Accounting Policies of Dewan Tyres Ltd. Company

Mar 31, 2014

The Financial Statements have been prepared in accordance with applicable Accounting Standards and relevant presentational requirements of The Companies Act, 1956 and are based on the historical cost convention on accrual basis as a going concern and comply with the Accounting Standards referred to in Section 211 (3C) of the Companies Act,1956. The Significant Accounting Policies followed by the Company are stated below:

(a) Fixed Assets:

Fixed Assets are stated at cost of acquisition/construction less accumulated depreciation.

(b) Depreciation:

Depreciation is provided on Straight Line Method at the rates prescribed under Schedule XIV of the Companies Act, 1956 except that the depreciation in respect of Plant and Machinery as charged taking the average life expectancy of twenty years on Main Machinery and ten years on Moulds etc. based on technical evaluation.

(c) Investments:

Investments are stated at cost less any permanent diminution, in value, if any.

(d) Inventories:

(i) Raw Materials: At Cost applying FIFO Method.

(ii) Work-in-Process: At estimated cost.

(iii) Finished Goods: At cost or market value, which is lower. Excise Duty on goods manufactured by Company and remaining in inventory is included as a part of valuation of finished goods.

(e) Revenue Recognition:

Sales comprise sale of goods and services. Sales of goods is recognised at the point of despatch of finished goods to customers. Sales are exclusive of Excise Duty and Sales Tax.

(f) Foreign Currency Transactions:

Foreign Currency Transactions are accounted for at exchange rates prevailing on the date the transactions take place. The difference between the actual amounts received/paid and the amount accounted for is charged to the Statement of Profit and Loss.

(g) Research and Development Expenses:

Revenue expenditure pertaining to research and development is charged to revenue in the year in which itis incurred. Capital Expenditure is treated as forming part of Fixed Assets.

(h) Income Tax:

The Income tax is ascertained on the basis of assessable profits computed in accordance with the provisions of The Income Tax Act, 1961.

(i) Deferred Taxation:

Deferred Tax resulting from timing differences between book and tax profits is accounted for under the liability method, at the current rate of tax, to the extent that the timing differences are expected to crystallise.