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Accounting Policies of Tanfac Industries Ltd. Company

Mar 31, 2016

SIGNIFICANT ACCOUNTING POLICIES

a. Basis for Preparation of Financial Statements:

The Financial Statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP), including the Accounting Standards notified under the relevant provisions of The Companies Act, 2013.

The Financial Statements have been prepared as a going concern on accrual basis under the historical cost convention.

The Accounting Policies adopted in the preparation of the Financial Statements are consistent with those followed in the previous year.

b. Use of Estimates:

The preparation of the Financial Statements in conformity with Indian GAAP requires the management to make estimates and assumptions considered in the reported amounts of Assets and Liabilities (including contingent liabilities) and the reported Income and Expenses during the year. Management believes that the estimates used in preparation of the Financial Statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and estimates are recognized in the periods in which the results are known.

c. Fixed Assets (Tangible and Intangible) :

Fixed Assets are recorded at cost of acquisition or construction including any directly attributable expenditure on making the asset ready for its intended use, net of CENVAT and/or Value Added Tax less Accumulated Depreciation, Amortization and Impairment loss, if any.

d. Capital Work-in-Progress:

Projects under which tangible Fixed Assets are not yet ready for their intended use are carried at cost, including direct cost and related expenses.

e. Impairment of Fixed Assets:

The carrying amounts of assets are reviewed at the Balance Sheet date, if there is any indication of impairment based on external / internal factors.

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

f. Depreciation:

Depreciation on Fixed Assets has been provided as per the useful life prescribed in Schedule II to the Companies Act, 2013 as follows:

i) Leasehold land is being amortized over the lease period.

ii) Depreciation in respect of Buildings and Plant and Machinery has been provided on Straight Line Method from the date of acquisition / installation.

iii) Depreciation on all other assets other than Building and Plant & Machinery has been provided on Written Down Value method

iv) In case of impairment, if any, depreciation is provided on the revised carrying amount of the assets over its remaining useful life subject to following deviation:

i) Useful life of IBAP plant has been considered as technically assessed which is less than the period prescribed under Schedule II to the Companies Act 2013.

g. Investments:

Current Investments are carried at lower of cost and quoted / fair value. Investment that are intended to be held for more than a year, from the date of acquisition, are classified as Noncurrent investments and are carried at cost. However, provision for diminution in value of investments is made to recognize a decline, other than temporary, in the value of investments.

h. Inventories:

Inventories are valued on the following basis:

i) Finished Goods - At cost (calculated on weighted average Method) or net realizable value whichever is lower

ii) Material in Process - At cost.

iii) Waste - At actual realizable value.

iv) Raw Materials / Stores & Spare Parts - At cost or Net Realizable Value whichever is lower.

i. Cash Flow Statement:

Cash flows are reported using the indirect method, whereby profit or loss before extraordinary items and tax is adjusted for the effects of transactions on noncash nature and any deferrals or accruals of past / future cash receipts of payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

j. Foreign Currency Transactions:

Foreign currency transactions are recorded on the basis of exchange rate prevailing at the date of the transaction.

Foreign currency monetary items are restated at the year end closing rate. Non monetary items which are carried at historical cost are reported using the exchange rate prevailing at the date of the transaction.

The exchange differences arising on settlement / year end reinstatement of monetary items are recognized in the Profit & Loss Account in the period in which they arise

Forward contracts, other than those entered into hedge the foreign currency risk of unexecuted firm commitments or of highly probable forecast transactions, are treated as foreign currency transactions and accounted accordingly. Exchange differences arising on such contracts are recognized in the period in which they arise and the premium or discount is accounted as expenses / income over the life of the contract. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognized as income or as expenses for the year.

k. Borrowing Costs:

Borrowing costs that are attributable to acquisition or construction of qualifying assets are capitalized as part of the cost of such asset till such time as the asset is ready for their intended use. All other borrowing costs are recognized as an expense in the period in which they are incurred.

