Accounting Policies of Subhash Silk Mills Ltd. Company

Mar 31, 2024

a. Basis of accounting

In accordance with the notification issued by the Ministry of Corporate Affairs, the Company
has adopted Indian Accounting Standards (referred to as “Ind AS”) notified under the
Companies (Indian Accounting Standards) Rules, 2015 with effect from April 1, 2017.

These financial statements have been prepared in accordance with Ind AS as notified under
the Companies (Indian Accounting Standards) Rule, 2015 read with Section 133 of the
Companies Act, 2013.

b. Use of estimates

The presentation of Financial Statements requires management to make estimates and
assumptions that affect the reported amounts of assets, liabilities, revenues and expenses
and disclosure of contingent liabilities. The estimates and assumption used in the
accompanying Financial Statements are based upon management''s evaluation of the
relevant facts and circumstances as of the date of the financial statement. Actual results
may differ from the estimates and assumptions used in preparing the accompanying
Financial statements.

c. Basis of preparation

These financial statements have been prepared on the historical cost basis, except for
certain financial instruments which are measured at fair values at the end of each
reporting period, as explained in the accounting policies below.

Historical cost is generally based on the fair value of the consideration given in exchange
for goods and services.

Fair value is the price that would be received to sell an asset or paid to transfer a liability
in an orderly transaction between market participants at the measurement date.

d. Property, plant & equipment

Property, Plant and Equipments are stated at cost of acquisition, including any attributable
cost for bringing the asset to its working condition for its intended use, less accumulated
depreciation and impairment loss except plant & machinery, which have revalued, are
stated at revalued figure.

Intangible assets purchased are measured at cost or fair value as of the date of acquisition,
as applicable, less accumulated amortization and accumulated impairment, if any.

e. Depreciation

Depreciation is provided on the Straight-Line Method at the manner prescribed under
schedule II of the companies Act, 2013.

f. Inventories

Inventories of Fabrics is valued at Lower of cost and market value

g. Investment

i) Non-current investment is carried at fair value through OCI.

ii) Current investment is carried at fair value through OCI.

h. Revenue recognition

i) The revenue is recognized as and when goods are dispatched to the party, in case of
sale of services on completion of Job and in case of sale of trading, on raising of
invoice and transfer of material to the party.

ii) Other income is recognized on accrual basis.

i. Retirement benefits

PF and other retirement benefits are not applicable to the Company.

Gratuity is accounted for as per Ind AS-19 issued by the Institute of Chartered Accountants
of India, on the basis of actuarial valuation.

j. Foreign currency transactions

Foreign currency transactions are recorded at the exchange rates prevailing on the date of
transaction. Gains & Losses arising out of subsequent fluctuations are accounted for on actual
payment or realization. Current assets & liabilities denominated in foreign currency as at the
Balance Sheet date are converted at the exchange rates prevailing on that date. Exchange
differences are recognized in the Profit & Loss Account.

k. Taxes on income

Current tax is determined as the amount of tax payable in respect of estimated taxable income
for the year. Deferred tax is recognized subject to the consideration of prudence, on timing
deference, being the difference between taxable income & accounting income that originate
in one period and are capable of reversal in one or more subsequent periods.

l. Financial assets and liabilities

Financial assets and liabilities are recognized when the Company becomes a party to the
contractual provisions of the instrument. Financial assets and liabilities are initially
measured at fair value. Transaction costs that are directly attributable to the acquisition or
issue of financial assets and financial liabilities (other than financial assets and financial
liabilities at fair value through profit or loss) are added to or deducted from the fair value
measured on initial recognition of financial assets or financial liability.

m. Borrowing cost

Borrowing cost incurred in relation to the acquisition, construction of asset is capitalized as
the part of the cost of such assets up to the date when such assets are ready for intended use.
Other borrowing costs are charged as expenses in the year in which these are incurred.

n. Impairment of assets

Impairment loss is provided to the extent the carrying amounts of assets exceed their
recoverable amount. Recoverable amount is the higher of an assets net selling price and its
value in use. Value in use is the present value of estimated future cash flows expected to arise
from the continuing use of an asset and from its disposal at the end of its useful life. Net selling
price is the amount obtainable from the sale of an asset in an arms length transaction between
knowledgeable, willing parties, less the costs of disposal.

