Accounting Standard 16: Borrowing Costs Statement to be applied in accounting for borrowing costs.

ts. Statement does not deal with the actual or imputed cost of owners equity/preference capital. Borrowing costs that are directly attributable to the acquisition, construction or production of any qualifying asset (assets that takes a substantial period of time to get ready for its intended use or sale) should be capitali ed. !enerally, a period of "# months is considered as a substantial period of time ($S%&" %ncorporated in ($S) "' (Borrowing )osts( as an e*planation below para +.#). Borrowing costs may include, %nterest and commitment charges on Bank Borrowings, -ther short term and other long term borrowings $mortisation of ancillary costs incurred in connection with the arrangement of borrowings. $mortisation of discounts or premium relating to borrowings. .inance charges in respect of assets acquired under finance leases or under other similar arrangements/ and 0*change differences arising from foreign currency borrowings to the e*tent that they are regarded as an ad1ustment to interest costs. %ncome on the temporary in2estment of the borrowed funds be deducted from borrowing costs. %n case of funds obtained generally and used for obtaining a qualifying asset, the borrowing cost to be capitali ed is determined by applying weighted a2erage of borrowing cost on outstanding borrowings, other than borrowings for obtaining qualifying asset. )apitali ation of borrowing cost should commence when e*penditure for acquisition, construction or production is being incurred, borrowing costs is incurred and acti2ities necessary to prepare the asset for its intended use or sale are in progress. )apitali ation of borrowing costs should be suspended during e*tended periods in which de2elopment is interrupted. 3hen the e*pected cost of the qualifying asset e*ceeds its reco2erable amount or 4et 5eali able 6alue, the carrying amount is written down. )apitali ation should cease when acti2ity is completed substantially or if completed in parts, in respect of that part, all the acti2ities for its intended use or sale are complete. .inancial statements to disclose accounting policy adopted for borrowing cost and also the amount of borrowing costs capitali ed during the period. %n case e*change difference on foreign currency borrowings represent sa2ing in interest, compared to interest rate for the local currency borrowings, it should be treated as part of interest cost for $S "' ($S%&"7 %ncorporated in ($S) "' (Borrowing )osts( as an e*planation below para 8(e)).

Accounting Standard 17: Segment Reporting

5equires reporting of financial information about different types of products and ser2ices an enterprise pro2ides and different geographical areas in which it operates. $ business segment is a distinguishable component of an enterprise pro2iding a product or ser2ice or group of products or ser2ices that is sub1ect to risks and returns that are different from other business segments. $ geographical segment is distinguishable component of an enterprise pro2iding products or ser2ices in a particular economic en2ironment that is sub1ect to risks and returns that are different from components operating in other economic en2ironments. %nternal organi ational management structure, internal financial reporting system is normally the basis for identifying the segments. 9he dominant source and nature of risk and returns of an enterprise should go2ern whether its primary reporting format will be business segments or geographical segments. $ business segment or geographical segment is a reportable segment if re2enue from sales to e*ternal customers and from transactions with other segments e*ceeds "7: of total re2enues (e*ternal and internal) of all segments/ or segment result, whether profit or loss, is "7: or more of (i) combined result of all segments in profit or (ii) combined result of all segments in loss whiche2er is greater in absolute amount/ or segment assets are "7: or more of all the assets of all the segments. %f there is reportable segment in the preceding period (as per criteria), same shall be considered as reportable segment in the current year. %f total e*ternal re2enue attributable to reportable segment constitutes less than ;<: of total re2enues then additional segments should be identified, for reporting. =nder primary reporting format for each reportable segment the enterprise should disclose e*ternal and internal segment re2enue, segment result, amount of segment assets and liabilities, cost of fi*ed assets acquired, depreciation, amorti ation of assets and other non cash e*penses. %nterest e*pense (on operating liabilities) identified to a particular segment (not of a financial nature) will not be included as part of segment e*pense. >owe2er, interest included in the cost of in2entories (as per $S "') is to be considered as a segment e*pense ($S%&##). 5econciliation between information about reportable segments and information in financial statements of the enterprise is also to be pro2ided. Secondary segment information is also required to be disclosed. 9his includes information about re2enues, assets and cost of fi*ed assets acquired. 3hen primary format is based on geographical segments, certain further disclosures are required. ?isclosures are also required relating to intra&segment transfers and composition of the segment. $S disclosure is not required, if more than one business or geographical segment is not identified >owe2er, the fact that there is only one @business segment and @geographical segment should be disclosed by way of a note.

($S%&#7 5e2ised %ncorporated in ($S) "; (Segment %nformation (5e. $S #7) as an e*planation below para +A.). Accounting Standard 18: Related Party Disclosures 9he statement deals with following related party relationships, (i) 0nterprises that directly or indirectly control (through subsidiaries) or are controlled by or are under common control with the reporting enterprise/ (ii) $ssociates, Boint 6entures of the reporting entity/ %n2esting party or 2enturer in respect of which reporting enterprise is an associate or a 1oint 2enture/ (iii) %ndi2iduals owning 2oting power gi2ing control or significant influence/ (i2) Cey management personnel and their relati2es/ and (2) 0nterprises o2er which any of the persons in (iii) or (i2) are able to e*ercise significant influence. 5emuneration paid to key management personnel falls under the definition of a related party transaction ($S%&#+ %mpliedly incorporated in $S&"A this is only a logical corollary flowing out of $S%&#" incorporated in ($S) "A as an e*planation below para "8.). Darties are considered related if one party has ability to control or e*ercise significant influence o2er the other party in making financial and/or operating decisions. .ollowing are not considered related parties, (i) 9wo companies merely because of common director, (ii) )ustomer, supplier, franchiser, distributor or general agent merely by 2irtue of economic dependence/ and (iii) .inanciers, trade unions, public utilities, go2ernment departments and bodies merely by 2irtue of their normal dealings with the enterprise. ?isclosure under the standard is not required in the following cases (i) %f such disclosure conflicts with duty of confidentially under statute, duty cast by a regulator or a component authority/ (ii) %n consolidated financial statements in respect of intra&group transactions/ and (iii) %n case of state&controlled enterprises regarding related party relationships and transactions with other state&controlled enterprises. 5elati2e (of an indi2idual) means spouse, son, daughter, brother, sister, father and mother who may be e*pected to influence, or be influenced by, that indi2idual in dealings with the reporting entity. 3here there are transactions between the related parties following information is to be disclosed, name of the related party, nature of relationship, nature of transaction and its 2olume (as an amount or proportion), other elements of transaction if necessary for understanding, amount or appropriate proportion outstanding pertaining to related parties, pro2ision for doubtful debts from related parties, amounts written off or written back in respect of debts due from or to related parties. 4ames of the related party and nature of related party relationship to be disclosed e2en where there are no transactions but the control e*ists. %tems of similar nature may be aggregated by type of the related party. 9he type of related party for the purpose of aggregation of items of a similar nature implies related party relationships. Eaterial transactions/ i.e., more than "7: of related party transactions are not to be clubbed in an aggregated disclosure. 9he related party transactions which are not entered in the normal course of the business would ordinarily be considered material ($S%&"+ %ncorporated in ($S) "A (5elated Darty ?isclosures( as an e*planation below para #' and an e*planation (a) below para #;).

$ non&e*ecuti2e director is not a key management person for the purpose of this standard. =nless, F he is in a position to e*ercise significant influence by 2irtue of owning an interest in the 2oting power or, F he is responsible and has the authority for directing and controlling the acti2ities of the reporting enterprise. Eere participation in the policy decision making process will not attract $S "A. ($S%&#" incorporated in ($S) "A (5elated Darty ?isclosures( as an e*planation below para "8).

Accounting Standard 19: eases $pplies in accounting for all leases other than leases to e*plore for or use natural resources, licensing agreements for items such as motion pictures films, 2ideo recordings, plays etc. and lease for use of lands. $ lease is classified as a finance lease or an operating lease. $ finance lease is one where risks and rewards incident to the ownership are transferred substantially/ otherwise it is an operating lease. 9reatment in case of finance lease in the books of lessee, $t the inception, lease should be recognised as an asset and a liability at lower of fair 2alue of leased asset and the present 2alue of minimum lease payments (calculated on the basis of interest rate implicit in the lease or if not determinable, at lessees incremental borrowing rate). Gease payments should be appropriated between finance charge and the reduction of outstanding liability so as to produce a constant periodic rate of interest on the balance of the liability. ?epreciation policy for leased asset should be consistent with that for other owned depreciable assets and to be calculated as per $S '. ?isclosure should be made of assets acquired under finance lease, net carrying amount at the balance sheet date, total minimum lease payments at the balance sheet date and their present 2alues for specified periods, reconciliation between total minimum lease payments at balance sheet date and their present 2alue, contingent rent recognised as income, total of future minimum sub lease payments e*pected to be recei2ed and general description of significant leasing arrangements. 9reatment in case of finance lease in the books of lessor, 9he lessor should recogni e the asset as a recei2able equal to net in2estment in lease. .inance income should be based on pattern reflecting a constant periodic return on net in2estment in lease. Eanufacturer/dealer lessor should recogni e sales as outright sales. %f artificially low interest rates quoted, profit should be calculated as if commercial rates of interest were charged. %nitial direct costs should be e*pensed. ?isclosure should be made of total gross in2estment in lease and the present 2alue of the minimum lease payments at specified periods, reconciliation

