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Accounting Policies of Toyama Electric Ltd. Company

Mar 31, 2014

Statement of significant accounting policies

2.1 Basis of preparation and presentation of financial statements

The financial statements of the Company have been prepared to comply, in all material respects, with the accounting principles generally accepted in India, including mandatory Accounting Standards notified under the Companies ( Accounting Standard) Rules,2006 (a; amended) under the historical cost convention and on an accrual basis. The accounting policies,in all material respects, have been consistently applied by the Company and are consistent with those used in previous year.

2.2 Use of estimates

The preparation of the financial statements is in conformity with Indian GAAP, requiring management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities on the date of the financial statements and the reported amounts of revenue and expenses during the reporting year. Although these estimates are based upon management''s best knowledge of current events and actions,actual results could differ from these estimates. Any revision to accounting estimates is recognised prospectively in current and future years.

2.3 Revenue Recognitions Sales and services

Sale of goods are recognised when significant risk and rewards of ownership of the goods have passed to buyer, which generally Coincides with dispatch of goods. Gross sales arc inclusive of applicable excise duty and exclusive of sales tax. Revenue from services are recognised as and when such services are rendered. Revenue from scrap is recognised on sale.

Dividend and interest income

Dividend is recognised when declared and interest income is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable.

2.4 Tangible and intangible fixed assets

Tangible and intangible fixed assets are stated at cost less accumulated deprecation/amortisation and impairment loss, if any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use.

2.5 Depreciation and amortisation

Depreciation is provided on written down value method on all assets except machinery & tools for new projects which are being depreciated on straight line method at the rates prescribed under schedule XIV. The depreciation on revalued cost of the assets are being reduced from the revaluation reserve.

2.6 Impairment of tangible and intangible fixed assets

The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on intemai/extemal factors. An impairment loss is recognised wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the assets net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessment of the time value of money and risks specific to the asset. After impairment, depreciation provided on revised carrying amount of the assets over its remaining useful life. Previously recognised impairment loss is further provided or reversed depending on changes in circumstances.

2.7 Inventories

Raw materials, stores, spares and tools are valued at lower of cost and net realizable value. Cost of raw materials comprises of cost of purchase, cost of conversion and other costs incurred in bringing them to their respective present location and condition. Cost of raw material is determined on a weighted average method.

Work in progress and finished goods are valued at lower of cost and net realisable value. Cost includes direct materials and labour and proportion of manufacturing overheads based on norma! operating capacity. Cost of finished goods includes excise duty. Cost determined on a weighted average method.

Net realisable value is estimated selling price in the ordinary course of business less estimated cost of completion and selling expenses.

2.8 Employee Benefits

Short term employee benefits are recognised as an expense in the statement of profit and loss of the year in which the related service is rendered.

Defined Contribution Plans

Company''s contribution paid/payable during the year to Provident fund,ES1C and labour welfare fund are Defined contribution plans and are accounted on accrual basis and charged to the statement of profit and loss of the year. There are no other obligations other than the contribution payable to respective funds.

Defined Benefit Plans

Gratuity liability is defined benefit obligation and is provided on the basis of an actuarial valuation on projected unit credit method made at the end of each year. The company funds the benefit through contribution to LIC.The company recognises the actuarial gain and losses in the statement of profit and loss in the period in which they arise.

Company does not have policy to pay compensated absences.

2.9 Investments

Investments that are readily realisable and intended to be held for not more than a year are classified as current investments. Current investments are carried at lower of cost and fair value determined on an individual investment basis. Long term investments are carried at cost. However, provision for diminution in value is made to recognise a decline other than temporary in the value of long term investments.

2.10 Foreign Currency Transactions

Foreign currency transaction are accounted for at the exchange rates prevailing at the date of transaction. Gain and losses resulting from settlement of such transaction and from the translation of monetary assets and liabilities denominated in foreign currencies are recognised in the statement of profit and loss.

2.11 Taxation

Provision for income tax is made for current and deferred taxes. Provision for current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income Tax Act, 1961. Deferred tax on account of timing differences between taxable and accounting income is accounted for by applying tax rates and laws enacted or substantially enacted on the balance sheet date.

Deferred tax assets are recognised and carried forward only if there is reasonable certainty of situation. However in case of carried forward losses and unabsorbed depreciation under the Income Tax Act,1961, the Deferred tax asset is recognised if and only if there is a virtual certainty backed by convincing evidence of its situation. Such assets are reviewed at each Balance Sheet date to reassess its realisation.