I. Employee Benefits:


Mar 31, 2014

A. Accounting Concepts: The Company follows the Mercantile System of accounting and recognise Income and Expenditure on accrual basis except those with significant uncertainties and confirm to prevailing practices and also provisions of applicable Accounting Standards (AS) notified under Companies (Accounting Standard) Rules 2006.

b. Fixed Assets: These are stated at cost net of Cenvat, Depreciation and Impairment. Cost of acquisition includes duties, taxes, incidental expenses, erection/commissioning expenses and interest etc., upto the date the asset is ready for its intended use.The carrying amounts of assets are reviewed at the balance sheet date to determine it there is any indication of impairment based on external / internal factors.

c. Capital Work-in-Progress: These are stated at cost including direct overhead expenses.

d. Depreciation:

i) Leasehold land is being amortized over the lease period.

ii) The classification of Plant & Machinery into Continuous and Non-continuous process is done as per Technical Certification and Depreciation thereon is provided accordingly.

iii) Depreciation in respect of Buildings and Plant and Machinery has been provided on Straight Line Method as per the rates prescribed by the Department of Company Affairs/as per Schedule XIV to the Companies Act, 1956 as applicable on the date of acquisition / installation.

iv) Depreciation on all other assets has been provided on written down value method as per the rates prescribed in Schedule-XIV to The Companies Act, 1956.

v) Depreciation on additions/deletions to fixed assets has been provided on prorata basis with reference to the date of installation/sale. Depreciation on Assets individually costing less than Rs.5000/- each has been fully charged off in the year of acquisition/installation.

vi) In case of impairment, if any, Depreciation is provided on the revised carrying amount of the assets over its remaining useful life.

e. Investments:

Quoted / Unquoted Long-term investments are stated at cost, unless, there is a decline other than temporary in the carrying value thereof, which is duly provided for in the Accounts.

f. Inventories:

Inventories are valued on the following basis:

i) Finished Goods - At cost (calculated on Annual Weighted Average Method) or Net Realisable Value whichever is lower.

ii) Material in Process - At cost.

iii) Waste - At actual Realisable Value.

iv) Raw Materials / Stores & Spares - At cost.

g. Foreign Currency Transactions:

Foreign currency transactions are recorded on the basis of exchange rate prevailing at the date of the transaction. Foreign currency monetary items are reported at the year end closing rate. Non monetary items which are carried at historical cost are reported using the exchange rate prevailing at the date of the transaction.

The exchange differences arising on settlement / year end restatement of monetary items are recognised in the Profit & Loss Account in the period in which they arise.

Forward contracts, other than those entered into hedge the foreign currency risk of unexecuted firm commitments or of highly probable forecast transactions, are treated as foreign currency transactions and accounted accordingly. Exchange differences arising on such contracts are recognized in the period in which they arise and the premium or discount is accounted as expenses / income over the life of the contract. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognized as income or as expenses for the year.

h. Borrowing Costs:

Borrowing costs relating to acquisition / construction of qualifying assets are capitalized until the time all substantial activities necessary to prepare the qualifying assets for their intended use are complete. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to revenue.

i. Excise and Customs:

i) Excise duty on Finished Goods stocks lying at the factory is accounted for at the point of manufacture of goods and is accordingly considered for valuation of Finished Goods stock lying in the factory as on the Balance Sheet date.

ii) Custom Duty on goods is accounted for as and when the liability arises.

j. Sales & Export Incentives:

Sales is net of discounts & rebates allowed. Export incentives are accounted for to the extent considered recoverable by the management.

k. Research and Development Expenses: Research and Development expenditure of revenue nature are charged to Profit & Loss Account, while Capital Expenditure are added to the cost of Fixed Assets in the year in which these are incurred.

l. Deferred Revenue Expenditure:

Expenditure incurred during the intervening period between the date a project is ready to commence commercial production and the date at which commercial production actually begins, if prolonged, is being treated as deferred revenue expenditure to be amortised equally over a period of 5 years.

m. Taxes on Income:

i) Current Income Tax is provided as per the provisions of the Income Tax Act 1961.

ii) Deferred Tax Asset and Liabililty arising on account of timing differences, being the differences between Taxable Income and Accounting Income that originate in one period and are capable of reversal in one or more subsequent periods, are recognised at the rate of income tax prevailing at the Balance Sheet date or at the substantively enacted tax rate, subject to the consideration of prudence, as per the Accounting Standard-22 "Accounting for Taxes on Income".

n. Provisions:

A provision is recognised when an enterprise has a present oblilgation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made.