between total gross in2estment in lease and the present 2alue of minimum lease payments, unearned finance income, unguaranteed residual 2alue accruing to the lessor, accumulated pro2ision for uncollectible minimum lease payments recei2able, contingent rent recognised, accounting policy adopted in respect of initial direct costs, general description of significant leasing arrangements. 9reatment in case of operating lease in the books of the lessee , Gease payments should be recognised as an e*pense on straightline basis or other systematic basis, if appropriate. ?isclosure should be made of total future minimum lease payments for the specified periods, total future minimum sub lease payments e*pected to be recei2ed, lease payments recognised in the D H G statement with separate amount of minimum lease payments and contingent rents, sub lease payments recognised in the D H G statement, general description of significant leasing arrangements. 9reatment in case of operating lease in the books of the lessor, Gessors should present an asset gi2en on lease under fi*ed assets and lease income should be recognised on a straight&line basis or other systematic basis, if appropriate. )osts including depreciation should be recognised as an e*pense. %nitial direct costs are either deferred o2er lease term or recognised as e*penses. ?isclosure should be made of carrying amount of the leased assets, accumulated depreciation and accumulated impairment loss, depreciation and impairment loss recognised or re2ersed for the period, future minimum lease payments in aggregate and for the specified periods, general description of the leasing arrangement and policy for initial costs. Sale and leaseback transactions %f the transaction of sale and lease back results in a finance lease, any e*cess or deficiency of sale proceeds o2er the carrying amount should be amorti ed o2er the lease term in proportion to depreciation of the leased assets. %f the transaction results in an operating lease and is at fair 2alue, profit or loss should be recognised immediately. But if the sale price is below the fair 2alue any profit or loss should be recognised immediately, howe2er, the loss which is compensated by future lease payments should be amorti ed in proportion to the lease payments o2er the period for which asset is e*pected to be used. %f the sales price is abo2e the fair 2alue the e*cess o2er the fair 2alue should be amortised. %n a transaction resulting in an operating lease, if the fair 2alue is less than the carrying amount of the asset, the difference (loss) should be recognised immediately. Accounting Standard !": #arnings Per S$are .ocus is on denominator to be adopted for earnings per share (0DS) calculation.

%n case of enterprises presenting consolidated financial statements 0DS to be calculated on the basis of consolidated information. 5equirement is to present basic and diluted 0DS on the face of Drofit and Goss statement for each class of equity shares with equal prominence to all periods presented. 0DS required to be presented e2en when negati2e. Basic 0DS is calculated by di2iding net profit or loss for the period attributable to equity shareholders by weighted a2erage of equity shares outstanding during the period. Basic H ?iluted 0DS to be computed on the basis of earnings e*cluding e*traordinary items (net of ta* e*pense). (Gimited 5e2ision w.e.f. "&8&#778) 0arnings attributable to equity shareholders are after the preference di2idend for the period and the attributable ta*. 9he weighted a2erage number of shares for all the periods presented is ad1usted for bonus issue, share split and consolidation of shares. %n case of rights issue at price lower than fair 2alue, there is an embedded bonus element for which ad1ustment is made. .or calculating diluted 0DS, net profit or loss attributable to equity shareholders and the weighted a2erage number of shares are ad1usted for the effects of diluti2e potential equity shares (i.e., assuming con2ersion into equity of all diluti2e potential equity). Dotential equity shares are treated as diluti2e when their con2ersion into equity would result in a reduction in profit per share from continuing operations. 0ffect of anti&diluti2e potential equity share is ignored in calculating diluted 0DS. %n calculating diluted 0DS each issue of potential equity share is considered separately and in sequence from the most diluti2e to the least diluti2e. 9his is determined on the basis of earnings per incremental potential equity. %f the number of equity shares or potential equity shares outstanding increases or decreases on account of bonus, splitting or consolidation during the year or after the balance sheet date but before the appro2al of financial statement, basic and diluted 0DS are recalculated for all periods presented. 9he fact is also disclosed. $mounts of earnings used as numerator for computing basic and diluted 0DS and their reconciliation with Drofit and Goss statement are disclosed. $lso, the weighted a2erage number of equity shares used in calculating the basic 0DS and diluted 0DS and the reconciliation between the two 0DS is to be disclosed. 4ominal 2alue of shares is disclosed along with 0DS. %t has been clarified that if an enterprise discloses 0DS for complying with requirements of any source or otherwise, should calculate and disclose 0DS as per $S #7. ?isclosure under Dart %6 of Schedule 6% to the )ompanies $ct, "I<' should be in accordance with $S #7.

Accounting Standard !1: Consolidated %inancial Statements

9o be applied in the preparation and presentation of consolidated financial statements ().S) for a group of enterprises under the control of a parent. )onsolidated .inancial Statements are recommendatory. >owe2er, if consolidated financial statements are presented, these should be prepared in accordance with the standard. .or listed companies preparing )onsolidated .inancial Statements is mandatory as per listing agreement. )onsolidated financial statements to be presented in addition to separate financial statements. )ontrol means the ownership of more than one half of the 2oting power of an enterprise or control of composition of the Board of ?irectors or such other go2erning body. $ll subsidiaries, domestic and foreign to be consolidated e*cept where control is intended to be temporary/ i.e., intention at the time of in2esting is to dispose the rele2ant in2estment in the @near future or the subsidiary operates under se2ere long&term restrictions impairing transfer of funds to the parent. @4ear future generally means not more than twel2e months from the date of acquisition of rele2ant in2estments ($S%&A %ncorporated in ($S) #" ()onsolidated .inancial Statements( as an e*planation (b) below para "". $lso incorporated in ($S) #+($ccounting for %n2estments in $ssociates in )onsolidated .inancial Statements( as an e*planation below para ; and in ($S) #; (.inancial 5eporting of %nterests in Boint 6entures( as e*planation below para #A). )ontrol is to be regarded as temporary when an enterprise holds shares as @stock&in&trade and has acquired and held with an intention to dispose them in the near future ($S%&#< %ncorporated in ($S) #" ()onsolidated .inancial Statements( as an e*planation (a) below para %%.). %n2estments in subsidiary should be accounted in accordance. ).S normally includes consolidated balance sheet, consolidated D H G, notes and other statements necessary for preparing a true and fair 2iew. )ash flow only in case parent presents cash flow statement. )onsolidation to be done on a line by line basis by adding like items of assets, liabilities, income and e*penses which in2ol2es, 0limination of cost to the parent of its in2estment in each subsidiary and the parents portion of equity of each subsidiary at the date of in2estment. 9he difference to be treated as goodwill/capital reser2e, as the case may be. Einority interest in the net income to be ad1usted against income of the group. Einority interest in net assets to be shown separately as a liability. %ntra&group balances and intra&group transactions and resulting unrealised profits should be eliminated in full. =nrealised losses should also be eliminated unless cost cannot be reco2ered. 9he ta* e*pense (current ta* and deferred ta*) of the parent and its subsidiaries to be aggregated and it is not required to recompute the ta* e*pense in conte*t of consolidated information ($S%&#' %ncorporated in ($S) #" ()onsolidated .inancial Statements( as an e*planation (a) below para "+). 9he parents share in the post&acquisition reser2es of a subsidiary is not required to be disclosed separately in the consolidated balance sheet. ($S%&#A

%ncorporated in ($S) #" ()onsolidated .inancial Statements( as an e*planation below para "+ and in ($S) #; (.inancial 5eporting of %nterests in Boint 6entures as an e*planation below para +#). 3here two or more in2estments are made in a subsidiary, equity of the subsidiary to be generally determined on a step by step basis. .inancial statements used in consolidation should be drawn up to the same reporting date. %f reporting dates are different, ad1ustments for the effects of significant transactions/e2ents between the two dates to be made. )onsolidation should be prepared using same accounting policies. %f the accounting policies followed are different, the fact should be disclosed together with proportion of such items. %n the year in which parent subsidiary relationship ceases to e*ist, consolidation of D H G account to be made up to date of cessation. ?isclosure is to be of all subsidiaries gi2ing name, country of incorporation or residence, proportion of ownership interest and 2oting power held if different. $lso nature of relationship between parent and subsidiary if parent does not own more than one half of 2oting power, effect of the acquisition and disposal of subsidiaries on the financial position, names of the subsidiaries whose reporting dates are different than that of the parent. 3hen the consolidated statements are presented for the first time, figures for the pre2ious year need not be gi2en. 4otes forming part of the separate financial statements of the parent enterprise and its subsidiaries which are material to represent a true and fair 2iew are required to be included in the notes to the consolidated financial statements ($S%&"< incorporated in ($S) #" ()onsolidated .inancial Statements( as an e*planation below para '). ?eferred ta* should be recognised for all the timing differences, sub1ect to the consideration of prudence in respect of deferred ta* assets (?9$). 3hen enterprise has unabsorbed depreciation or carry forward ta* losses, ?9$ to be recognised only if there is 2irtual certainty supported by con2incing e2idence of future ta*able income. =nrecognised ?9$ to be reassessed at each balance sheet date. 6irtual certainty refers to the fact that there is practically no doubt regarding the determination of a2ailability of the future ta*able income. $lso, con2incing e2idence is required to support the 1udgment of 2irtual certainty ($S%&I incorporated in ($S) ## ($ccounting for 9a*es on %ncome( as an e*planation below para ";). %n respect of loss under the head )apital !ains, ?9$ shall be recognised only to the e*tent that there is a reasonable certainty of sufficient future ta*able capital gain ($S% & 8). ?9$ to be recognised on the amount, which is allowed as per the pro2isions of the $ct/ i.e., loss after considering the cost inde*ation as per the %ncome&ta* $ct. 9reatment of deferred ta* in case of $malgamation ($S%&"" 4ot incorporated in 4otified $Ss).

