Accounting Policies of Perfectpac Ltd. Company

Mar 31, 2015

A) Basis of preparation

The financial statements are prepared under the historical cost convention on accrual basis of accounting to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions thereof.

b) Fixed Assets

Fixed assets are stated at cost (net of CENVAT wherever applicable) less accumulated depreciation. Cost is inclusive of freight, duties and levies and any directly attributable cost of bringing the assets to their working conditions for intended use but excludes recoveries. Intangibles are stated at cost less accumulated amount of amortization.

c) Depreciation/Amortization

Tangible Assets

i. W.e.f 1-4-2014 Depreciation on fixed assets is provided on Straight Line Method (SLM) as per useful life & in the manner prescribed in Schedule II of the Companies Act, 2013.

ii. Depreciation on building other than above is calculated on the revalued amount at the rates considered appropriate by the Value. Out of the above, depreciation on original cost on straight line method basis as prescribed by the Companies Act, 2013 is charged to Profit & Loss Account and balance for the year is set off against transfer from Revaluation Reserve.

iii. Leasehold land is depreciated over the period of lease.

Intangible Assets

Computer Software charges are amortized over a period of five years.

d) Inventories

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

i) Cost of Raw Materials, Stores, Spares etc. is determined on first in first out basis but excludes sales tax on such purchases within Haryana which is set off against the Sales tax liability on goods produced from such purchases and sold during the year. Excise duty is not included in cost as the Cenvat benefit goes to reduce the cost of materials purchased.

ii) The cost of finished goods and work in progress includes cost of raw material and factory overheads. Provision of excise duty on finished goods is made in accounts and is also considered to determine the cost of stock of finished goods.

e) Investments

Investments that are readily realizable and intended to be held for not more than a year are classified as current investments. All other investments are classified as long term investments. Current investments are carried at the lower of cost or fair value. Long term investments are carried at cost less permanent diminution in value, if any.

f) Revenue Recognition

Sales are recognized on transfer of significant risks & rewards which takes place on dispatch of goods to the customer. Sales are stated net of excise duty; excise duty being the amount included in the amount of gross turnover. Sales exclude VAT/Sales tax and are net of returns and transit insurance claims short received.

Earnings from investments, are accrued or taken into revenue in full on declaration or receipts. Profit/loss on sale of raw materials and stores stand adjusted in their consumption account.

g) Borrowing Costs

Borrowing costs that are attributable to the acquisition, construction or production of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is an asset that necessarily requires a substantial period of time to get ready for its intended use or sale. All other borrowing costs are charged to revenue.

h) Employee Benefits

Contributions to defined Contribution Schemes such as Provident Fund etc are charged to the Statement of Profit & Loss as and when incurred.

The Gratuity Fund benefits are administered by a Trust recognized by Income Tax Authorities through the Group Scheme of LIC of India. The liability for gratuity at the end of each financial year is determined on the basis of actuarial valuation carried out by the Insurer's Actuary on the basis of projected unit credit method as confirmed to the Company. Company's contribution is charged to the Statement of Profit and Loss.

Liability on account of employee benefits comprising of compensated absences is determined on the basis of actuarial valuation carried out by the Insurer's actuary at the end of financial year which is paid to the LIC of India and Canara Bank, HSBC, Oriental Bank of Commerce Life Insurance Company Ltd. Company's contribution is charged to Statement of Profit and Loss.

Liability on account of bonus and other incentives is recognised on an undiscounted accrual basis.

i) Foreign Exchange Transactions

Monetary assets and liabilities denominated in foreign currency are restated at the prevailing year and rates. The resultant gain/ loss upon such restatement along with the gain /loss on account of foreign currency transactions are accounted in the Statement of Profit and Loss.

j) Taxation

Current tax is determined as the amount of tax payable in respect of taxable income in accordance with relevant tax rates and tax laws.

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

k) Impairment of Assets

Regular review is done to determine whether there is any indication of impairment of the carrying amount of the Company's fixed assets. If any such indication exists, impairment loss i.e. the amount by which the carrying amount of an asset exceeds its recoverable amount is provided in the books of accounts. In case there is any indication that an impairment loss recognized for an asset in prior accounting periods no longer exists or may have decreased, the recoverable value is reassessed and the reversal of impairment loss is recognized as income in the Statement of Profit and Loss.

l). Provisions and Contingencies

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

Provisions are reviewed at each balance sheet date and are adjusted to effect the current best estimation.