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Mar 31, 2015

(i) BASIC OF PREPARATION OF FINANCIAL STATEMENTS

(a) The financial statements have been prepared under the historical cost convention, in accordance with the generally accepted accounting principles and the provisions of the Companies Act, 1956 as adopted consistently by the Company

(b) Accounting policies not specifically referred to otherwise are consistent with generally accepted accounting principles followed by the Company.

(ii) USE OF ESTIMATES

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

(iii) FIXED ASSETS

Fixed assets have been stated at cost of acquisition including incidental charges to bring the asset into the working condition for the intended use less depreciation.

(iv) DEPRECIATION AND AMORTISATION

(a) Depreciation on fixed assets are provided on straight line method at the rates prescribed under Schedule XIV of the Companies Act, 2013, subject to writing off of 95% of the original cost.

(b) Difference in Depreciation due to changes in the Companies Act, 2013 have been debited / credited to the Capital Reserves.

(v) IMPAIRMENT

Impairment loss is recognized whenever the carrying amount of an asset is in excess of its recoverable amount and the same is recognized as an expense in the statement of profit and loss and carrying amount of the asset is reduced to its recoverable amount.

Reversal of impairment losses recognized in prior years is recorded when there is an indication that the impairment losses recognized for the asset no longer exist or have decreased.

(vi) INVESTMENTS

All long term Investments are valued at cost. However Provision for Diminution is made if such diminution is permanent is nature.

(vii) INVENTORIES

(a) Inventories of fabric and garments are valued at the lower of cost and estimated net realizable value, after providing for cost of obsolescence. Finished goods and Work-in-progress include an appropriate proportion of overheads and, where applicable, excise duty.

(viii) SALES

Sales comprises of Sale of fabric, garments and flats less rebates, incentives and returns.

(ix) RECOGNITION OF REVENUE

(a) Sales : Sales of fabrics and garments are recognized as and when the goods are dispatched to the party.

(b) Other Income: Other Income is recognized as and when it has become due.

(x) RETIREMENT BENEFIT SCHEMES

Provision for retirement benefits, to the extent applicable to the Company, has been provided as follows:

(a) Provident Fund is not applicable to the Company.

(b) Gratuity has not been provided in the books of accounts as the same will be charged as and when paid.

(c) Leave encashment has not been provided in the books of accounts as the same will be charged as and when paid.

(xi) TAXATION

Provision for current income tax is made in accordance with the Income Tax Act, 1961. Deferred tax liabilities and assets are recognized at substantively enacted tax rates, subject to the consideration of prudence, on timing difference, 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.

(xii) METHOD OF ACCOUNTING

The Company follows mercantile system of accounting, Income and Expenditure are accounted for on accrual basis unless otherwise stated.

(xiii) BORROWING COSTS

Interest and other costs incurred for acquisition of qualifying assets, upto the date of commissioning / installation, are capitalized as part of the cost of the said asset.

(xiv) FOREIGN CURRENCY TRANSLATION

Liabilities / Assets in foreign currencies are reckoned in the accounts as per the following governing principles :

(a) All foreign currency transactions, except (b) below mentioned, are recorded at the rate prevailing on the date of the transaction and the exchange difference arising out of the year end transactions are charged to the Profit & Loss Account.

(b) All foreign currency Assets and Liabilities are restated at the exchange rate prevailing at the year end. The net variation arising out of the said translation are adjusted to the cost of the Fixed Assets. Depreciation on such variation is provided for the full year.

(xv) PROVISIONS, CONTINGENT LIABILITIES and CONTINGENT ASSETS

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

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Mar 31, 2014

(i) BASIC OF PREPARATION OF FINANCIAL STATEMENTS

(a) The financial statements have been prepared under the historical cost convention, in accordance with the generally accepted accounting principles and the provisions of the Companies Act, 1956 as adopted consistently by the Company

(b) Accounting policies not specifically referred to otherwise are consistent with generally accepted accounting principles followed by the Company.