Accounting Standard !!: Accounting &or 'a(es on )ncome

in case of amalgamation in nature of purchase, where identifiable assets / liabilities are accounted at the fair 2alue and the carrying amount for ta* purposes continue to be the same as that for the transferor enter price, the difference between the 2alues shall be treated as a permanent difference and hence it will not gi2e rise to any deferred ta*. 9he consequent difference in depreciation charge of the subsequent years shall also be treated as a permanent difference. 9he transferee company can recognise a ?9$ in respect of carry forward losses of the transferor enterprise, if conditions relating to prudence as per $S ## are satisfied, though transferor enterprise would not ha2e recognised such deferred ta* assets on account of prudence. $ccounting treatment will depend upon nature of amalgamation, which shall be as follows , F %n case of amalgamation is in the nature of purchase and assets and liabilities are accounted at the fair 2alue, ?9$ should be recognised at the time of amalgamation (sub1ect to prudence). F %n case of amalgamation is in the nature of purchase and assets and liabilities are accounted at their e*isting carrying 2alue, ?9$ shall not be recognised at the time of amalgamation. >owe2er, if ?9$ gets recognised in the first year of amalgamation, the effect shall be through ad1ustment to goodwill/ capital reser2e. F %n case of amalgamation is in the nature of merger, the deferred ta* assets shall not be recognised at the time of amalgamation. >owe2er, if ?9$ gets recognised in the first year of amalgamation, the effect shall be gi2en through re2enue reser2es. F %n all the abo2e if the ?9$ cannot be recognised by the first annual balance sheet following amalgamation, the corresponding effect of this recognition to be gi2en in the statement of profit and loss.

9a* e*penses for the period, comprises of current ta* and deferred ta*. )urrent ta* Jincludes payment u/s ""<BB of the $ct ($S%&') incorporated in ($S) ## ($ccounting for 9a*es on %ncome( as an e*planation below para #"K. should be measured at the amount e*pected to be paid to (reco2ered from) the ta*ation authorities, using the applicable ta* rates. ?eferred ta* assets and liabilities should be measured using the ta* rates and ta* laws that ha2e been enacted or substanti2ely enacted by the balance sheet date and should not be discounted to their present 2alue. ?eferred 9a* to be measured using the regular ta* rates for companies that pay ta* u/s ""<BB of the $ct ($S%&' incorporated in ($S) ## ($ccounting for 9a*es on %ncome( as an e*planation below para #"). ?9$ should be disclosed separately after the head @%n2estments and deferred ta* liability (?9G) should be disclosed separately after the head @=nsecured Goans ($S%&; incorporated in ($S) ## ($ccounting for 9a*es on %ncome( as an e*planation below para +7) in the balance sheet of the enterprise. $ssets and liabilities to be netted off only when the enterprise has a legally enforceable right to set off and intends to settle on net basis. 9he break&up of deferred ta* assets and deferred ta* liabilities into ma1or components of the respecti2e balances should be disclosed in the notes to accounts.

9he nature of the e2idence supporting the recognition of deferred ta* assets should be disclosed, if an enterprise has unabsorbed depreciation or carry forward of losses under ta* laws. 9he deferred ta* assets and liabilities in respect of timing differences which originate during the ta* holiday period and re2erse during the ta* holiday period, should not be recognised to the e*tent deduction from the total income of an enterprise is allowed during the ta* holiday period. >owe2er, if timing differences re2erse after the ta* holiday period, ?9$ and ?9G should be recognised in the year in which the timing differences originate. 9iming differences, which originate first, should be considered for re2ersal first ($S%&+) and ($S%&< incorporated in ($S) ## ($ccounting for 9a*es on %ncome( as an e*planation below para "+). -n the first occasion of applicability of this $S the enterprise should recognise, the deferred ta* balance that has accumulated prior to the adoption of this Statement as deferred ta* asset/liability with a corresponding credit / charge to the re2enue reser2es.

Accounting Standard !*: Accounting &or )n+estments in Associates in Consolidated %inancial Statements Statement sets out principles and procedures for recognising in )onsolidated .inancial Statement the effect of in2estments in associates on the financial position and operating results of the group. $ssociates is an enterprise in which the in2estor has significant influence and which is neither a subsidiary nor a 1oint 2enture or the in2estor. Significant influence (ordinarily ha2ing #7: or more of the 2oting power) is termed as power to participate in the financial/operating policy decisions but does not ha2e control o2er such policies. 9he potential equity shares held by the in2estee should not be taken into account for determining the 2oting power of the in2estor. ($S%&"A %ncorporated in ($S) #+ ($ccounting for %n2estments in $ssociates in )onsolidated .inancial Statements( as an e*planation below para 8). %n2estment in associates is accounted in ).S as per equity method. 9he equity method is not applicable where the in2estment is acquired for temporary period ($S%&A incorporated in ($S) #" ()onsolidated .inancial Statements( as an e*planation (b) below para ""). $lso incorporated in ($S) #+($ccounting for %n2estments in $ssociates in )onsolidated .inancial Statements( as an e*planation below para ; and in ($S) #; (.inancial 5eporting of %nterests in Boint 6entures( as e*planation below para #A), i.e. intention at the time of in2esting is to dispose the rele2ant in2estment in the @near future or where associates operate under se2ere long&term restrictions. %n these circumstances, the in2estment should be recognised as per $S "+. 9he use of equity method to be discontinued from the date when in2estor ceases to ha2e significant influence in an associate. Dro2ision for proposed di2idend made by the associate in its financial statements, should not be considered for the computation of the in2estors share of the results of operations of the associate ($S%&"' incorporated in ($S) #+ ($ccounting for %n2estments in $ssociates in )onsolidated .inancial Statements( as an e*planation (b) below para '). !oodwill/)apital 5eser2e on the acquisition of an associate should be separately disclosed under carrying amount of in2estments.

=nder the equity method, unrealised profit/losses resulting from the transaction between in2estor and associates should be eliminated to the e*tent of in2estors interest in the associates. >owe2er unrealised losses should not be eliminated if cost of the assets cannot be reco2ered. %f associate has outstanding preference shares held outside the group, preference di2idends whether declared or not, be ad1usted in arri2ing at the in2estors share of profit or loss. %f in2estors share of losses of an associate equals or e*ceeds the carrying amount of the in2estment, the in2estor will discontinue its share of loss and will show its in2estment at nil 2alue. 3here an associate presents consolidated financial statement, the results and net assets of the associates ).S should be taken into account. Gisting and description of associates including proportion of ownership interest and proportion of 2oting power should be disclosed in ).S. 9he in2estors share of profits or losses and any e*tra& ordinary or prior period items should be disclosed separately in ).S Drofit and Goss $/c. %f reporting dates or accounting policies of associates are different from that of financial statement of in2estor then the difference should be reported in the ).S. -n the first occasion when in2estment in an associate is accounted for in ).S, the carrying amount of in2estment in the associate should be ad1usted by using equity method, from the date of acquisition, with the corresponding ad1ustment to the retained earnings in ).S. 9he standard requires an enterprise to segregate information about discontinuing operations from continuing one and establishes principles for reporting information about discontinuing operations. $ discontinuing operation is a component of an enterprise that the enterprise is, in pursuant to a single plan is F (a) disposing substantially in its entirety such as by selling the component in a single transaction or by demerger or spin off of the ownership of the component to the enterprises shareholders / (b) disposing of piecemeal, such as by selling of the components assets and settling its liabilities indi2idually or (c) terminating through abandonment and it represents separate line of business or geographical area of operations/ can be distinguished operationally and for financial reporting purposes. $ll these three conditions need to be satisfied simultaneously. %nitial ?isclosure 02ent is the earliest occurrence of one of the following ,F a. 0ntering into binding sale agreement for substantially all of the assets attributable to the ?iscontinuing -peration. b. 0nterprises !o2erning body has appro2ed a detailed, formal plan for the discontinuance and made announcement of the plan.

Accounting Standard !,: Discontinuing -perations

9he statement does not establish any recognition and measurement principles. %t requires enterprise to follow principles established in other $ccounting Standard for the purpose of changes in assets, liabilities, re2enue, e*penses etc.

$n enterprise should include the following information in its financial statements beginning with the financial period in which the @%nitial ?isclosure 02ent occurs, (a) ?escription of discontinuing operation, (b) Segment in which it is reported as per $S ";, (c) ?ate and nature of %nitial ?isclosure 02ent, (d) 9ime by which the discontinuation is e*pected to be completed, (e) 9he carrying amounts of the assets to be disposed of, (f) 5e2enue, e*penses, pre& ta* profit / loss, income&ta* in relation to the ordinary acti2ities of identified discounting operations. -n disposal of assets or settlement of liabilities, disclosure is required for gain/loss recognised on disposal/settlement and income ta* e*penses thereto. -n entering into binding contract for sale of assets, disclosure is required for 4et Selling price after deducting e*pected disposal cost, the e*pected timing of cash flow and the carrying amount of assets on the balance sheet date. .or period subsequent to initial disclosure e2ent period, description of any significant changes in amount or timing of cash flow is required to be disclosed. 9he disclosures to continue up to the period in which the discontinuance is completed/ i.e., discontinuance plan is substantially completed or abandoned. %n case discontinuance plan is abandoned, the disclosure is required of this fact, reason therefore and its effect on the financial statements. $ll disclosures should be separately presented for each discontinuing operation. ?isclosure of pre&ta* profit/loss from ordinary acti2ities of the discontinuing operation, income ta* e*penses related thereto, pre&ta* gain/loss recognised on the disposal / settlement to be made on the face of profit and loss account. )omparati2e information for prior periods to be re&stated to segregate discontinuing operations. %n the %nterim financial report, disclosure is required in accordance with $S #< for any significant acti2ities or e2ent and any significant changes in the amount or timing of cash flows relating to disposal/settlement. %n case the initial disclosure e2ent occurs between the balance sheet date and the date on which the financial statement for that period are appro2ed by the board of directors, disclosures are required by $ccounting Standards 8 are made. %nterim financial reports (%.5) are financial statements (complete or condensed) for an interim period that is shorter than a full financial year. %.5 should include at a minimum a condensed balance sheet, condensed profit and loss statement, cash flow and selected e*planatory notes. %.5 should include at least each of the heading and sub headings that were included in the most recent annual financial statements. 0arnings per share if disclosed is to be calculated and presented as per $S #7. 4otes to include at least