A disclosure of contingent liability is made when there is a possible obligation or a present obligation that will probably not require outflow of resources or where a reliable estimate of the obligation cannot be made.

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Mar 31, 2014

A) BASIS FOR PREPARATION OF ACCOUNTS

The financial statements have been prepared in compliance with all material aspects with the Accounting Standards notified by Companies (Accounting Standards) Rules, 2006, as amended and the other relevant provisions of Companies Act, 1956, read with General Circular No.15/2013 dated 13 th September, 2013, issued by the Ministry of Corporate Affairs, in respect of Section 133 of Companies Act, 2013. Financial statements are based on historical cost and are prepared on accrual basis. Accounting policies have been consistently applied by the Company and are consistent with those used in the previous year.

All assets and liabilities have been classified as current or non current as per the Company''s normal operating cycle and the criteria set out in Revised Schedule VI to the Companies Act, 1956. The Company has ascertained its operating cycle as 12 months for the purpose of current/non current classification of assets and liabilities.

b) FIXED ASSETS

Fixed assets are stated at cost (net of CENVAT wherever applicable) less accumulated depreciation. Cost is inclusive of freight, duties and levies and any directly attributable cost of bringing the assets to their working conditions for intended use but excludes recoveries. Intangibles are stated at cost less accumulated amount of amortisation.

c) DEPRECIATION/AMORTISATION Tangible Assets

i) Depreciation on fixed assets is provided on straight line method (SLM) at the rates and in the manner prescribed in Schedule-XIV of the Companies Act, 1956 except straight line rate on Dies & Moulds at 95% per annum which is higher than the rate prescribed in the above schedule. The rate of depreciation on dies & moulds reflect the estimated useful life of such assets.

ii) Depreciation on building other than above is calculated on the revalued amount at the rates considered appropriate by the Valuer. Out of the above, depreciation on original cost on straight line method basis as prescribed by the Companies Act, 1956 (as amended) is charged to Profit & Loss Account and balance for the year is set off against transfer from Revaluation Reserve.

iii) Assets costing upto Rs.5,000/- each are depreciated fully in the year of purchase.

iv) Lease hold Land is amortised over the period of lease.

Intangible Assets

v) Computer Software is amortized over a period of five years.

d) INVENTORIES

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

i) Cost of Raw Materials, Stores, Spares etc. is determined on first in first out basis but excludes sales tax on such purchases within Haryana which is set off against the Sales tax liability on goods produced from such purchases and sold during the year. Excise duty is not included in cost as the Cenvat benefit goes to reduce the cost of materials purchased.

ii) The cost of finished goods and work in progress includes cost of raw material and factory overheads. Provision of excise duty on finished goods is made in accounts and is also considered to determine the cost of stock of finished goods.

e) Investments

Investments that are readily realizable and intended to be held for not more than a year are classified as current investments. All other investments are classified as long term investments.

Current investments are carried at the lower of cost or fair value. Long term investments are carried at cost less permanent diminution in value, if any.

f) REVENUE RECOGNITION

Sale of goods is recognised at the point of dispatch to the customer. Sales are stated gross of excise duty as well as net of excise duty; excise duty being the amount included in the amount of gross turnover. Sales are recorded net of, Sales tax, return / rebate and trade discounts. Earnings from investments, are accrued or taken into revenue in full on declaration or receipts. Profit/loss on sale of raw materials and stores stand adjusted in their consumption account.

g) BORROWING COSTS

Borrowing costs that are attributable to the acquisition, construction or production of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is an asset that necessarily requires a substantial period of time to get ready for its intended use or sale. All other borrowing costs are charged to revenue.

h) EMPLOYEE BENEFITS

Contributions to defined Contribution Schemes such as Provident Fund etc are charged to the Statement of Profit & Loss as and when incurred.

The Gratuity Fund benefits are administered by a Trust recognised by Income Tax Authorities through the

Group Scheme of LIC of India. The liability for gratuity at the end of each financial year is determined on the basis of actuarial valuation carried out by the Insurer''s Actuary on the basis of projected unit credit method as confirmed to the Company. Company''s contribution is charged to the Statement of Profit and Loss.