Advance taxes and provision for current income taxes are presented in the balance sheet after off- setting advance taxes paid and income tax provisions arising in the same tax jurisdiction and where company intends to settle the asset and liability on net basis.

Deferred tax asset and/or liability have been offset as they relate to the same governing taxation laws.

2.12 Provisions and contingencies

A provision is recognised when an enterprise has a present obligation as a result of past events; it is probable that an outflow of resources will be required to settle obligation, in respect of which a reliable estimate can made. Provisions are not discounted to its present value and are determined based on best 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 best estimate.

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by occurrence or non-occurrence of one or more uncertain future events beyond the control of the company or a present obligation that is not recognised because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognised because it cannot be measured reliably. The company does not recognise a contingent liability but discloses its existence in the financial statements.

Contingent assets are neither recognised nor disclosed.

2.13 Leases

Lease arrangements where the risk and rewards incidental to ownership of an asset substantially vest with the lessor, are recognised as operating leases. Lease''s rentals under operating leases are recognised in statement of profit and loss.

2.14 Cash and cash equivalents

In the cash flow statements, cash and cash equivalents include cash in hand, demand deposits with banks, other short term highly liquid investments.

2.15 Earnings/(loss) per share

Basic earnings per share are calculated by dividing profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. For the purpose of calculating diluted earnings per share, net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares, if any.


Mar 31, 2013

1.1 Basis of preparation and presentation of financial statements

The financial statements of the Company have been prepared to comply, in all material respects, with the accounting principles generally accepted in India, including mandatory Accounting Standards notified under the Companies ( Accounting Standard) Rules,2006 (as amended) under the historical cost convention and on an accrual basis. The accounting policies.in all material respects, have been consistently applied by the Company and are consistent with those used in previous year.

1.2 Use of estimates

The preparation of the financial statements is in conformity with Indian GAAP, requiring management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities on the date of the financial statements and the reported amounts of revenue and expenses during the reporting year. Although these estimates are based upon management''s best knowledge of current events and actions,actual results could differ from these estimates. Any revision to accounting estimates is recognised prospectively in current and future years.

1.3 Revenue Recognitions Sales and services

Sale of goods are recognised when significant risk and rewards of ownership of the goods have passed to buyer, which generally coincides with dispatch of goods. Gross sales are inclusive of applicable excise duty and exclusive of sales tax. Revenue from services are recognised as and when such services are rendered. Revenue from scrap is recognised on sale.

Dividend and interest income

Dividend is recognised when declared and interest income is recognised on a time proportion basis taking into account the I amount outstanding and the rate applicable.

1.4 Tangible and intangible fixed assets

Tangible and intangible fixed assets are stated at cost less accumulated deprecation/amortisation and impairment loss, if any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use.

1.5 Depreciation and amortisation

Depreciation is provided on written down value method on all assets except machinery & tools for new projects which are being depreciated on straight line method at the rates prescribed under schedule XIV. The depreciation on revalued cost of the assets are being reduced from the revaluation reserve.

1.6 Impairment of tangible and intangible fixed assets

The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal/external factors. An impairment loss is recognised wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the assets net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessment of die time value of money and risks specific to the asset. After impairment, depreciation provided on revised carrying amount of the assets over its remaining useful life. Previously recognised impairment loss is further provided or reversed depending on changes in circumstances.

1.7 Inventories

Raw materials, stores, spares and tools are valued at lower of cost and net realizable value. Cost of raw materials comprises of cost of purchase, cost of conversion and other costs incurred in bringing them to their respective present location and condition. Cost of raw material is determined on a weighted average method.

Work in progress and finished goods are valued at lower of cost and net realisable value. Cost includes direct materials and labour and proportion of manufacturing overheads based on normal operating capacity. Cost of finished goods includes excise duty. Cost determined on a weighted average method.

Net realisable value is estimated selling price in the ordinary course of business less estimated cost of completion and selling expenses.

1.8 Employee Benefits

Short term employee benefits are recognised as an expense in the statement of profit and loss of the year in which the related service is rendered.

Defined Contribution Plans

Company''s contribution paid/payable during the year to Provident fund.ESIC and labour welfare fund are Defined contribution plans and are accounted on accrual basis and charged to the statement of profit and loss of the year. There are no other obligations other than the contribution payable to respective funds.

Defined Benefit Plans

Gratuity liability is defined benefit obligation and is provided on the basis of an actuarial valuation on projected unit credit method made at the end of each year. The company funds the benefit through contribution to LIC.The company recognises the actuarial gain and losses in the statement of profit and loss in the period in which they arise.