Accounting Standard !.: )nterim %inancial Reporting

F a statement on uniform accounting policies or any change therein. F e*planatory comments about the seasonality of interim operations. F any unusual items (as per $S <) F changes in estimates of amounts reported in prior interim periods/year, if material. F issuances, buy&backs repayments and restructuring of debt, equity and potential equity shares. F di2idend for each class of equity shares. F segment reporting if required as per $S "; F any changes in composition of the enterprise. F material changes in contingent liabilities. %nterim reports to include

F Balance sheet as of the end of current interim period and a comparati2e balance sheet as of the end of the preceding financial year. F Statements of Drofit H Goss for current interim period and cumulati2e for current financial year to date and comparati2e statements of the pre2ious year (current and year to date) F )ash flow statement cumulati2ely for the current financial year to date with a comparati2e statement of pre2ious year (year to date) %nterim measurements may rely on estimates. .or final interim period separate report not necessary as annual statements are presented. =niform accounting policies to be applied in interim and annual financial statements. Seasonal/occasional re2enues and une2en costs to be anticipated or deferred only if appropriate to do so at the end of the financial year. 0stimates to be measured in such a way that resulting information is reliable and all material information disclosed. %n case of change of accounting policies, other than one for which transition is specified by an accounting standard, figures of prior interim periods of current financial year to be restated.

4ote, 9he presentation and disclosure requirements contained in $S #< are not required to be applied in respect of @%nterim financial results F e*ample, the one presented under )lause 8" of the Gisting $greement, since they do not meet the definition of @interim financial report. >owe2er, the recognition and measurement principles as per $S #< should be applied. ($S%&#; 4ot incorporated in 4otified $S). Accounting Standard !6: )ntangi/le Assets 4ot applicable to intangibles co2ered by other $S, financial assets, mineral rights/e*penditure on e*ploration, etc. and arising in insurance enterprises from contracts with policy holders. 9his $S is not applicable to e*penditure in respect of termination benefits. $n intangible asset is an identifiable non&monetary asset, without physical substance, held for use in the production or supply of goods or ser2ices, for rental to others, or for administrati2e purposes. $n asset is a resource,

F controlled by an enterprise as a result of past e2ents/ and F from which future economic benefits are e*pected to flow to the enterprise.

=seful life is period of time o2er which an asset is e*pected to be used or the number of production units e*pected to be obtained from the asset. %mpairment loss is the amount by which the carrying amount e*ceeds its reco2erable amount. $n intangible asset to be recognised only if future economic benefits will flow and the cost of the asset can be measured reliably. Drobability of future economic benefits to be assessed using reasonable and supportable assumptions. $n intangible asset should be measured initially at cost. %nternally generated goodwill, brands, mastheads, publishing titles etc. should not be recognised as an asset. 4o intangible asset arising from research to be recognised and e*penditure on research should be recognised as an e*pense, when incurred. $n intangible asset arising from de2elopment to be recognised, if an enterprise can demonstrate its feasibility to complete, intention and ability to use or sell, generation of future economic benefits, and a2ailability of resources for completion and ability to measure the e*penditure. 0*penditure on an intangible item that cannot be treated as an asset, should be recognised as an e*pense and treated as goodwill (capital reser2e), in case of an amalgamation ($S "8). 9reatment of e*penditure (other than e*penditure on 65S) incurred on intangible items, which do not meet the criteria of an @intangible asset, o %f incurred after the date of $S #' becoming mandatory F to be e*pensed out when incurred/ F 9he balances of e*penditure incurred before the date of $S #' becoming mandatory and appearing in the balance sheet, should continue to be e*pensed out o2er a number of years as originally contemplated/ F %f such balances ha2e been ad1usted against the opening balances of re2enue reser2es as on "&8&#77+, it should be rectified and treated on the abo2e lines.

0*penditure, on an intangible item recognised as an e*pense should not form part of cost of an intangible asset at a later date. Subsequent e*penditure to be added to cost only if is probable that the e*penditure will generate future benefits in e*cess of the original estimates. $n intangible asset should be carried at its cost less any accumulated amortisation and any accumulated impairment losses. $n intangible asset should be amortised o2er its useful life on a systematic basis, to reflect the pattern in which the economic benefits are consumed or if the pattern cannot be determined reliably, on the straightline method. 9here is a rebuttable presumption for useful life of an intangible asset F not e*ceeding ten years from the date it is a2ailable for use. %n case of intangible assets in form of legal rights, the useful life is not to e*ceed the period of the legal rights, unless renewable, which is 2irtually certain.

5esidual 2alue to be taken as ero unless a commitment to purchase the asset or an acti2e market e*ists. 9he amortisation period and method to be re2iewed at each financial year end and any change to be accounted for as per $S <. $ny impairment losses to be recognised. 9he reco2erable amount of each intangible asset to be estimated at each year end in case of an intangible asset which is not yet a2ailable for use and one which is amortised o2er a period e*ceeding ten years. $n intangible asset to be derecognised on disposal or when no future economic benefits are e*pected from its use and gain or loss recognised. ?isclosure for each class of intangibles, their useful li2es, amortisation, amount and method, carrying amount (gross and net), accumulated amortisation, any additions, retirements, impairment losses recognised or re2ersed and any other change. %n case of useful life of an intangible asset e*ceeding ten years, proper disclosure of the reasons for the same should be gi2en. 5esearch and ?e2elopment e*penditure recognised as e*pense to be disclosed. -n standard being applicable, ad1ustment to any intangible asset as required to be made with a corresponding ad1ustment to the opening re2enue reser2es. $ 1oint 2enture is a contractual arrangement whereby two or more parties undertake an economic acti2ity, which is sub1ect to 1oint control. %n cases, wherein an enterprise by a contractual arrangement establishes 1oint control o2er an entity which is a subsidiary (as per $S #") the entity is to be consolidated under $S #" and is not to be treated as a 1oint 2enture as per this Statement. 9he other 2enturer(s) may treat the same as a 1oint 2enture. (Gimited 5e2ision to $S #; w.e.f. "&8&#778)

Accounting Standard !7: %inancial Reporting o& )nterests in 0oint 1entures

Boint control is the contractually agreed sharing of control o2er an economic acti2ity. .or e2aluating 1oint control, one need to consider whether the contractual arrangement pro2ides protecti2e rights or participating rights to the enterprise. 9he e*istence of participating rights would be e2idence of 1oint control. 3ith effect from "&8&#778 this e*planation is remo2ed by Gimited 5e2ision to the Standard.

)ontrol is the power to go2ern the financial and operating policies of an economic acti2ity so as to obtain benefits from it. $ 2enturer is a party to a 1oint 2enture and has 1oint control o2er that 1oint 2enture. $n in2estor in a 1oint 2enture is a party to a 1oint 2enture and does not ha2e 1oint control o2er that 1oint 2enture. Droportionate consolidation is a method of accounting and reporting whereby a 2enturers share of each of the assets, liabilities, income and e*penses of a

1ointly controlled entity is reported as separate line items in the 2enturers financial statements. 9he 2enturers share in the post acquisition reser2es of the 1ointly controlled entity should be shown separately under the rele2ant reser2es in the consolidated financial statements ($S% #A incorporated in ($S) #" ()onsolidated .inancial Statements( as an e*planation below para "+ and in ($S) #; (.inancial 5eporting of %nterests in Boint 6entures( as an e*planation below para +#). 6enturer to recognise in indi2idual and consolidated financial statements its share of assets, liabilities, incomes and e*penses in the 1ointly controlled operations and also in 1ointly controlled assets. %n 2enturers separate financial statements any interest in a 1ointly controlled entity to be accounted as an in2estment and $S "+ to be followed. %n a 2enturers consolidated financial statements interest in 1ointly controlled entity to be reported using proportionate consolidation e*cept F when interest is acquired and held with a 2iew of disposal in near future to be considered as not more than "# months from acquisition of rele2ant in2estments unless a longer period can be 1ustified on the basis of facts and circumstances ($S% A incorporated in ($S) #" ()onsolidated .inancial Statements( as an e*planation (b) below para "". $lso incorporated in ($S) #+($ccounting for %n2estments in $ssociates in )onsolidated .inancial Statements( as an e*planation below para ; and in ($S) #; (.inancial 5eporting of %nterests in Boint 6entures( as an e*planation below para #A) F when se2ere long&term restrictions that impair the ability to transfer funds to the 2enturer e*ists. F in such cases interest to be accounted as in2estments as per $S "+. 9he 2enturers share in the post acquisition reser2es of the 1ointly controlled entity should be shown separately under the rele2ant reser2es in the consolidated financial statements ($S%&#A incorporated in ($S) #" ()onsolidated .inancial Statements( as an e*planation below para "+ and in ($S) #; (.inancial 5eporting of %nterests in Boint 6entures( as an e*planation below para +#). $ 2enturer to discontinue use of proportionate consolidation from the date F it ceases to ha2e 1oint control (may retain interest) F use of proportionate consolidation is no longer appropriate. %n such cases $S #", be followed if 2enturer becomes parent and in other cases $S "+ and/or $S #+ to be followed. )ost in such cases is the 2enturers share in net assets on date of discontinuance of proportionate consolidation as ad1usted with carrying amount of the rele2ant goodwill/capital reser2e recognised at the time of acquisition. %n case of sale of assets by a 2enturer to the 1oint 2enture the 2enturer should recognise only that portion of gain or loss as attributable to the interests of the other 2enturers. .ull loss to be booked in case of e2idence of reduction in the net realisable 2alue of current assets or on impairment loss.