(ii) USE OF ESTIMATES

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

(iii) FIXED ASSETS

Fixed assets have been stated at cost of acquisition including incidental charges to bring the asset into the working condition for the intended use less depreciation.

(iv) DEPRECIATION AND AMORTISATION

(a) Depreciation on fixed assets are provided on straight line method at the rates prescribed under Schedule XIV of the Companies Act, 1956, subject to writing off of 95% of the original cost.

(v) IMPAIRMENT

Impairment loss is recognized whenever the carrying amount of an asset is in excess of its recoverable amount and the same is recognized as an expense in the statement of profit and loss and carrying amount of the asset is reduced to its recoverable amount.

Reversal of impairment losses recognized in prior years is recorded when there is an indication that the impairment losses recognized for the asset no longer exist or have decreased.

(vi) INVESTMENTS

All long term Investments are valued at cost. However Provision for Diminution is made if such diminution is permanent is nature.

(vii) INVENTORIES

(a) Inventories of fabric and garments are valued at the lower of cost and estimated net realizable value, after providing for cost of obsolescence. Finished goods and Work-in- progress include an appropriate proportion of overheads and, where applicable, excise duty.

(b) Inventory of flats are valued at the lower of cost and estimated net realizable value.

(viii) SALES

Sales comprises of sale of fabric, garments and flats less rebates, incentives and returns.

(ix) RECOGNITION OF REVENUE

(a) Sales : Sales of fabrics and garments are recognized as and when the goods are dispatched to the party.

(b) Sale of Flats are recognized as and when the document is registered and possession is given to the party.

(b) Other Income: Other Income is recognized as and when it has become due.

(x) RETIREMENT BENEFIT SCHEMES

Provision for retirement benefits, to the extent applicable to the Company, has been provided as follows:

(a) Provident Fund is not applicable to the Company.

(b) Gratuity has not been provided in the books of accounts as the same will be charged as and when paid.

(c) Leave encashment has not been provided in the books of accounts as the same will be charged as and when paid.

(xi) TAXATION

Provision for current income tax is made in accordance with the Income Tax Act, 1961. Deferred tax liabilities and assets are recognized at substantively enacted tax rates, subject to the consideration of prudence, on timing difference, 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.

(xii) METHOD OF ACCOUNTING

The Company follows mercantile system of accounting, Income and Expenditure are accounted for on accrual basis unless otherwise stated.

(xii) BORROWING COSTS

Interest and other costs incurred for acquisition of qualifying assets, upto the date of commissioning / installation, are capitalized as part of the cost of the said asset.

(xiv) FOREIGN CURRENCY TRANSLATION

Liabilities / Assets in foreign currencies are reckoned in the accounts as per the following governing principles :

(a) All foreign currency transactions, except (b) below mentioned, are recorded at the rate prevailing on the date of the transaction and the exchange difference arising out of the year end transactions are charged to the Profit & Loss Account.

(b) All foreign currency Assets and Liabilities are restated at the exchange rate prevailing at the year end. The net variation arising out of the said translation are adjusted to the cost of the Fixed Assets. Depreciation on such variation is provided for the full year.

(xv) PROVISIONS, CONTINGENT LIABILITIES and CONTINGENT ASSETS

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

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Mar 31, 2013

(i) BASIC OF PREPARATION OF FINANCIAL STATEMENTS

(a) The financial statements have been prepared under the historical cost convention, in accordance with the generally accepted accounting principles and the provisions of the Companies Act, 1956 as adopted consistently by the Company

(b) Accounting policies not specifically referred to otherwise are consistent with generally accepted accounting principles followed by the Company.

(II) USE OF ESTIMATES

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

(III) FIXED ASSETS

Fixed assets have been stated at cost of acquisition including incidental charges to bring the asset into the working condition for the intended use less depreciation. (iv) DEPRECIATION AND AMORTISATION

(a) Depreciation on fixed assets are provided on straight line method at the rates prescribed under Schedule XIV of the Companies Act, 1956, subject to writing off of 95% of the original cost. (v) IMPAIRMENT

Impairment loss is recognized whenever the carrying amount of an asset is in excess of its recoverable amount and the same is recognized as an expense in the statement of profit and loss and carrying amount of the asset is reduced to its recoverable amount.