Company does not have policy to pay compensated absences.

1.9 Investments

Investments that are readily realisable and intended to be held for not more than a year are classified as current investments. Current investments are carried at lower of cost and fair value determined on an individual investment basis. Long term investments are carried at cost. However, provision for diminution in value is made to recognise a decline other than temporary in the value of long term investments.

1.10 Foreign Currency Transactions

Foreign currency transaction are accounted for at the exchange rates prevailing at the date of transaction. Gain and losses resulting from settlement of such transaction and from the translation of monetary assets and liabilities denominated in foreign currencies are recognised in the statement of profit and loss.

1.11 Taxation

Provision for income tax is made for current and deferred taxes. Provision for current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income Tax Act, 1961. Deferred tax on account of timing differences between taxable and accounting income is accounted for by applying tax rates and laws enacted or substantially enacted on the balance sheet date.

Deferred tax assets are recognised and carried forward only if there is reasonable certainty of situation. However in case of carried forward losses and unabsorbed depreciation under the Income Tax Act, 1961, the Deferred tax asset is recognised if and only if there is a virtual certainty backed by convincing evidence of its situation. Such assets are reviewed at each Balance Sheet date to reassess its realisation.

Advance taxes and provision for current income taxes are presented in the balance sheet after off-setting advance taxes paid and income tax provisions arising in the same tax jurisdiction and where company intends to settle the asset and liability on net basis.

Deferred tax asset and/or liability have been offset as they relate to the same governing taxation laws.

1.12 Provisions and contingencies

A provision is recognised when an enterprise has a present obligation as a result of past events; it is probable that an outflow of resources will be required to settle obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best 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 best estimate.

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by occurrence or non-occurrence of one or more uncertain future events beyond the control of the company or a present obligation that is not recognised because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognised because it cannot be measured reliably. The company does not recognise a contingent liability but discloses its existence in the financial statements.

Contingent assets are neither recognised nor disclosed.

1.13 Leases

Lease arrangements where the risk and rewards incidental to ownership of an asset substantially vest with the lessor, are recognised as operating leases. Leases rentals under operating leases are recognised in statement of profit and loss.

1.14 Cash and cash equivalents

In the cash flow statements, cash and cash equivalents include cash in hand, demand deposits with banks, other short term highly liquid investments.

1.15 Earnings/floss) per share

Basic earnings per share are calculated by dividing profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. For the purpose of calculating diluted earnings per share, net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares, if any.


Mar 31, 2012

(a) Basis of preparation of financial statements

The financial statements are prepared under the historical cost convention, on accrual basis of accounting to comply in all material respects, with the mandatory accounting standards as notified, by the. Companies. (Accounting Standards) Rules, 2006 as amended ('the Rules') and the relevant provisions of the Companies Act, 1956 ('the Act'). The accounting policies have been consistently applied by the Company; and the accounting policies not referred to otherwise, are in conformity with India Generally Accepted Accounting Principles (Indian GAAP).

All assets and liabilities have been classified as current and non-current as per the company's normal operating cycle and other criteria set out in the Schedule-VI to the Companies Act, 1956. Based on nature of products and time between the acquisition of assets for processings and their realisation in cash and cash equivalents, the company has ascertained its operating cycle as 12 months for the purpose of current-non-current classification of assets and liabilities.

(b) Use of estimates

The preparation of financial statements in conformity with the Indian GAAP, requires management to make estimates and assumptions that may affect the reported amounts of assets and liabilities and disclosures relating to contingent liabilities as at the date of the financial statements and the reported amounts of incomes and expenses during the reporting period. Although these estimates are based upon management's best knowledge of current events and actions, actual results could differ from these estimates.

(c) Revenue recognition

i) Sales & Services

Sale of goods are recognised at the time of dispatch to the customer.

Revenue from services are recognised when such services are rendered.

ii) Interest income

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

(d) Fixed assets

Tangible and Intangible assets

i) Fixed Assets are stated at cost of acquisition less accumulated depreciation. Cost is inclusive of borrowing cost and other incidental charges incurred up to the date of installation/put to use.

ii) Cenvat Credit availed on purchase of fixed assets is reduced from the cost of respective assets.

iii) Adjustments arising from foreign exchange rate fluctuation relation to liabilities attributable to fixed assets are taken to profit and loss account

(e) Impairment of assets

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

(f) Investments

i) Investment intended to be held for not more than a year are classified as current investments. These are valued at lower of cost and fair value.

ii) Long-term investments are stated at cost Provision for diminution in value is made only if, in the opinion of management, such a decline is other than temporary.