%n case of purchase of assets by a 2enturer from a 1oint 2enture, the 2enturer should recognise its share of profit only on a resale of the asset to an independent party. Goss to be booked in case of reduction in net realisable 2alue of current asset or impairment loss. %n case of transactions between 2enturer and 1oint 2enture the abo2e principles to be followed only in consolidated financial statements. %n2estor to follow $S "+, $S #" and $S #+ as appropriate, for in2estments in 1oint 2entures. -perators/Eanagers of 1oint 2entures to account for fees as per $S I. $ 2enturer to disclose separately, in respect of the 1oint 2enture, contingent liabilities and capital commitments. $ 2enturer to disclose list of 1oint 2entures and interests in significant 1oint 2entures. $ 2enturer to disclose aggregate amounts of each of the assets, liabilities, income and e*penses related to its interests in the 1ointly controlled entities. $pplied in accounting for the impairment of all assets, other than, F F F F in2entories ($S #)/ assets arising from construction contracts ($S ;)/ financial assets, including in2estments ($S "+)/ deferred ta* assets ($S ##).

Accounting Standard !8 : )mpairment o& Assets

5eco2erable amount is the higher of an assets net selling price and its 2alue in use. 6alue in use is the present 2alue of estimated future cash flows e*pected to arise from the continuing use of an asset and from its disposal at the end of its useful life. $n impairment loss is the amount by which the carrying amount of an asset e*ceeds its reco2erable amount. =seful life is either, F the period of time o2er which an asset is e*pected to be used/ or F the number of production or similar units e*pected to be obtained from the asset.

$ cash generating unit is the smallest identifiable group of assets that generates cash inflows largely independent of the cash inflows from other assets. )orporate assets are assets other than goodwill that contribute to the future cash flows of both the cash generating unit under re2iew and other cash generating units. $n acti2e market is a market where, F F F F the items traded are homogeneous/ willing buyers and sellers can normally be found at any time/ and prices are a2ailable to the public. to assess at each balance sheet date whether there are any indication,

e*ternal or internal as gi2en in $S, that an asset may be impaired and estimate the reco2erable amount of the asset. %n measuring 2alue in use, F cash flow pro1ections should be based on assumptions that represent managements best estimate of the set of economic conditions that will e*ist o2er the remaining useful life of the asset. !reater weight should be gi2en to e*ternal e2idence/ F cash flow pro1ections should be based on the most recent financial budgets/forecasts (ma*imum < years, unless longer period 1ustified) that ha2e been appro2ed by management. F cash flow pro1ections beyond the period co2ered by the most recent budgets/forecasts should be estimated by e*trapolating the pro1ections based on the budgets/forecasts using a steady or declining growth rate for subsequent years, unless an increasing rate can be 1ustified. 9his growth rate should not e*ceed the long&term a2erage growth rate for the products, industries, or country or countries in which the enterprise operates, or for the market in which the asset is used, unless a higher rate can be 1ustified. 0stimates of future cash flows should include, F pro1ections of cash inflows from the continuing use of the asset/ F pro1ections of cash outflows that are necessarily incurred to generate the cash inflows from continuing use of the asset (including cash outflows to prepare the asset for use) and that can be directly attributed, or allocated on a reasonable and consistent basis, to the asset/ and F net cash flows, if any, to be recei2ed (or paid) for the disposal of the asset at the end of its useful life. .uture cash flows should be estimated for the asset in its current condition. 9hey should not include estimated future cash inflows or outflows that are e*pected to arise from, F a future restructuring to which an enterprise is not yet committed/ or F future capital e*penditure that will impro2e or enhance the asset in e*cess of its originally assessed standard of performance. 0stimates of future cash flows should not include, F cash inflows or outflows from financing acti2ities/ or F income ta* receipts or payments. 9he estimate of net cash flows to be recei2ed (or paid) for the disposal of an asset at the end of its useful life should be the amount that is e*pected to be obtained from the disposal of the asset in an arms length transaction between knowledgeable, willing parties, after deducting the estimated costs of disposal. 9he discount rate should be a pre ta* rate that reflect current market assessments of the time 2alue of money and the risks specific to the asset

and should not reflect risks for which future cash flow estimates ha2e been ad1usted. $n impairment loss should be recognised as an e*pense in the profit and loss account immediately. %mpairment loss of a re2alued asset should be treated as a re2aluation decrease as per $S "7. %f the estimated impairment loss is greater than the carrying amount of the asset, recognise a liability if, and only if, required by another $S. 9he depreciation/amortisation charge for the asset should be ad1usted in future periods to allocate the assets re2ised carrying amount, less its residual 2alue on a systematic basis o2er its remaining useful life. %n case of any indication of impairment, the reco2erable amount should be estimated for the indi2idual asset. %f it is not possible, determine the reco2erable amount of the cash&generating unit to which the asset belongs. %f an acti2e market e*ists for the output produced by an asset or a group of assets, the same should be identified as a separate cash&generating unit, e2en if some or all of the output is used internally. %n such case managements best estimate for future market price of output should be used, F in determining the 2alue in use of this cash&generating unit, when estimating the future cash inflows that relate to the internal use of the output/ and F in determining the 2alue in use of other cash&generating units of the reporting enterprise, when estimating the future cash outflows that relate to the internal use of the output. )ash&generating units should be identified consistently from period to period for the same asset or types of assets, unless a change is 1ustified. 9he carrying amount of a cash&generating unit should be determined consistently with the way the reco2erable amount of the cash&generating unit is determined %n testing a cash&generating unit for impairment, identify whether goodwill that relates to this unit is recognised in the financial statements. %f this is the case, an enterprise should, F perform a @bottom&up test. F if, in the @bottom&up test, the carrying amount of goodwill could not be allocated on a reasonable and consistent basis to the cash&generating unit under re2iew, the enterprise should also perform a @top&down test. %n testing a cash&generating unit for impairment, identify all the corporate assets that relate to the cash&generating unit under re2iew. .or each identified corporate asset, apply @bottom&up test or @bottom&up and @top& down test both as required. %mpairment loss should be recognised for a cash&generating unit if, and only if, its reco2erable amount is less than its carrying amount. 9he impairment loss should be allocated to reduce the carrying amount of the assets of the unit in the following order, F first, to goodwill allocated to the cash&generating unit (if any)/ and

F then, to the other assets of the unit on a pro rata basis based on the carrying amount of each asset in the unit. 9hese reductions in carrying amounts should be treated as impairment losses on indi2idual assets and recognised either in D H G account or as re2aluation decrease as applicable. %n allocating an impairment loss, the carrying amount of an asset should not be reduced below the highest of, F its net selling price (if determinable)/ F its 2alue in use (if determinable)/ and F ero. 9he amount of the impairment loss that would otherwise ha2e been allocated to the asset should be allocated to the other assets of the unit on a pro rata basis. $ liability should be recognised for any remaining amount of an impairment loss for a cash&generating unit if, required by another $S. $t each balance sheet date, if there are indications internal or e*ternal, that an impairment loss recognised for an asset in prior accounting periods, no longer e*ists/has decreased, then the reco2erable amount of that asset to be estimated. .or the same consider the following as minimum indications, $n impairment loss recognised for an asset in prior accounting periods should be re2ersed if there is a change in the estimates of cash inflows, cash outflows or discount rates used to determine the assets reco2erable amount since the last impairment loss was recognised. 9he carrying amount of the asset should be increased to its reco2erable amount. 9he increased carrying amount of an asset due to a re2ersal of an impairment loss should not e*ceed the carrying amount that would ha2e been determined (net of amortisation or depreciation) had no impairment loss been recognised for the asset in prior accounting periods. $ re2ersal of an impairment loss for an asset should be recognised as income immediately in profit and loss account. %n case of re2alued assets, the same should be treated as a re2aluation increase as per $S "7. $fter a re2ersal of an impairment loss, the depreciation (amortisation) charge for the asset should be ad1usted in future periods to allocate the assets re2ised carrying amount, less its residual 2alue (if any), on a systematic basis o2er its remaining useful life. $ re2ersal of an impairment loss for a cash&generating unit should be allocated to increase the carrying amount of the assets of the unit in the following order, F first, assets other than goodwill on a pro rata basis based on the carrying amount of each asset in the unit/ and F then, to goodwill allocated to the cash&generating unit, if the requirements of re2ersal of impairment loss of goodwill are met. 9hese increases in carrying amounts should be treated as re2ersals of impairment losses for indi2idual assets and recognised accordingly.

%n allocating a re2ersal of an impairment loss for a cash&generating unit, the carrying amount of an asset should not be increased abo2e the lower of, F its reco2erable amount (if determinable)/ and F the carrying amount that would ha2e been determined (net of amortisation or depreciation) had no impairment loss been recognised for the asset in prior accounting periods.

9he amount of the re2ersal of the impairment loss that would otherwise ha2e been allocated to the asset should be allocated to the other assets of the unit on a pro&rata basis. $n impairment loss recognised for goodwill should not be re2ersed in a subsequent period unless, F the impairment loss was caused by a specific e*ternal e2ent of an e*ceptional nature that is not e*pected to recur/ and F subsequent e*ternal e2ents ha2e occurred that re2erse the effect of that e2ent.

.or each class of assets, the financial statements should disclose, F the amount of impairment losses recognised in the statement of profit and loss during the period and the line item(s) of the statement of profit and loss in which those impairment losses are included/ F the amount of re2ersals of impairment losses recognised in the statement of profit and loss during the period and the line item(s) of the statement of profit and loss in which those impairment losses are re2ersed/ F the amount of impairment losses recognised directly against re2aluation surplus during the period/ and F the amount of re2ersals of impairment losses recognised directly in re2aluation surplus during the period.

