Amal Ltd 2012-13

ii) Depreciation on additions to the assets during the year is being provided on pro-rata basis at their respective rate with reference to the month of acquisition | installation as required by ScheduleXIV to theCompanies Act,1956. iii) Depreciation on assets sold, scrapped or discarded during the year is being provided at their respective rates up to the month in which such assets are sold, scrapped or discarded, as requiredby Schedule XIV to theCompaniesAct,1956. iv) Depreciation is adjusted in subsequent periods to allocate the assets revised carrying amount after the recognition of an impairment loss on a systematic basis over its remaining useful life. 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 will be recognised wherever the carrying amount of an asset exceeds its recoverable amount.The recoverable amount is greater of the asset's net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to the present value by using weighted average cost of capital. A previously recognised impairment loss is further providedor reverseddependingon changes in circumstances. Borrowing costs in relation to acquisition and construction of qualifying assets are capitalised as part of cost of such assets up to the date when such assets are ready for intended use. Other borrowing costs are charged as expense in the year inwhich these are incurred. Investments that are intended to be held for more than a year, from the date of acquisition, are classified as long - term investments and are carried at cost. However, provision for diminution in value of investments is made to recognise a decline, other than temporary, in the value of the investments. i) Raw materials, packing materials and fuel are valued at cost or net realisable value whichever is lower . Cost is arrived at onFIFObasis. ii) Stores and spares other than specific spares for machinery are valued at cost. Cost is arrived at on weighted average basis. iii) Materials - in - process and finished goods are valued at cost or net realisable value whichever is lower. Finishedgoods stocks are valuedat full absorption cost (Including ExciseDuty). iv) Materials in transit and inBondedWarehouse are statedat the cost to thedateof Balance Sheet. i) Initial recognition: Transactions denominated in foreign currencies are recorded at the rate prevailing on the date of the transaction. ii) Conversion: At the year end, monetary items denominated in foreign currencies remaining unsettled are converted into rupee equivalents at the year end exchange rates.Non monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at thedateof the transaction. iii) Exchangedifferences: All exchange differences arising on settlement and conversion of foreign currency transactions are included in the Statement of Profit and loss. F. Impairmentof Assets: G. BorrowingCosts: H. Investments: I. Inventories: J. ForeignCurrencyTransaction: 35 Notes to financial statements