(g) Inventories are valued at lower of cost or net realizable value after providing obsolescence, if any. Cost of inventories comprises of cost of purchase, cost of conversion and other costs incurred in bringing them to their respective present location and condition.

(h) Depreciation and amortization

Depreciation is provided on written down value method on all assets except machinery & tools for new projects which are being depreciated on straight line method at the rates prescribed under schedule XIV. The depreciation on revalued cost of the assets are being reduced from the revaluation reserve.

(g) Foreign currency transactions

Foreign Currency transactions on revenue accounts are translated at the rates prevailing on the day when the expenses are incurred/income earned Fluctuations on account of exchange rate differences are being debited/credited to revenue account

(h) Employee Benefits:

i) Defined Contribution Plan.

Companies contribution paid/payable during the year to the Employee Provident fund, ESIC, Labour Welfare fund are recognized in the Profit and Loss Account

ii) Defined Benefit Plan

Gratuity: In accordance with applicable Indian laws, the Company provides for gratuity, a defined benefit retirement plan ("Gratuity Han") covering all employees. The gratuity Plan provides a lump sum payment to vested employees, at retirement or termination of employment, an amount based on the respective employee's last drawn salary and the years of employment with the company. Liability with regards to Gratuity Plan is accrued based on actuarial valuation at the balance sheet date, carried out by the Life Insurance Corporation Of India. Actuarial gain or loss is recognised immediately in the statement of profit and loss as income or expense. The company has an employees' gratuity fund managed by the Life Insurance Corporation of India ("LIC").

iii) Short Term Employee benefits Short - term employee benefits expected to be paid in exchange for the services rendered by the employees is recognised during the period when the employee renders service.

(j) Provisions, contingent liabilities and contingent assets A provision is recognized when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable 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 best estimates. Contingent liabilities are disclosed by way of notes to accounts. Contingent assets are hot recognized or disclosed.

(k) Taxes on income

Tax on Income for the current year is determined on the basis of the Income Tax Act, 1961.

Deferred tax is recognised oh timing differences between the accounting income and the taxable income for the year and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date.

Deferred tax assets are recognised and carried forward to the extent that there is a reasonable/virtual certainty that sufficient future taxable income will be available against which such deferred tax asset can be realised.

(I) Earnings/(loss) per share

Basic earnings/(loss) per share are calculated by dividing the net profit/(loss) for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period are adjusted for any bonus shares issued during the year and also after the balance sheet date but before the date the financial statements are approved by the board of directors

For the purpose of calculating diluted earnings/(loss) per share, the net profit/(loss) for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

(m) Financial and Derivative Instruments

During the current year company has not entered into derivative/forward contracts.

(n) Leases:

Lease arrangements where the risk and rewards incidental to ownership of an asset substantially vest with the lessor, are recognised as operating leases. Leases rentals under operating leases are recognised in profit and loss accounts.


Mar 31, 2011

1. The Financial statements are prepared under the historical cost convention & comply in all material aspects with the applicable accounting principles in India, accounting standards notified under subsection (3C) of 211 of the Companies Act, 1956 & relevant provisions of the Companies Act, 1956.

2. Fixed Assets : Expenditure which are of capital nature are capitalized at cost, which comprises of purchase price (net of rebates and discounts) import duties, levies and any directly attributable cost of bringing the assets to its working condition for the intended use.

3. Depreciation: Depreciation is provided on written down value method on all assets except machinery & tools for new projects which are being depreciated on straight line method at the rates prescribed under schedule XIV. The depreciation on revalued cost of the assets are being reduced from the revaluation reserve.

4. Foreign Currency transactions: Foreign Currency transactions on revenue accounts are translated at the rates prevailing on the day when the expenses are incurred/ income earned. Fluctuations on account of exchange rate differences are being debited/credited to revenue account.

5. Revenue Recognition: Revenue is recognised at the point of dispatch of materials to customers from stock points. Other income is accounted on accrual basis.

6. Inventories are valued at lower of cost or net realizable value after providing obsolescence, if any. Cost of inventories comprises of cost of purchase, cost of conversion and other costs incurred in bringing them to their respective present location and condition.

7. Investments: Long term Investments are valued at purchase cost. Provision for diminution in the value of long-term investment is made only if such decline is other than temporary in the opinion of the management.