$n enterprise that applies $S ";, should disclose the following for each reportable segment based on an enterprises primary format (as defined in $S ";), F the amount of impairment losses recognised in the statement of profit and loss and directly against re2aluation surplus during the period/ and F the amount of re2ersals of impairment losses recognised in the statement of profit and loss and directly in re2aluation surplus during the period. F %f an impairment loss for an indi2idual asset or a cash&generating unit is recognised or re2ersed during the period and is material to the financial statements of the reporting enterprise as a whole, an enterprise should disclose the e2ents and circumstances that led to the recognition or re2ersal of the impairment loss/

the amount of the impairment loss recognised or re2ersed/ o for an indi2idual asset,

F the nature of the asset/ and F the reportable segment to which the asset belongs, based on the enterprises primary format (as per $S ";)/ o for a cash&generating unit, F a description of the cash&generating unit/ F the amount of the impairment loss recognised or re2ersed by class of assets and by reportable segment based on the enterprises primary format (as defined in $S ";)/ and F if the aggregation of assets for identifying the cash&generating unit has changed since the pre2ious estimate of the cash&generating units reco2erable amount (if any), the enterprise should describe the current and former way of aggregating assets and the reasons for changing the way the cash&generating unit is identified/ whether the reco2erable amount of the asset (cash&generating unit) is its net selling price or its 2alue in use/ if reco2erable amount is net selling price, the basis used to determine net selling price/ and if reco2erable amount is 2alue in use, the discount rate used in the current estimate and pre2ious estimate (if any) of 2alue in use. %f impairment losses recognised (re2ersed) during the period are material in aggregate to the financial statements of the reporting enterprise as a whole, an enterprise should disclose a brief description of the following, F the main classes of assets affected by impairment losses (re2ersals of impairment losses) for which no information is disclosed/ and F the main e2ents and circumstances that led to the recognition (re2ersal) of these impairment losses for which no information is disclosed. $s a transitional pro2ision any impairment loss determined before this standard becomes mandatory should be ad1usted against the opening balance of re2enue reser2e. %mpairment losses on re2alued assets to be ad1usted against balance in re2aluation reser2e and e*cess, if any against the opening balance of re2enue reser2e.

Accounting Standard !9: Pro+isions2 Contingent ia/ilities and Contingent Assets 9his statement should be applied in accounting for pro2isions and contingent liabilities and in dealing with contingent assets, other than F F F F 9hose financial instruments that are carried at fair 2alue, those resulting from e*ecutory contracts e*cept onerous contracts, those arising in insurance enterprises from contracts with policy&holders and those co2ered by another $ccounting Standard.

Dro2ision is a liability, which can be measured only by using a substantial degree of estimation.

Giability is a present obligation arising from past e2ents, the settlement of which is e*pected to result in an outflow of resources embodying economic benefits. )ontingent Giability is F F a possible obligation that arises from past e2ents and the e*istence of which will be confirmed only by the occurrence or non&occurrence of one or more uncertain future e2ents not wholly within the control of the enterprise/ or F a present obligation, but is not recognised because it is not probable that outflow of resources embodying economic benefits will be required (or is remote) for its settlement or a reliable estimate of the amount of the obligation cannot be made.

)ontingent asset is a possible asset that arises from past e2ents, the e*istence of which will be confirmed only by the occurrences or non& occurrence of one or more uncertain future e2ents not wholly within the control of the enterprise. $ pro2ision should be recognised when F F an enterprises has a present obligation as a result of a past e2ent/ F it is probable (more likely than not) that an outflow of resources will be required to settle the obligation/ and F a reliable estimate can be made of the amount of the obligation.

$ contingent liability is not recognised in financial statements but is disclosed. $ contingent asset is not recognised in financial statements. 9he amount of pro2ision should be measure before ta* at the best estimate of the e*penditure required to settle the present obligation and should not be discounted to its present 2alue. 9he risks and uncertainties that ine2itably surround many e2ents and circumstances should be taken into account in arri2ing at the best estimate of pro2ision to a2oid its under or o2er statement. 0*pected future e2ents, which are likely to affect the amount required to settle an obligation, may be important in measuring pro2isions. !ains on the e*pected disposal of assets should not be taken into account in measuring a pro2ision, e2en if the e*pected disposal is closely linked with the item requiring pro2ision. 3hene2er all or part of the e*penditure rele2ant to a pro2ision is e*pected to be reimbursed by another party, the reimbursement should be recognised only on 2irtual certainty of its receipt. 9he reimbursement should be treated as a separate asset and should not e*ceed the amount of the pro2ision. %n the statement of profit and loss, the e*pense relating to a pro2ision may be presented net of the amount recognised for a reimbursement. Dro2isions should be re2iewed at each balance sheet date and ad1usted to reflect the current best estimate. 9he pro2ision should be re2ersed, if it is no longer probable to result in a liability.

$ pro2ision should be used only for e*penditures for which the pro2ision was originally recognised and not against a pro2ision recognised for another purpose, so as not to conceal the impact of two different e2ents. Dro2ision should not be recognised for future operating losses, since it is not a liability nor meet the criteria for pro2isions. $ restructuring pro2ision should include only the direct e*penditures, necessarily entailed by the restructuring and not associated with the ongoing acti2ities of the enterprise. ?isclosure F .or each class of pro2ision F the carrying amount at the beginning and end of the period/ additional pro2isions made, amounts used and unused amounts re2ersed during the period. F $lso for each class of pro2ision F description of the nature of the obligation, the e*pected timing of any resulting outflows of economic benefits, the uncertainties about those outflows and the amount of any e*pected reimbursement (also stating the amount of any asset recognised thereof) F .or each class of contingent liability F a brief description of its nature and where practicable, an estimate of its financial effect, the uncertainties relating to any outflow and the possibility of any reimbursement. %f the information is not disclosed, being not practicable, the fact thereof is to be disclosed. F %n e*tremely rare cases, disclosure of any information can be e*pected to pre1udice seriously the position of the enterprise in a dispute with other parties/ in such cases the information need not be disclosed but, the fact and reason for such nonFdisclosure along with the general nature of dispute should be disclosed.

Accounting Standard *" : %inancial )nstruments: Recognition and 3easurement Introduction $S +7 .inancial %nstruments, 5ecognition and Eeasurement comes into effect in respect of accounting periods commencing on or after "&8&#77I and will be recommendatory in nature for an initial period of two years. 9his $ccounting Standard will become mandatory in respect of accounting periods commencing on or after "&8&#7"" for all commercial, industrial and business entities e*cept to a Small and Eedium&si ed 0ntity. $S +7 prescribes principles for recognising and measuring all types of financial instruments e*cept, a. those interests in subsidiaries, associates and 1oint 2entures that are accounted for under $S #", $S #+ or $S #; b. rights and obligations under leases to which $S "I applies. howe2er, o lease recei2ables recognised by a lessor are sub1ect to the derecognition and impairment pro2isions of this standard/ o finance lease payables recognised by a lessee are sub1ect to the derecognition pro2isions of this standard/ and

o deri2ati2es that are embedded in leases are sub1ect to the embedded deri2ati2es pro2isions of this standard c. employers rights and obligations under employee benefit plans to which $S "< applies d. financial instruments issued by the entity that meet the definition of an equity instrument in $S +" (including options and warrants) >owe2er, the holder of such equity instruments should apply this Standard to those instruments, unless they meet the e*ception in (a) abo2e e. rights and obligations under insurance contracts which will be co2ered by proposed $ccounting Standard on %nsurance )ontract, a contract that is within the scope of $ccounting Standard on %nsurance )ontracts because it contains a discretionary participation feature. >owe2er, $S +7 applies to deri2ati2es embedded in such a contract/ f. contracts for contingent consideration in a business combination. 9his e*emption applies only to the acquirer.

g. contracts between an acquirer and a 2endor in a business combination to buy or sell an acquiree at a future date/ h. loan commitments other than those that are designated as financial liabilities at fair 2alue through profit or loss. $n issuer of loan commitments should apply $S #I to those loan commitments that are not within the scope of this standard >owe2er, all loan commitments are sub1ect to the derecognition pro2isions of this Standard i. financial instruments, contracts and obligations under share&based payment transactions, e*cept certain contracts to buy or sell a non&financial item as noted below,

". )ontracts those contracts to buy or sell a non&financial item that can be settled net in cash or another financial instrument, or by e*changing financial instruments, as if the contracts were financial instruments. >owe2er, $S +7 does not apply to any such contracts that were entered into and continue to be held for the purpose of the receipt or deli2ery of a non&financial item in accordance with the entitys e*pected purchase, sale or usage requirements #. )ontract to buy or sell a non&financial item can be settled net in cash or another financial instrument or by e*changing financial instruments. +. $ written option to buy or sell a non&financial item that can be settled net in cash or another financial instrument, or by e*changing financial instruments 8. Daragraphs 'A, 'I and ;7 of this Standard, which should be applied to treasury shares, purchased, sold, issued or cancelled in connection with employee share option plans, employees share purchase plans, and all other share&based payment arrangements Recognition and derecognition $ financial asset or liability is recognised when the entity becomes a party to the instrument contract. $ financial liability is derecognised when the liability is e*tinguished. $ financial asset is derecognised when, and only when, 9he contractual rights to the cash flows from the asset e*pire/ or 9he entity transfers substantially all the risks and rewards of ownership of the asset/ or

9he entity transfers the asset, while retaining some of the risks and rewards of ownership, but no longer has control of the asset (i.e., the transferee has the ability to sell the asset). 9he risks and rewards retained are recognised as an asset.