Liability on account of employee benefits comprising of compensated absences is determined on the basis of actuarial valuation carried out by the Insurer''s actuary at the end of financial year which is paid to the LIC of India and Canara Bank, HSBC, Oriental Bank of Commerce Life Insurance Company Ltd. Company''s contribution is charged to Statement of Profit and Loss.

Liability on account of bonus and other incentives is recognised on an undiscounted accrual basis.

i) TAXATION

Provision for income tax is made based on the liability computed in accordance with relevant tax rates and tax laws.

Deferred tax is recognised, subject to the consideration of prudence, on 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.

j) IMPAIRMENT OF ASSETS

Regular review is done to determine whether there is any indication of impairment of the carrying amount of the Company''s fixed assets. If any such indication exists, impairment loss i.e. the amount by which the carrying amount of an asset exceeds its recoverable amount is provided in the books of accounts. In case there is any indication that an impairment loss recognized for an asset in prior accounting periods no longer exists or may have decreased, the recoverable value is reassessed and the reversal of impairment loss is recognized as income in the Statement of Profit and Loss.

k) FOREIGN EXCHANGE TRANSACTIONS

Monetary assets and liabilities denominated in foreign currency are restated at the prevailing year and rates. The resultant gain/loss upon such restatement alongwith the gain/loss on account of foreign currency transactions are accounted in the Statement of Profit and Loss.

l) PROVISIONS AND CONTINGENT LIABILITIES

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

Provisions are reviewed at each balance sheet date and are adjusted to effect the current best estimation. A disclosure of contingent liability is made when there is a possible obligation or a present obligation that will probably not require outflow of resources or where a reliable estimate of the obligation can not be made.

RIGHTS, PREFERENCES AND RESTRICTIONS ATTACHED TO SHARES Equity Shares :

The Company has one class of Equity Shares having at par value of Rs 10/- each. Each shareholder is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in the case of interim dividend. In the event of liquidation of the company, the equity shareholders will be entitled to receive any of the remaining assets of the company after distribution of all preferential amounts, in proportion to their shareholding.

Preference Shares :

Preference shares have at par value of Rs. 100/- each redeemable at par after 1 st February, 2014. These shares carry a fixed cumulative dividend of 8% per annum. The preference shareholders are entitled to preferential rights as regards payment of dividends at above fixed rate and right of repayment of capital on winding up.

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Mar 31, 2012

A) BASIS OF PREPARATION OF ACCOUNTS

The financial statements are prepared under the historical cost convention, in accordance with applicable mandatory accounting standards prescribed under the Companies (Accounting Standards), Rules, 2006 and the relevant provisions of the Companies Act, 1956.

All assets and liabilities have been classified as current or non current as per the Company's normal operating cycle and the criteria set out in Revised Schedule VI to the Companies Act, 1956. The Company has ascertained its operating cycle as 12 months for the purpose of current/non current classification of assets and liabilities.

b) FIXED ASSETS

Fixed assets are stated at cost (net of CENVAT wherever applicable) less accumulated depreciation. Cos! is inclusive of freight, duties and levies and any directly attributable cost of bringing the assets to theii wot king conditions for intended use but excludes recoveries. Intangibles are stated at cost loss accumulated amount el amortisation.

c) INVESTMENTS

Long term Investments are stated at cost. However, diminution in value other than temporary is provided I lie Profit/Loss arising on account of sales is recognised in the Profit and Loss Account. The reduction in carrying amount is reversed when there is a rise in the value of investments or if the reasons lor the reduction no lonciei exist.

d) DEPRECIATION/AMORTISATION Tangible Assets

i) Depreciation on fixed assets is provided on straight line method at rates and in the manner prescribed in Schedule-XIV of the Companies Act, 1956 except straight line rate on Dies & Moulds at 9'j% per annum vvlueh is higher than the rate prescribed in the above schedule: The rate of depreciation on dies & moulds relied H»- estimated useful life of such assets.

ii) Depreciation on building other than above is calculated on the revalued amount at the rates consideied appropriate by the Valuer. Out of the above, depreciation on original cost on straight line method basis ,i. prescribed by the Companies Act, 1956 (as amended) is charged to Profit & Loss Account and l.vil.nn e t i the year is set off against transfer from Revaluation Reserve.

iii) Assets costing upto Rs.5,000/- each are depreciated fully in the year of purchase.

iv) Lease hold Land is amortised over the period of lease.

