued by the institute of Chartered Accountants of India.

17. Prior period items, if material, are shown separately.

 
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