Provisions made in terms of Accounting Standard 29 are not discounted to its present value and are determined based on management estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current management estimates.

o. Contingencies:

Liabilities which are material and whose future outcome cannot be ascertained with reasonable certainty are treated as Contingent and disclosed by way of "Notes" to the accounts.

p. In conformity with Accounting Standard 28 "Impairment of Assets", the company has carried the appropriate procedure for ensuring that assets are carried at no more than their recoverable amount.


Mar 31, 2013

A. Accounting Concepts: The Company follows the Mercantile System of accounting and recognise Income and Expenditure on accrual basis except those with significant uncertainties and confirm to prevailing practices and also provisions of applicable Accounting Standards (AS) notified under Companies (Accounting Standard) Rules 2006.

b. Fixed Assets: These are stated at cost net of Cenvat, Depreciation and Impairment. Cost of acquisition includes duties, taxes, incidental expenses, erection/commissioning expenses and interest etc., upto the date the asset is ready for its intended use.The carrying amounts of assets are reviewed at the balance sheet date to determine it there is any indication of impairment based on external / internal factors.

c. Capital Work-in-Progress: These are stated at cost including direct overhead expenses.

d. Depreciation:

i) Leasehold land is being amortized over the lease period.

ii) The classification of Plant & Machinery into Continuous and Non-continuous process is done as per Technical Certification and Depreciation thereon is provided accordingly.

iii) Depreciation in respect of Buildings and Plant and Machinery has been provided on Straight Line Method as per the rates prescribed by the Department of Company Affairs/as per Schedule XIV to the Companies Act, 1956 as applicable on the date of acquisition / installation.

iv) Depreciation on all other assets has been provided on written down value method as per the rates prescribed in Schedule-XIV to the Companies ACT, 1956.

v) Depreciation on additions/deletions to fixed assets has been provided on prorata basis with reference to the date of installation/sale. Depreciation on Assets individually costing less than Rs.5000/- each has been fully charged off in the year of acquisition/installation.

vi) In case of impairment, if any, Depreciation is provided on the revised carrying amount of the assets over its remaining useful life.

e. Investments:

Quoted / Unquoted Long-term investments are stated at cost, unless, there is a decline other than temporary in the carrying value thereof, which is duly provided for in the Accounts.

f. Inventories:

Inventories are valued on the following basis:

i) Finished Goods - At cost (calculated on Annual Weighted Average Method) or Net Realisable Value whichever is lower.

ii) Material in Process - At cost.

iii) Waste - At actual Realisable Value.

iv) Raw Materials / Stores & Spares - At cost.

g. Foreign Currency Transactions:

Foreign currency transactions are recorded on the basis of exchange rate prevailing at the date of the transaction. Foreign currency monetary items are reported at the year end closing rate. Non monetary items which are carried at historical cost are reported using the exchange rate prevailing at the date of the transaction.

The exchange differences arising on settlement / year end restatement of monetary items are recognised in the Profit & Loss Account in the period in which they arise.

Forward contracts, other than those entered into hedge the foreign currency risk of unexecuted firm commitments or of highly probable forecast transactions, are treated as foreign currency transactions and accounted accordingly. Exchange differences arising on such contracts are recognized in the period in which they arise and the premium or discount is accounted as expenses / income over the life of the contract. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognized as income or as expenses for the year.

h. Borrowing Costs:

Borrowing costs relating to acquisition / construction of qualifying assets are capitalized until the time all substantial activities necessary to prepare the qualifying assets for their intended use are complete. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to revenue.

i. Excise and Customs:

i) Excise duty on Finished Goods stocks lying at the factory is accounted for at the point of manufacture of goods and is accordingly considered for valuation of Finished Goods stock lying in the factory as on the Balance Sheet date.

ii) Custom Duty on goods is accounted for as and when the liability arises.

j. Sales & Export Incentives:

Sales is net of discounts & rebates allowed. Export incentives are accounted for to the extent considered recoverable by the management.

k. Research and Development Expenses: Research and Development expenditure of revenue nature are charged to Profit & Loss Account, while Capital Expenditure are added to the cost of Fixed Assets in the year in which these are incurred.

l. Deferred Revenue Expenditure:

Expenditure incurred during the intervening period between the date a project is ready to commence commercial production and the date at which commercial production actually begins, if prolonged, is being treated as deferred revenue expenditure to be amortised equally over a period of 5 years.

m. Taxes on Income:

i) Current Income Tax is provided as per the provisions of the Income Tax Act 1961.

ii) Deferred Tax Asset and Liabililty arising on account of timing differences, being the differences between Taxable Income and Accounting Income that originate in one period and are capable of reversal in one or more subsequent periods, are recognised at the rate of income tax prevailing at the Balance Sheet date or at the substantively enacted tax rate, subject to the consideration of prudence, as per the Accounting Standard-22 "Accounting for Taxes on Income".

n. Provisions:

A provision is recognised when an enterprise has a present oblilgation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made.

Provisions made in terms of Accounting Standard 29 are not discounted to its present value and are determined based on management estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current management estimates.

o. Contingencies:

Liabilities which are material and whose future outcome cannot be ascertained with reasonable certainty are treated as Contingent and disclosed by way of "Notes" to the accounts.

p. In conformity with Accounting Standard 28 "Impairment of Assets", the company has carried the appropriate procedure for ensuring that assets are carried at no more than their recoverable amount.


Mar 31, 2012

A. Accounting Concepts: The Company follows the Mercantile System of accounting and recognise Income and Expenditure on accrual basis except those with significant uncertainties and confirm to prevailing practices and also provisions of applicable Accounting Standards(AS) notified under Companies (Accounting Standard) Rules 2006.

b. Fixed Assets: These are stated at cost net of Cenvat, depreciation and Impairment. Cost of acquisition includes duties, taxes, incidental expenses, erection/commissioning expenses and interest etc., upto the date the asset is ready for its intended use.

The carrying amounts of assets are reviewed at the Balance Sheet date to determine if there is any indication of impairment based on external / internal factors.

c. Capital work-in-Progress: These are stated at cost including direct overhead expenses.

d. Depreciation:

i) Leasehold land is being amortized over the lease period.

ii) The classification of Plant and Machinery into Continuous and Non-Continuous process is done as per Technical Certification and Depreciation thereon is provided accordingly.

iii) Depreciation in respect of Buildings and Plant and Machinery has been provided on Straight Line Method as per the rates prescribed by the Department of Company Affairs/as per Schedule XIV to the Companies Act, 1956 as applicable on the date of acquisition / installation.

iv) Depreciation on all other assets has been provided on written down value method as per the rates prescribed in Schedule -XIV to the Companies Act, 1956.

v) Depreciation on additions/deletions to Fixed Assets has been provided on prorata basis with reference to the date of installation/sale. Depreciation on Assets individually costing less than Rs 5000/- each has been fully charged off in the year of acquisition/ installation.

vi) In case of impairment, if any, Depreciation is provided on the revised carrying amount of the assets over its remaining useful life.

e. Investments:

Quoted / Unquoted Long-term investments are stated at cost, unless, there is a decline other than temporary in the carrying value thereof, which is duly provided for in the Accounts.

f. Inventories:

Inventories are valued on the following basis:

i) Finished Goods - At Cost (calculated on Annual Weighted Average Method) or Net Realisable Value whichever is lower.

ii) Material in Process - At Cost.

iii) Waste - At actual Realisable Value.

iv) Raw Materials / Stores & Spare Parts - At Cost

g. Foreign Currency Transactions:

Foreign currency transactions are recorded on the basis of exchange rate prevailing at the date of the transaction. Foreign currency monetary items are reported at the year end closing rate. Non monetary items which are carried at historical cost are reported using the exchange rate prevailing at the date of the transaction.

The exchange differences arising on settlement / year end restatement of monetary items are recognised in the Profit & Loss Account in the period in which they arise.