Intangible Assets

v) Computer Software is amortized over a period of five years.

e) INVENTORIES

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

i) Cost of Raw Materials, Stores, Spares etc. is determined on first in first out basis but excludes sales tax on such purchases within Haryana which is set off against the Sales tax liability on goods produced Irom such purchases and sold during the year. Excise duty is not included in cost as the Cenvat benefit goes to i educe the cost of materials purchased.

ii) The cost of finished goods and work in progress includes cost of raw material and lactory overhead: Provision of excise duty on finished goods is made in accounts and is also considered to determine the u'.-.i of stock of finished goods.

f) REVENUE RECOGNITION

i) Sales are recognised when goods are supplied to the customers. Sales are stated gross of excise duty as well as net of excise duty, excise duty being the amount included in gross turnover. Sales are recorded net of , sales tax, returns/rebate and trade discounts.

ii) Dividend income on investments is accounted for when the right to receive the same is established.

g) BORROWING COSTS

Borrowing costs that are attributable to the acquisition, construction or production of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is an asset that necessarily requires a substantial period of time to get ready for its intended use or sale. All other borrowing costs are charged to revenue.

h) EMPLOYEE BENEFITS

Contributions to defined Contribution Schemes such as Provident Fund etc are charged to the Profit & Loss Account as and when incurred.

The Gratuity Fund benefits are administered by a Trust recognised by income Tax Authorities through the Group Scheme of LIC of India. The liability for gratuity at the end of each financial year is determined on the basis of actuarial valuation carried out by the Insurer's Actuary on the basis of projected unit credit method as confirmed to the Company. Company's contribution is charged to the Profit and Loss Account.

Liability on account of employee benefits comprising of compensated absences is determined on the basis of actuarial valuation carried out by the Insurer's actuary at the end of financial year which is paid to the LIC of India. Company's contribution is charged to profit and loss account.

Liability on account of bonus and other incentives is recognised on an undiscounted accrual basis.

i) TAXATION

Provision for income tax is made based on the liability computed in accordance with relevant tax rates and tax laws.

Deferred tax is recognised, subject to the consideration of prudence, on 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.

j) IMPAIRMENT OF ASSETS

Regular review is done to determine whether there is any indication of impairment of the carrying amount of the Company's fixed assets. If any such indication exists, impairment loss i.e. the amount by which the carrying amount of an asset exceeds its recoverable amount is provided in the books of accounts. In case there is any indication that an impairment loss recognized for an asset in prior accounting periods no longer exists or may have decreased, the recoverable value is reassessed and the reversal of impairment loss is recognized as income in the Profit and Loss Account.

k) FOREIGN EXCHANGE TRANSACTIONS

Transactions in foreign currencies are recorded at the exchange rates prevailing on the date of transactions. Transactions outstanding at year end are translated at exchange rates prevailing at the year end and the profit / loss so determined is ret oqnised in the Profit and Loss Account.

I) PROVISIONS AND CONTINGENT LIABILITIES

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

Provisions are reviewed at each balance sheet date and are adjusted to effect the current best estimation. A disclosure of contingent liability is made when there is a possible obligation or a present obligation that will probably not require outflow of resources or where a reliable estimate of the obligation can not be made.

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Mar 31, 2011

A) Basis of Accounting:

The financial statements are prepared under the historical cost convention, in accordance with applicable mandatory accounting standards prescribed under the Companies (Accounting Standards), Rules, 2006 and the relevant provisions of the Companies Act, 1956.

b) Fixed Assets

i) Fixed assets are stated at cost (net of CENVAT wherever applicable) less accumulated depreciation. Cost is inclusive of freight, duties and levies and any directly attributable cost of bringing the assets to their working conditions for intended use but excludes recoveries. Intangibles are stated at cost less accumulated amount of amortisation.

c) INVESTMENTS

Long term Investments are stated at cost. However, diminution in value other than temporary is provided. The Profit/Loss arising on account of sales is recognised in the Profit and Loss Account. The reduction in carrying amount is reversed when there is a rise in the value of investments or if the reasons for the reduction no longer exist.