8. Employee Benefits:

a) Defined Contribution Plan

Companies contribution paid/payable during the year to the Employee Provident fund ,ESIC, Labour Welfare fund are recognized in the Profit and Loss Account

b) Defined Benefit Plan

Gratuity: In accordance with applicable Indian laws, the Company provides for gratuity, a defined benefit retirement plan ("Gratuity Plan" ) covering all employees. The gratuity Plan provides a lump sum payment to vested employees, at retirement or termination of employment, an amount based on the respective employee's last drawn

salary and the years of employment with the company. Liability with regards to Gratuity Plan is accrued based on actuarial valuation at the balance sheet date, carried out by the Life Insurance Corporation Of India. Actuarial gain or loss is recognised immediately in the statement of profit and loss as income or expense. The company has an employees' gratuity fund managed by the Life Insurance Corporation of India ("LIC").

c) Short term employee benefits are recognised as an expense at the undiscounted amount in the Profit and Loss Account of the year in which the related service is rendered.

9. Taxes on Income:

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

10. Impairment of Assets: An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable value. An impairment of loss is chargeable to the profit & loss account in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting period is reversed if there has been a change in estimate of recoverable amount.

11. Earnings per Share:

Basic/diluted earning per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders (after deducting attributable taxes) by the weighted average number of equity shares outstanding during the year.

12. Financial and Derivative Instruments

During the current year company has not entered into derivative/forward contracts.

13. 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 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.

14. Leases:

Lease arrangements where the risk and rewards incidental to ownership of an asset substantially vest with the lessor, are recognised as operating leases. Leases rentals under operating leases are recognised in profit and loss accounts.


Mar 31, 2010

1. The Financial statements are prepared under the historical cost convention & comply in all material aspects with the applicable accounting principles in India, accounting standards notified under subsection (3C) of 211 of the Companies Act, 1956 & relevant provisions of the Companies Act, 1956.

2. Fixed Assets : Expenditure which are of capital nature are capitalized at cost, which comprises of purchase price (net of rebates and discounts) import duties, levies and any directly attributable cost of bringing the assets to its working condition for the intended use.

3. Depreciation: Depreciation is provided on written down value method on all assets except machinery & tools for new projects which are being depreciated on straight line method at the rates prescribed under schedule XIV. The depreciation on revalued cost of the assets are being reduced from the revaluation reserve.

4. Foreign Currency transactions: Foreign Currency transactions on revenue accounts are translated at the rates prevailing on the day when the expenses are incurred/ income earned. Fluctuations on account of exchange rate differences are being debited/credited to revenue account.

5. Revenue Recognition: Revenue is recognised at the point of dispatch of materials to customers from stock points. Other income is accounted on accrual basis.

6. Inventories are valued at lower of cost or net realizable value after providing obsolescence, if any. Cost of inventories comprises of cost of purchase, cost of conversion and other costs incurred in bringing them to their respective present location and condition.

7. Investments: Long term Investments are valued at purchase cost. Provision for diminution in the value of long-term investment is made only if such decline is other than temporary in the opinion of the management.

8. Employee Benefits:

a) Defined Contribution Plan

Companies contribution paid/payable during the year to the Employee Provident fund, ES1C, Labour Welfare fund are recognized in the Profit and Loss Account

b) Defined Benefit Plan

Gratuity: In accordance with applicable Indian laws, the Company provides for gratuity, a defined benefit retirement plan ( "Gratuity Plan" ) covering all employees. The gratuity Plan provides a lump sum payment to vested employees, at retirement or termination

of employment, an amount based on the respective employees last drawn salary and the years of employment with the company. Liability with regards to Gratuity Plan is accrued based on actuarial valuation at the balance sheet date, carried out by the Life Insurance Corporation Of India. Actuarial gain or loss is recognised immediately in the statement of profit and loss as income or expense. The company has an employees gratuity fund managed by the Life Insurance Corporation of India ("LIC").

c) Short term employee benefits are recognised as an expense at the undiscounted amount in the Profit and Loss Account of the year in which the related service is rendered.

9. Taxes on Income:

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

10. Impairment of Assets: An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable value. An impairment of loss is chargeable to the profit & loss account in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting period is reversed if there has been a change in estimate of recoverable amount.

11. Earnings per Share:

Basic/diluted earning per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders (after deducting attributable taxes) by the weighted average number of equity shares outstanding during the year.

12. Financial and Derivative Instruments

During the current year company has not entered into derivative/forward contracts.

13. 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 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.

14. Leases:

Lease arrangements where the risk and rewards incidental to ownership of an asset substantially vest with the lessor, are recognised as operating leases. Leases rentals under operating leases are recognised in profit and loss accounts.