Forward contracts, other than those entered into hedge the foreign currency risk of unexecuted firm commitments or of highly probable forecast transactions, are treated as foreign currency transactions and accounted accordingly. Exchange differences arising on such contracts are recognized in the period in which they arise and the premium or discount is accounted as expenses / income over the life of the contract. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognized as income or as expenses for the year.

h. Borrowing Costs:

Borrowing costs relating to acquisition / construction of qualifying assets are capitalized until the time all substantial activities necessary to prepare the qualifying assets for their intended use are complete. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to revenue.

i. Excise and Customs:

i) Excise Duty on Finished Goods Stock lying at the factory is accounted for at the point of manufacture of goods and is accordingly considered for Valuation of Finished Goods stock lying in the factory as on the Balance Sheet date.

ii) Custom Duty on goods is accounted for as and when the liability arises. j. Sales and Export Incentives:

Sales is net of discounts and rebates allowed. Export Incentives are accounted for to the extent considered recoverable by the management.

k. Research and Development Expenses: Research and Development Expenditure of revenue nature are charged to Profit & Loss Account, while Capital Expenditure are added to the cost of Fixed Assets in the year in which these are incurred.

l. Deferred Revenue Expenditure:

Expenditure incurred during the intervening period between the date a project is ready to commence commercial production and the date at which commercial production actually begins, if prolonged, is being treated as deferred revenue expenditure to be amortised equally over a period of 5 years.

m. Taxes on Income:

i) Current Income Tax is provided as per the provisions of the Income Tax Act 1961.

ii) Deferred Tax Asset and Liabililty arising on account of timing differences, being the differences between Taxable Income and Accounting Income that originate in one period and are capable of reversal in one or more subsequent periods, are recognised at the rate of

Income Tax prevailing at the Balance Sheet date or at the substantively enacted tax rate, subject to the consideration of prudence, as per the Accounting Standard-22 "Accounting for Taxes on Income".

n. Provisions:

A provision is recognised when an enterprise has a present oblilgation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made.

Provisions made in terms of Accounting Standard 29 are not discounted to its present value and are determined based on management estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current management estimates.

o. Contingencies:

Liabilities which are material and whose future outcome cannot be ascertained with reasonable certainty are treated as Contingent and disclosed by way of "Notes" to the accounts.

p. In conformity with Accounting Standard 28 "Impairment of Assets", the company, has carried the appropriate procedure for ensuring that assets are carried at no more than their recoverable amount.


Mar 31, 2010

A. Accounting Concepts: The Company follows the Mercantile System of accounting and recognizes Income and Expenditure on accrual basis except those with significant uncertainties.

b. Fixed Assets: These are stated at cost net of Cenvat, depreciation and Impairment. Cost of acquisition includes duties, taxes, incidental expenses, erection/commissioning expenses and interest etc., upto the date the asset is ready for its intended use.

The Carrying amounts of assets are reviewed at balance sheet date to determine if there is any indication of impairment based on external/internal factors.

c. Capital Work-in-Progress: These are stated at cost including direct overhead expenses .start up costs, trial run expenditure, borrowing costs in respect of qualifying assets etc. Realisation from Sale of Trial Production is reduced from the above cost.

d. Depreciation :

i) Leasehold land is being amortized over the lease period.

ii) The classification of Plant & Machinery into continuous and non-continuous process is done as per technical certification and depreciation thereon is provided accordingly.

iii) Depreciation in respect of Buildings and Plant and Machinery has been provided on Straight Line Method as per the rates prescribed by the Department of Company Affairs/as per Schedule- XIV of the Companies Act, 1 956 as applicable on the date of acquisition/installation.

iv) Depreciation on all other assets has been provided on written down value method as per the rates prescribed in Schedule-XIV of the Companies Act, 1956.

v) Depreciation on additions/deletions to fixed assets has been provided on prorata basis with reference to the date of installation/sale. Depreciation on Assets individually costing less than Rs.5000/- each has been fully charged off in the year of addition.

vi) In case of impairment, if any, depreciation is provided on the revised carrying amount of the assets over its remaining useful life.