Measurement .inancial assets and liabilities are initially recognised at fair 2alue. Subsequent measurement depends on how the financial instrument is categorised, $t amortised cost using the effecti2e interest method >eld&to&maturity in2estments, 4on&deri2ati2e financial assets with fi*ed or determinable payments and maturity that the entity has the positi2e intention and ability to hold to maturity. Goans and recei2ables, 4on&deri2ati2e financial assets with fi*ed or determinable payments that are not quoted in an acti2e market. .inancial liabilities that are not held for trading and not designated at fair 2alue through profit or loss. $t fair 2alue through profit or loss, .inancial asset or liability that is classified as held for trading, is a deri2ati2e or has been designated by the entity at inception as at fair 2alue through profit or loss. $2ailable&for&sale financial assets, 4on&deri2ati2e financial assets that do not fall within any of the other categories. 9he unrealised mo2ements in fair 2alue are recognised in equity until disposal or sale, at which time, those unrealised mo2ements from prior periods are recognised in profit or loss.

At fair value

%f there is ob1ecti2e e2idence that a financial asset is impaired, the carrying amount of the asset is reduced and impairment loss is recognised. $ financial asset carried at amortised cost is not carried at more than the present 2alue of estimated future cash flows. $n impairment loss on an a2ailable&for&sale asset that reduces the carrying amount below acquisition cost is recognised in profit or loss. Hedge accounting $S +7 pro2ides for two kinds of hedge accounting, recognising that entities commonly hedge both the possibility of changes in cash flows/ (i.e., a cash flow hedge) and the possibility of changes in fair 2alue (i.e., a fair 2alue hedge). Strict conditions must be met before hedge accounting is applied, 9here is formal designation and documentation of a hedge at inception. 9he hedge is e*pected to be highly effecti2e (i.e., the hedging instrument is e*pected to almost fully offset changes in fair 2alue or cash flows of the hedged item that are attributable to the hedged risk). $ny forecast transaction being hedged is highly probable. >edge effecti2eness is reliably measurable (i.e., the fair 2alue or cash flows of the hedged item and the fair 2alue of the hedging instrument can be reliably measured). 9he hedge must be assessed on an ongoing basis and be highly effecti2e. 3hen a fair 2alue hedge e*ists, the fair 2alue mo2ements on the hedging instrument and the corresponding fair 2alue mo2ements on the hedged item are recognised in profit or loss. 3hen a cash flow hedge e*ists, the fair 2alue

mo2ements, on the part of the hedging instrument that is effecti2e, are recognised in equity until such time as the hedged item affects profit or loss. $ny ineffecti2e portion of the fair 2alue mo2ement on the hedging instrument is recognised in profit or loss. Embedded derivatives $S +7 requires deri2ati2es that are embedded in non&deri2ati2e contracts to be accounted for separately at fair 2alue through profit or loss. Accounting Standard *1 : %inancial )nstruments: Presentation 9his Standard comes into effect in respect of accounting periods commencing on or after "&8&#77I and will be recommendatory in nature for an initial period of two years. 9his $ccounting Standard will become mandatory in respect of accounting periods commencing on or after "&8&#7"" for all commercial, industrial and business entities e*cept to a Small and Eedium&si ed 0ntity. 9his Standard should be applied by all entities to all types of financial instruments e*cept, i. accounted for in accordance with $S #", $S #+, $S #; >owe2er, in some cases, $S #", $S #+ or $S #; permits or requires an entity to account for an interest in a subsidiary, associate or 1oint 2enture using $S +7, in those cases, entities should apply the disclosure requirements in $S #", $S #+ or $S #; in addition to those in this Standard. 0ntities should also apply this Standard to all deri2ati2es linked to interests in subsidiaries, associates or 1oint 2entures. 0mployers rights and obligations under employee benefit plans, to which $S "<, 0mployee Benefits, applies. )ontracts for contingent consideration in a business combination. 9his e*emption applies only to the acquirer. 9he term @Business combination means the bringing together of separate entities or businesses into one reporting entity. $t present, $S "8, deals with accounting for contingent consideration in an amalgamation, which is a form of business combination. 5ights and obligations under insurance contracts which will be co2ered by proposed $ccounting Standard on %nsurance )ontract, a contract that is within the scope of $ccounting Standard on %nsurance )ontracts because it contains a discretionary participation feature. >owe2er, $S +7 applies to deri2ati2es embedded in such a contract/ )ontracts with discretionary clause

ii. iii.

i2.

2.

.inancial instruments, contracts and obligations under share&based payment transactions, e*cept certain contracts to buy or sell a non&financial item as noted below, ". )ontracts those contracts to buy or sell a non&financial item that can be settled net in cash or another financial instrument, or by e*changing financial instruments, as if the contracts were financial instruments. >owe2er, $S +7 does not apply to any such contracts that were entered into and continue to be held for the purpose of the receipt or deli2ery of a non&financial item in accordance with the entitys e*pected purchase, sale or usage requirements #. )ontract to buy or sell a non&financial item can be settled net in cash or another financial instrument or by e*changing financial instruments. +. $ written option to buy or sell a non&financial item that can be settled net in cash or another financial instrument, or by e*changing financial instruments

8. Daragraphs 'A, 'I and ;7 of this Standard, which should be applied to treasury shares, purchased, sold, issued or cancelled in connection with employee share option plans, employees share purchase plans, and all other share&based payment arrangements $S +" applies to those contracts to buy or sell a non&financial item that can be settled net in cash or another financial instrument, or by e*changing financial instruments, as if the contracts were financial instruments. >owe2er, $S +7 does not apply to any such contracts that were entered into and continue to be held for the purpose of the receipt or deli2ery of a non&financial item in accordance with the entitys e*pected purchase, sale or usage requirements. .inancial instruments are classified, from the perspecti2e of the issuer, as financial assets, financial liabilities and equity instruments. )ompound financial instruments may contain both a liability and an equity component. %nterests, di2idends, losses and gains relating to financial liabilities are recogni ed as income or e*pense in profit or loss. ?istributions to holders of equity instruments are debited directly to equity, net of any related income ta* benefit. .inancial assets and financial liabilities are offset when and only when there is a legally enforceable right to set off and the entity intend to settle on a net basis. $S +" requires disclosure about factors that affect the amount, timing and certainty of an entitys future cash flows relating to financial instruments and the accounting policies applied to those instruments. %t also requires disclosure about the nature and e*tent of an entitys use of financial instruments, the business purposes they ser2e, the risks associated with them, and managements policies for controlling those risks. 9he principles in $S +" complement the principles for recogni ing and measuring financial assets and financial liabilities as gi2en in $S +7. Accounting Standard 4AS5 *!2 %inancial )nstruments: Disclosures 9he Standard comes into effect in respect of accounting periods commencing on or after "&8&#77I and will be recommendatory in nature for an initial period of two years. 9his $ccounting Standard will become mandatory in respect of accounting periods commencing on or after "&8&#7"" for all commercial, industrial and business entities e*cept to a Small and Eedium&si ed 0ntity, as defined below, i. ii. iii. i2. 3hose equity or debt securities are not listed or are not in the process of listing on any stock e*change, whether in %ndia or outside %ndia/ which is not a bank (including a co&operati2e bank), financial institution or any entity carrying on insurance business/ whose turno2er (e*cluding other income) does not e*ceed rupees fifty crore in the immediately preceding accounting year/ which does not ha2e borrowings (including public deposits) in e*cess of rupees ten crore at any time during the immediately preceding accounting year/ and which is not a holding or subsidiary entity of an entity which is not a small and medium&si ed entity.

2.

.or the abo2e purpose an entity would qualify as a Small and Eedium&si ed 0ntity, if the conditions mentioned therein are satisfied as at the end of the rele2ant accounting period. Scope

9his $ccounting Standard should be applied by all entities to all types of financial instruments, e*cept, a. those interests in subsidiaries, associates and 1oint 2entures that are accounted for in accordance with $S #", )onsolidated .inancial Statements and $ccounting for %n2estment in Subsidiaries in Separate .inancial Statements, $S #+, $ccounting for %n2estments in $ssociates+, or $S #;, .inancial 5eporting of %nterests in Boint 6entures. >owe2er, in some cases, $S #", $S #+ or $S #; permits or requires an entity to account for an interest in a subsidiary, associate or 1oint 2enture using $ccounting Standard ($S) +7, .inancial %nstruments, 5ecognition and Eeasurement/ in those cases, entities should apply the disclosure requirements in $S #", $S #+ or $S #; in addition to those in this $ccounting Standard. 0ntities should also apply this $ccounting Standard to all deri2ati2es linked to interests in subsidiaries, associates or 1oint 2entures unless the deri2ati2e meets the definition of an equity instrument in $S +". b. employers rights and obligations arising from employee benefit plans, to which $S "<, 0mployee Benefits, applies. c. contracts for contingent consideration in a business combination. 9his e*emption applies only to the acquirer. d. insurance contracts as defined in $ccounting Standard on %nsurance )ontracts. >owe2er, this $ccounting Standard applies to deri2ati2es that are embedded in insurance contracts if $ccounting Standard ($S) +7, .inancial %nstruments, 5ecognition and Eeasurement, requires the entity to account for them separately. Eoreo2er, an issuer should apply this $ccounting Standard to financial guarantee contracts if the issuer applies $S +7 in recognising and measuring the contracts, but should apply the $ccounting Standard on %nsurance )ontracts if the issuer elects, in accordance with the $ccounting Standard on %nsurance )ontracts, to apply that $ccounting Standard in recognising and measuring them. e. financial instruments, contracts and obligations under share&based payment transactions e*cept that this $ccounting Standard applies to contracts within the scope of paragraphs 8 to ' of $S +7. 9his $ccounting Standard applies to recogni ed and unrecogni ed financial instruments. 5ecognised financial instruments include financial assets and financial liabilities that are within the scope of $S +7. =nrecogni ed financial instruments include some financial instruments that, although outside the scope of $S +7, are within the scope of this $ccounting Standard (such as some loan commitments). 9his $ccounting Standard applies to contracts to buy or sell a non&financial item that are within the scope of $S +7 9he Standard requires the entities to pro2ide disclosures in their financial statements that enable users to e2aluate, i. ii. the significance of financial instruments for the entitys financial position and performance/ and the nature and e*tent of risks arising from financial instruments to which the entity is e*posed during the period and at the reporting date, and how the entity manages those risks.