d) DEPRECIATION/AMORTISATION

Tangible Assets

i) Depreciation on fixed assets is provided on straight line method at rates and in the manner prescribed in Schedule-XIV of the Companies Act, 1956 except straight line rate on Dies & Moulds at 95% per annum which is higher than the rate prescribed in the above schedule: The rate of depreciation on dies & moulds reflect the estimated useful life of such assets.

ii) Depreciation on building other than above is calculated on the revalued amount at the rates considered appropriate by the Valuer. Out of the above, depreciation on original cost on straight line method basis as prescribed by the Companies Act, 1956 (as amended) is charged to Profit & Loss Account and balance for the year is set off against transfer from Revaluation Reserve.

iii) Assets costing upto Rs.5,000/- each are depreciated fully in the year of purchase.

iv) Lease hold Land is amortised over the period of lease.

Intangible Assets

v) Computer Software is amortized over a period of five years / two years.

e) INVENTORIES

Inventories are valued at lower of cost or net realisable value. i) Cost of Raw Materials, Stores, Spares etc. is determined on first in first out basis but excludes sales tax on such purchases within Haryana which is set off against the Sales tax liability on goods produced from such purchases and sold during the year. Excise duty is not included in cost as the Cenvat benefit goes to reduce the cost of materials purchased.

ii) The cost of finished goods and work in progress includes cost of raw material and factory overheads. Provision of excise duty on finished goods is made in accounts and is also considered to determine the cost of stock of finished goods.

f) REVENUE RECOGNITION

i) Sales are recognised when goods are supplied to the customers. Sales are stated gross of excise duty as well as net of excise duty, excise duty being the amount included in gross turnover. Sales are recorded net of, sales tax, returns/rebate and trade discounts.

ii) Dividend income on investments is accounted for when the right to receive the same is established.

g) BORROWING COSTS

Borrowing costs that are attributable to the acquisition, construction or production of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is an asset that necessarily requires a substantial period of time to get ready for its intended use or sale. All other borrowing costs are charged to revenue.

h) EMPLOYEE BENEFITS

Contributions to defined Contribution Schemes such as Provident Fund etc are charged to the Profit & Loss Account as and when incurred.

The Gratuity Fund benefits are administered by a Trust recognised by income Tax Authorities through the Group Scheme of LIC of India. The liability for gratuity at the end of each financial year is determined on the basis of actuarial valuation carried out by the Insurer's actuary on the basis of projected unit credit method as confirmed to the Company. Company's contributions are charged to the Profit and Loss Account.

Liability on account of short term employee benefits comprising largely of compensated absences, bonus and other incentives is recognised on an undiscounted accrual basis.

i) TAXATION

Provision for income tax is made based on the liability computed in accordance with relevant tax rates and tax laws.

Deferred tax is recognised, subject to the consideration of prudence, on 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.

j) MISC EXPENDITURE

Expenses incurred on compensation paid to workers on Voluntary Retirement Scheme are considered as deferred revenue expenditure and amortized over a period of three years.

k) IMPAIRMENT OF ASSETS

Regular review is done to determine whether there is any indication of impairment of the carrying amount of the Company's fixed assets. If any such indication exists, impairment loss i.e. the amount by which the carrying amount of an asset exceeds its recoverable amount is provided in the books of accounts. In case there is any indication that an impairment loss recognized for an asset in prior accounting periods no longer exists or may have decreased, the recoverable value is reassessed and the reversal of impairment loss is recognized as income in the Profit and Loss Account.

I) FOREIGN EXCHANGE TRANSACTIONS

Transactions in foreign currencies are recorded at the exchange rates prevailing on the date of transactions. Transactions outstanding at year end are translated at exchange rates prevailing at the year end and the profit / loss so determined is recognised in the Profit and Loss Account.

m) PROVISIONS AND CONTINGENT LIABILITIES

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

Provisions are reviewed at each balance sheet date and are adjusted to effect the current best estimation. A disclosure of contingent liability is made when there is a possible obligation or a present obligation that will probably not require outflow of resources or where a reliable estimate of the obligation can not be made.