Reversal of impairment losses recognized in prior years is recorded when there is an indication that the impairment losses recognized for the asset no longer exist or have decreased.

(vi) INVESTMENTS

All long term Investments are valued at cost. However Provision for Diminution is made if such diminution is permanent is nature. (vii) INVENTORIES

(a) Inventories of fabric and garments are valued at the lower of cost and estimated net realizable value, after providing for cost of obsolescence. Finished goods and Work-in-progress include an appropriate proportion of overheads and, where applicable, excise duty.

(b) Inventory of flats are valued at the lower of cost and estimated net realizable value. (vin) SALES

Sales comprises of sale of fabric, garments and flats less rebates, incentives and returns. (ix) RECOGNITION OF REVENUE

(a) Sales : Sales of fabrics and garments are recognized as and when the goods are dispatched to the party.

(b) Sale of Flats are recognized as and when the document is registered and possession is given to the party.

(c) Other Income: Other Income is recognized as and when it has become due. (x) RETIREMENT BENEFIT SCHEMES

Provision for retirement benefits, to the extent applicable to the Company, has been provided as follows:

(a) Provident Fund is not applicable to the Company.

(b) Gratuity has not been provided in the books of accounts as the same will be charged as and when paid.

(c) Leave encashment has not been provided in the books of accounts as the same will be charged as and when paid.

(xi) TAXATION

Provision for current income tax is made in accordance with the Income Tax Act, 1961. Deferred tax liabilities and assets are recognized at substantively enacted tax rates, subject to the consideration of prudence, on timing difference, 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.

(xn) METHOD OF ACCOUNTING

The Company follows mercantile system of accounting, Income and Expenditure are accounted for on accrual basis unless otherwise stated.

(xm) BORROWING COSTS

Interest and other costs incurred for acquisition of qualifying assets, upto the date of commissioning / installation, are capitalized as part of the cost of the said asset.

(xiv) FOREIGN CURRENCY TRANSLATION

Liabilities / Assets in foreign currencies are reckoned in the accounts as per the following governing principles :

(a) All foreign currency transactions, except (b) below mentioned, are recorded at the rate prevailing on the date of the transaction and the exchange difference arising out of the year end transactions are charged to the Profit & Loss Account.

(b) All foreign currency Assets and Liabilities are restated at the exchange rate prevailing at the year end. The net variation arising out of the said translation are adjusted to the cost of the Fixed Assets. Depreciation on such variation is provided for the full year.

(xv) PROVISIONS, CONTINGENT LIABILITIES and CONTINGENT ASSETS

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

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Mar 31, 2012

(i) BASIC OF PREPARATION OF FINANCIAL STATEMENTS

(a) The financial statements have been prepared under the historical cost convention' in accordance with the generally accepted accounting principles and the provisions of the Companies Act' 1956 as adopted consistently by the Company

(b) Accounting policies not specifically referred to otherwise are consistent with generally accepted accounting principles followed by the Company.

(II) USE OF ESTIMATES

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

(III) FIXED ASSETS

Fixed assets have been stated at cost of acquisition including incidental charges to bring the asset into the working condition for the intended use less depreciation.

(iv) DEPRECIATION AND AMORTISATION

(a) Depreciation on fixed assets are provided on straight line method at the rates prescribed under Schedule XIV of the Companies Act' 1956' subject to writing off of 95% of the original cost.

(v) IMPAIRMENT

Impairment loss is recognized whenever the carrying amount of an asset is in excess of its recoverable amount and the same is recognized as an expense in the statement of profit and loss and carrying amount of the asset is reduced to its recoverable amount.

Reversal of impairment losses recognized in prior years is recorded when there is an indication that the impairment losses recognized for the asset no longer exist or have decreased.