9he principles in this $ccounting Standard complement the principles for recognising, measuring and presenting financial assets and financial liabilities in $ccounting

Standard ($S) +7, .inancial %nstruments, 5ecognition and Eeasurement and $ccounting Standard ($S) +", .inancial %nstruments, Dresentation Disclosure $n entity should disclose information that enables users of its financial statements to e2aluate the nature and e*tent of risks arising from financial instruments to which the entity is e*posed at the reporting date. Qualitative disclosures .or each type of risk arising from financial instruments, an entity should disclose, a. the e*posures to risk and how they arise/ b. its ob1ecti2es, policies and processes for managing the risk and the methods used to measure the risk/ and c. any changes in (a) or (b) from the pre2ious period. Quantitative disclosures .or each type of risk arising from financial instruments, an entity should disclose, a. summary quantitati2e data about its e*posure to that risk at the reporting date. 9his disclosure should be based on the information pro2ided internally to key management personnel of the entity (as defined in $S "A 5elated Darty ?isclosures), for e*ample the entitys board of directors or chief e*ecuti2e officer. b. the disclosures required under as mentioned in subsequent clauses, to the e*tent not pro2ided in (a), unless the risk is not material c. )oncentrations of risk if not apparent from (a) and (b). %f the quantitati2e data disclosed as at the reporting date are unrepresentati2e of an entitys e*posure to risk during the period, an entity should pro2ide further information that is representati2e Credit risk $n entity should disclose by class of financial instrument, a. the amount that best represents its ma*imum e*posure to credit risk at the reporting date without taking account of any collateral held or other credit enhancements (eg netting agreements that do not qualify for offset in accordance with $S +")/ b. in respect of the amount disclosed in (a), a description of collateral held as security and other credit enhancement/ c. information about the credit quality of financial assets that are neither past due nor impaired/ and d. the carrying amount of financial assets that would otherwise be past due or impaired whose terms ha2e been renegotiated. $n entity should disclose by class of financial asset, a. an analysis of the age of financial assets that are past due as at the reporting date but not impaired/ b. an analysis of financial assets that are indi2idually determined to be impaired as at the reporting date, including the factors the entity considered in determining that they are impaired/ and

c. for the amounts disclosed in (a) and (b), a description of collateral held by the entity as security and other credit enhancements and, unless impracticable, an estimate of their fair 2alue. )ollateral and other credit enhancements obtained 3hen an entity obtains financial or non&financial assets during the period by taking possession of collateral it holds as security or calling on other credit enhancements (eg guarantees), and such assets meet the recognition criteria in other Standards, an entity should disclose, a. the nature and carrying amount of the assets obtained/ and b. when the assets are not readily con2ertible into cash, its policies for disposing of such assets or for using them in its operations. Li uidit! risk $n entity should disclose, a. a maturity analysis for financial liabilities that shows the remaining contractual maturities/ and b. a description of how it manages the liquidity risk inherent in (a). Market risk Sensiti2ity analysis =nless an entity complies with sensiti2ity analysis as mentioned in subsequent clause, it should disclose, a. a sensiti2ity analysis for each type of market risk to which the entity is e*posed at the reporting date, showing how profit or loss and equity would ha2e been affected by changes in the rele2ant risk 2ariable that were reasonably possible at that date/ b. the methods and assumptions used in preparing the sensiti2ity analysis/ and c. changes from the pre2ious period in the methods and assumptions used, and the reasons for such changes. %f an entity prepares a sensiti2ity analysis, such as 2alue&at&risk, that reflects interdependencies between risk 2ariables (eg interest rates and e*change rates) and uses it to manage financial risks, it may use that sensiti2ity analysis in place of the analysis specified abo2e. 9he entity should also disclose, a. an e*planation of the method used in preparing such a sensiti2ity analysis, and of the main parameters and assumptions underlying the data pro2ided/ and b. an e*planation of the ob1ecti2e of the method used and of limitations that may result in the information not fully reflecting the fair 2alue of the assets and liabilities in2ol2ed. "t#er market risk disclosures 3hen the sensiti2ity analyses is disclosed as abo2e are unrepresentati2e of a risk inherent in a financial instrument (for e*ample because the year&end e*posure does not reflect the e*posure during the year), the entity should disclose that fact and the reason it belie2es the sensiti2ity analyses are unrepresentati2e. Applica/ility o& Accounting Standards in respect o& period commencing on or a&ter 7t$ Decem/er !""6

%n e*ercise of the powers conferred by clause (a) of sub&section (") of section '8# of the )ompanies $ct, "I<' (" of "I<'), read with sub&section (+)) of Section #"" and sub&section (") of Section #"7$ of the said $ct, the )entral !o2ernment, in consultation with 4ational $d2isory )ommittee on $ccounting Standards has made )ompanies ($ccounting Standards) 5ules, #77'. $ccording to these rules e2ery company is required to comply with said rules in respect of accounting period commencing on or after ;th ?ecember #77'. 9hese rules di2ide the companies into two di2isions, a. Small and Eedium si e companies (SE)) and b. 4on Small and Eedium si e companies (4on SE)) Small and 3edium si6ed company means a company ". whose equity or debt securities are not listed or are not in the process of listing on any stock e*change, whether in %ndia or outside %ndia/ #. which is not a bank, financial institution or an insurance company/ +. whose turno2er (e*cluding other income) does not e*ceed rupees fifty crore in the immediately preceding accounting year/ 8. which does not ha2e borrowings (including public deposits) in e*cess of rupees ten crore at any time during the immediately preceding accounting year/ and <. which is not a holding or subsidiary company of a company which is not a small and medium&si ed company $ company shall qualify as a Small and Eedium Si ed )ompany, if the conditions mentioned therein are satisfied as at the end of the rele2ant accounting period. $n e*isting company, which was pre2iously not a Small and Eedium Si ed )ompany (SE)) and subsequently becomes an SE), shall not be qualified for e*emption or rela*ation in respect of $ccounting Standards a2ailable to an SE) until the company remains an SE) for two consecuti2e accounting periods. SE)s shall follow the following instructions while complying with $ccounting Standards under these rules,& the SE) which does not disclose certain information pursuant to the e*emptions or rela*ations gi2en to it shall disclose (by way of a note to its financial statements) the fact that it is an SE) and has complied with the $ccounting Standards insofar as they are applicable to an SE) on the following lines, L9he )ompany is a Small and Eedium Si ed )ompany (SE)) as defined in the !eneral %nstructions in respect of $ccounting Standards notified under the )ompanies $ct, "I<'. $ccordingly, the )ompany has complied with the $ccounting Standards as applicable to a Small and Eedium Si ed )ompany.M 3here a company, being a SE), has qualified for any e*emption or rela*ation pre2iously but no longer qualifies for the rele2ant e*emption or rela*ation in the current accounting period, the rele2ant standards or requirements become applicable from the current period and the figures for the corresponding period of the pre2ious accounting period need not be re2ised merely by reason of its ha2ing ceased to be an SE). 9he fact that the company was an SE) in the pre2ious period and it had a2ailed of the e*emptions or rela*ations a2ailable to SE)s shall be disclosed in the notes to the financial statements.

%f an SE) opts not to a2ail of the e*emptions or rela*ations a2ailable to an SE) in respect of any but not all of the $ccounting Standards, it shall disclose the standard(s) in respect of which it has a2ailed the e*emption or rela*ation. %f an SE) desires to disclose the information not required to be disclosed pursuant to the e*emptions or rela*ations a2ailable to the SE)s, it shall disclose that information in compliance with the rele2ant accounting standard. 9he SE) may opt for a2ailing certain e*emptions or rela*ations from compliance with the requirements prescribed in an $ccounting Standard Dro2ided that such a partial e*emption or rela*ation and disclosure shall not be permitted to mislead any person or public. 9he following are the ma1or differences between the 4otified $S under the )ompanies $ct, "I<' and the $S, as issued by the %)$%, 9he rele2ant $ccounting Standard %nterpretations issued by the %)$% ha2e been incorporated in the notified $S itself e*cept $S% "#, $S% %#+, $S% %#; and $S% %#I. 4otified $S had two le2els of classification of companies being a Small and Eedium )ompanies (SE)) and other than SE)s. 9he $S issued by the %)$% had three le2els being Ge2el ", Ge2el # and Ge2el + enterprises. $S "A is entirely applicable and mandatory to Ge2el " enterprise and not applicable to Ge2el # and Ge2el + enterprises. 9he some of the requirements contained in the Dreface to the $S issued by the %)$% ha2e been incorporated as !eneral %nstructions in the rules containing the 4otified $S. 9he %)$% from time to time issued notifications on amendments to the $S. Eost of the amendments made by the %)$% ha2e been incorporated as paragraph insertions / deletions in the 4otified $S itself.

%)$% has come up with an announcement on #Ith Banuary, #77A whereby it has been mentioned that the %nstitute intends to harmoni e the two sets of standards pre2ailing and is proposing to come up with the following amendments in the $S issued by the %)$%, %)$% is going to issue !uidance 4otes for $S%s/ i.e., $S% "#, $S% #+, $S% #;, $S% #I which are not incorporated in )ompanies ($ccounting Standard) 5ules. 9he )ouncil of %)$% decided to change the $ccounting Standards issued by the %)$% in order to harmoni e the language differences between the two sets of accounting standards.

9he amended $ccounting Standards are likely to be published in the )ompendium of $ccounting Standards #77A. .or non corporate entities, accounting standards as issued by the %nstitute of )hartered $ccountants of %ndia will continue to become applicable.