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Mar 31, 2010

A) BASIS OF PREPARATION OF FINANCIAL STATEMENT

Basis of Accounting:

The financial statements have been prepared and presented under the historical cost convention on accrual basis of accounting to comply with the accounting prescribed in the companies (Accounting Standards) Rules, 2006 and with the relevant provisions of the Companies, 1956.

b) FIXED ASSETS

Fixed assets are stated at cost (net of CENVAT wherever applicable) less accumulated depreciation. Cost is inclusive of freight, duties and levies and any directly attributable cost of bringing the assets to their working conditions for intended use but excludes recoveries. Intangibles are stated at cost less accumulated amount of amortisation.

c) INVESTMENTS

Long term Investments are stated at cost. However, diminution in value other than temporary is provided The Profit/ Loss arising on account of sales is recognised in the Profit and Loss Account. The reduction in carrying amount is reversed when there is a rise in the value of investments or if the reasons for the reduction no longer exist.

d) DEPRECIATION/AMORTISATION

Tangible Assets

i) Depreciation on fixed assets is provided on straight line method at rates and in the manner prescribed in Schedule-XIV of the Companies Act, 1956 except straight line rate on Dies & Moulds at 95% per annum which is higher than the rate prescribed in the above schedule: The rate of depreciation on dies & moulds reflect the estimated useful life of such assets.

ii) Depreciation on building other than above is calculated on the revalued amount at the rates considered appropriate by the Valuer. Out of the above, depreciation on original cost on straight line method basis as prescribed by the Companies Act, 1956 (as amended) is charged to Profit & Loss Account and balance for the year is set off against transfer from Revaluation Reserve.

iii) Assets costing upto Rs.5,000/- each are depreciated fully in the year of purchase.

iv) Lease hold Land is amortised over the period of lease.

Intangible Assets

v) Computer Software is amortized over a period of five years / two years.

e) INVENTORIES

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

i) Cost of Raw Materials, Stores, Spares etc. is determined on first in first out basis but excludes sales tax on such purchases within Haryana which is set off against the Sales tax liability on goods produced from such purchases and sold during the year. Excise duty is not included in cost as the Cenvat benefit goes to reduce the cost of materials purchased.

ii) The cost of finished goods and work in progress includes cost of raw material and factory overheads. Provision of excise duty on finished goods is made in accounts and is also considered to determine the cost of stock of finished goods.

f) REVENUE RECOGNITION

i) Sales are recognised when goods are supplied to the customers and are recorded net of excise duty, sales tax, returns/rebate and trade discounts.

ii) Dividend income on investments is accounted for when the right to receive the same is established.

g) BORROWING COSTS

Borrowing costs that are attributable to the acquisition, construction or production of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is an asset that necessarily requires a substantial period of time to get ready for its intended use or sale. All other borrowing costs are charged to revenue.

h) EMPLOYEE BENEFITS

Contributions to defined Contribution Schemes such as Provident Fund etc are charged to the Profit & Loss Account as and when incurred.

The Gratuity Fund benefits are administered by a Trust recognised by income Tax Authorities through the Group Scheme of DC of India. The liability for gratuity at the end of each financial year is determined on the basis of actuarial valuation carried out by the Insurers actuary on the basis of projected unit credit method as confirmed to the Company. Companys contributions are charged to the Profit and Loss Account.

Liability on account of short term employee benefits comprising largely of compensated absences, bonus and other incentives is recognised on an undiscounted accrual basis.

i) TAXATION

Provision for income tax is made based on the liability computed in accordance with relevant tax rates and tax laws

Deferred tax is recognised, subject to the consideration of prudence, on 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. j) MISC. EXPENDITURE

Expenses incurred on compensation paid to workers on Voluntary Retirement Scheme are considered as deferred revenue expenditure and amortized over a period of three years.

k) IMPAIRMENT OF ASSETS

After a careful evaluation of the assets, the Company identifies impairment of assets i.e. the amount by which carrying amount of assets exceed their recoverable value. Impairment losses, if any, are dealt as per Accounting Standard (AS)-28.

l) FOREIGN EXCHANGE TRANSACTIONS

Transactions in foreign currencies are recorded at the exchange rates prevailing on the date of transactions. Transactions outstanding at year end are translated at exchange rates prevailing at the year end and the profit / loss so determined is recognised in the Profit and Loss Account.

m) PROVISIONS AND CONTINGENT LIABILITIES

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

Provisions are reviewed at each balance sheet date and are adjusted to effect the current best estimation. A disclosure of contingent liability is made when there is a possible obligation or a present obligation that will probably not require outflow of resources or where a reliable estimate of the obligation can not be made.