(vi) INVESTMENTS

All long term Investments are valued at cost. However Provision for Diminution is made if such diminution is permanent is nature.

(vii) INVENTORIES

Inventories are valued at the lower of cost and estimated net realizable value' after providing for cost of obsolescence. Finished goods and Work-in-progress include an appropriate proportion of overheads and' where applicable' excise duty.

(vin) SALES

Sales comprises of sale of fabric' garments and racks less rebates' incentives and returns.

(ix) RECOGNITION OF REVENUE

(a) Sales : Sales is recognized as and when the goods are dispatched to the party.

(b) Other Income: Other Income is recognized as and when it has become due.

(x) RETIREMENT BENEFIT SCHEMES

Provision for retirement benefits' to the extent applicable to the Company' has been provided as follows:

(a) Provident Fund is not applicable to the Company.

(b) Gratuity has not been provided in the books of accounts as the same will be charged as and when paid.

(c) Leave encashment has not been provided in the books of accounts as the same will be charged as and when paid.

(xi) TAXATION

Provision for current income tax is made in accordance with the Income Tax Act' 1961.

Deferred tax liabilities and assets are recognized at substantively enacted tax rates' subject to the consideration of prudence' on timing difference' 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.

(xii) METHOD OF ACCOUNTING

The Company follows mercantile system of accounting' Income and Expenditure are accounted for on accrual basis unless otherwise stated.

(xiii) BORROWING COSTS

Interest and other costs incurred for acquisition of qualifying assets' upto the date of commissioning / installation' are capitalized as part of the cost of the said asset.

(xiv) FOREIGN CURRENCY TRANSLATION

Liabilities /Assets in foreign currencies are reckoned in the accounts as per the following governing principles :

(a) All foreign currency transactions' except (b) below mentioned' are recorded at the rate prevailing on the date of the transaction and the exchange difference arising out of the year end transactions are charged to the Profit & Loss Account.

(b) All foreign currency Assets and Liabilities are restated at the exchange rate prevailing at the year end. The net variation arising out of the said translation are adjusted to the cost of the Fixed Assets. Depreciation on such variation is provided for the full year.

(xv) PROVISIONS' CONTINGENT LIABILITIES and CONTINGENT ASSETS

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

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Mar 31, 2011

(I) BASIC OF PREPARATION OF FINANCIAL STATEMENTS

(a) The financial statements have been prepared under the historical cost convention, in accordance with the generally accepted accounting principles and the provisions of the Companies Act, 1956 as adopted consistently by the Company

(b) Accounting policies not specifically referred to otherwise are consistent with generally accepted accounting principles followed by the Company.

(II) USE OF ESTIMATES

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

(III) FIXED ASSETS

Fixed assets have been stated at cost of acquisition including incidental charges to bring the asset into the working condition for the intended use less depreciation.

(iv) DEPRECIATION

(a) Depreciation on fixed assets are provided on straight line method at the rates prescribed under Schedule XIV of the Companies Act, 1956, subject to writing off of 95% of the original cost.

(v) IMPAIRMENT

Impairment loss is recognized whenever the carrying amount of an asset is in excess of its recoverable amount and the same is recognized as an expense in the statement of profit and loss and carrying amount of the asset is reduced to its recoverable amount.

Reversal of impairment losses recognized in prior years is recorded when there is an indication that the impairment losses recognized for the asset no longer exist or have decreased.

(vi) INVESTMENTS

All long term Investments are valued at cost. However Provision for Diminution is made if such diminution is permanent is nature.

(vii) INVENTORIES

Inventories are valued at the lower of cost and estimated net realizable value, after providing for cost of obsolescence. Finished goods and Work-in-progress include an appropriate proportion of overheads and, where applicable, excise duty.

(viii) SALES

Sales comprises of sale of fabric, garments and racks less rebates, incentives and returns.

(ix) RECOGNITION OF REVENUE

(a) Sales : Sales is recognized as and when the goods are dispatched to the party.

(b) Other Income: Other Income is recognized as and when it has become due.