e. Investments:

i) Quoted / Unquoted Long-term investments are stated at cost, unless, there is a decline other than temporary in the carrying value thereof, which is duly provided for in the Accounts.

ii) Current quoted investments are stated at lower of cost or market value on individual investment basis.

f. Inventories:

Inventories are valued on the following basis:

i) Finished Goods - At cost (calculated on Annual Weighted Average Method) or net realizable value whichever is lower.

ii) Material in Process - At estimated cost.

iii) Waste - At actual realizable value

iv) Raw Materials /Stores & Spare Parts - At cost

g. Foreign Currency Transactions:

Foreign currency transactions are recorded on the basis of exchange rate prevailing at the date of the transaction. Foreign currency monetary items are reported at the year end closing rate. Non monetary items which are carried at historical cost are reported using the exchange rate prevailing at the date of the transaction.

The exchange differences arising on settlement/year end restatement of monetary items are recognized in the Profit & Loss Account in the period in which they arise, except those relating to acquisition of Fixed Assets outside India, in which case such exchange difference are capitalized.

Forward contracts, other than those entered into to hedge the foreign currency risk of unexecuted firm commitments or of highly probable forecast transactions, are treated as foreign currency transactions and accounted accordingly. Exchange difference arising on such contracts are recognized in the period in which they arise and the premium or discount is accounted as expense / income over the life of the contract. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognized as income or as expenses for the year.

h. Employee Benefits:

i) Defined Contribution Plans

Companys contribution to Provident Fund and Superannuating Schemes are charged to the Profit & Loss Account of the year when the contribution to the respective funds are due. The Company has no obligations other than the contribution payable to the respective trusts.

ii) Defined Benefit Plans

Gratuity Liability and long term compensated leave encashment are provided for based on actuarial valuation made at the end of each financial year using the projected unit credit method. Actuarial valuation of Gratuity has been done as per the companys policy, which is not less beneficial than the provisions of the Payment of Gratuity Act, 1972. Actuarial gain and losses are recognized immediately in the statement of Profit and Loss Account as income or expenses.

iii) Short Term Employee Benefits

Employee Benefits of short term nature are recognized as expenses as and when it accrues.

i. Borrowing Costs:

Borrowing costs relating to acquisition / construction of qualifying assets are capitalized until the time all substantial activities necessary to prepare the qualifying assets for their intended use are complete. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to revenue.

j. Excise and Customs

i) Excise duty on finished goods stocks lying at the factory is accounted for at the point of manufacture of goods and is accordingly considered for valuation of finished goods stock lying in the factory as on the Balance Sheet date.

ii) Custom duty on goods is accounted for as and when the liability arises.

k. Sales & Export incentives: Sales is net of discounts & rebates allowed. Export incentives are accounted for to the extent considered recoverable by the management.

l. Research and Development Expenses: Research and Development expenditure of revenue nature are charged to Profit & Loss Account, while Capital expenditure are added to the cost of Fixed Assets in the year in which these are incurred.

m. Deferred Revenue Expenditure:

Expenditure incurred during the intervening period between the date a project is ready to commence commercial production and the date at which commercial production actually begins, if prolonged, is being treated as deferred revenue expenditure to be amortised equally over a period of 5 years.

n. Taxes on Income:

i) Current Income Tax is provided as per the provisions of the Income Tax Act 1961.

ii) Deferred Tax asset and liability arising on account of timing differences, being the differences between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods, are recognized at the rate of income tax prevailing at the Balance Sheet date or at the substantively enacted tax rate, subject to the consideration of prudence, as per the Accounting Standard-22 "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India.

o. Provisions :

A provision is recognized when an enterprise has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made.

Provisions made in terms of Accounting Standard 29 are not discounted to its present value and are determined based on management estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current management estimates.

p. Contingencies:

Liabilities which are material and whose future outcome cannot be ascertained with reasonable certainty, are treated as contingent and disclosed by way of "Notes" to the accounts.

q. Prior year expenses: Prior Year expenses / (income) (net) Debit Rs 9.53 lacs (Previous year /(Net)Debit Rs. 0.06 lac) stands adjusted to the respective expenses heads.

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