(x) RETIREMENT BENEFIT SCHEMES

Provision for retirement benefits, to the extent applicable to the Company, has been provided as follows:

(a) Provident Fund is not applicable to the Company.

(b) Gratuity has not been provided in the books of accounts as the same will be charged as and when paid.

(c) Leave encashment has not been provided in the books of accounts as the same will be charged as and when paid.

(xi) TAXATION

Provision for current income tax is made in accordance with the Income Tax Act, 1961. Deferred tax liabilities and assets are recognized at substantively enacted tax rates, subject to the consideration of prudence, on timing difference, 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.

(xii) METHOD OF ACCOUNTING

The Company follows mercantile system of accounting, Income and Expenditure are accounted for on accrual basis unless otherwise stated.

(xiii) BORROWING COSTS

Interest and other costs incurred for acquisition of qualifying assets, up to the date of commissioning / installation, are capitalized as part of the cost of the said asset.

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Mar 31, 2010

(a) The financial statements have been prepared under the historical cost convention, in accordance with the generally accepted accounting principles and the provisions of the Companies Act, 1956 as adopted consistently by the Company

(b) Accounting policies not specifically referred to otherwise are consistent with generally accepted accounting principles followed by the Company.

(ii) USE OF ESTIMATES

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

(iii) FIXED ASSETS

Fixed assets have been stated at cost of acquisition including incidental charges to bring the asset into the working condition for the intended use less depreciation.

(iv) DEPRECIATION

Depreciation on fixed assets are provided on straight line method at the rates prescribed under Schedule XIV of the Companies Act, 1956, subject to writing off of 95% of the original cost.

(v) IMPAIRMENT

Impairment loss is recognized whenever the carrying amount of an asset is in excess of its recoverable amount and the same is recognized as an expense in the statement of profit and loss and carrying amount of the asset is reduced to its recoverable amount.

Reversal of impairment losses recognized in prior years is recorded when there is an indication that the impairment losses recognized for the asset no longer exist or have decreased.

(vi) INVESTMENTS

All long term Investments are valued at cost. However Provision for Diminution is made if such diminution is permanent is nature.

(vii) INVENTORIES

Inventories are valued at the lower of cost and estimated net realizable value, after providing for cost of obsolescence. Finished goods and Work-in-progress include an appropriate proportion of overheads and, where applicable, excise duty.

(viii) SALES

Sales comprises of sale of fabric, garments and racks less rebates, incentives and returns.

(ix) RECOGNITION OF REVENUE

(a) Sales : Sales is recognized as and when the goods are dispatched to the party.

(b) Other Income: Other Income is recognized as and when it has become due.

(x) RETIREMENT BENEFIT SCHEMES

Provision for retirement benefits, to the extent applicable to the Company, has been provided as follows:

(a) Provident Fund is not applicable to the Company.

(b) Gratuity has not been provided in the books of accounts as the same will be charged as and when paid.

(c) Leave encashment has not been provided in the books of accounts as the same will be charged as and when paid.

(xi) TAXATION

Provision for current income tax is made in accordance with the Income Tax Act, 1961. Deferred tax liabilities and assets are recognized at substantively enacted tax rates, subject to the consideration of prudence, on timing difference, 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.

(xii) METHOD OF ACCOUNTING

The Company follows mercantile system of accounting, Income and Expenditure are accounted for on accrual basis unless otherwise stated.

(xiii) BORROWING COSTS

Interest and other costs incurred for acquisition of qualifying assets, upto the date of commissioning / installation, are capitalized as part of the cost of the said asset.

(xiv) FOREIGN CURRENCY TRANSLATION

Liabilities / Assets in foreign currencies are reckoned in the accounts as per the following governing principles:

(a) All foreign currency transactions, except (b) below mentioned, are recorded at the rate prevailing on the date of the transaction and the exchange difference arising out of the year end transactions are charged to the Profit & Loss Account.

(b) All foreign currency Assets and Liabilities are restated at the exchange rate prevailing at the year end. The net variation arising out of the said translation are adjusted to the cost of the Fixed Assets. Depreciation on such variation is provided for the full year.