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‘O’ Notes (Contd.)Schedulesforming part of the Accounts for the year ended 31st March, 2009(All Figures in Rs. ‘000)Central Government under the Employees’ Provident Funds and Miscellaneous Provisions Act,1952 and shortfall, if any, on accountof interest, is made good by the Company. ( Also refer note 19.2 below )Contributions under Employees’ Pension Scheme is made as per statutory requirements and charged as expenses for the year.The Company also contributes to the Central Government administered Employees’ State Insurance Scheme for its eligibleemployees, which is a defined contribution plan.Provisions for Gratuity and Superannuation for eligible employees are ( being defined benefit plans ) made on the basis of year-endactuarial valuation.Accrued liability towards Leave Encashment benefits, covering eligible employees, evaluated on the basis of year-end actuarialvaluation, is recognised as a charge.Actuarial gains / losses arising in Defined Benefit Plans are recognised immediately in the Profit and Loss Account as income orexpenses in the year in which they occur.2.8 Research and DevelopmentRevenue expenditure on research and development is charged in the year in which it is incurred.2.9 Foreign Currency TransactionsMonetary assets and liabilities related to foreign currency transactions remaining unsettled at the year end are translated at yearend rates or at contract rates, where covered by forward exchange contracts. The difference in transactions of monetary assetsand liabilities and realised gains and losses on foreign exchange transactions are recognised in the Profit and Loss Account. Inrespect of transactions covered by forward exchange contracts, the difference between the contract rate and the spot rate onthe date of transaction is charged to the Profit and Loss Account over the period of the contract. Profit/(Loss) on cancellation offorward contracts are recognised as income or as expenses for the year. Foreign currency non monetary items carried in terms ofhistorical cost are reported using the exchange rate at the date of transactions.2.10 Borrowing CostBorrowing Cost that are attributable to the acquisition, construction or production of qualifying assets are capitalised as part of costof such assets. A qualifying asset is an asset that necessarily requires a substantial period of time to get ready for its intended useor sale. All other borrowing costs are recognised as expenses in the period in which they are incurred.2.11 LeasesFor assets acquired under Operating Lease, rentals payable are charged to Profit and Loss Account. Assets acquired under FinanceLease are capitalised at lower of the Fair Value and Present Value of Minimum Lease Payments.Assets leased out under operating leases are capitalised. Rental income is recognised on accrual basis over the lease term.3. Based on the valuation report submitted by the valuers appointed for the purpose, certain items of the Company’s fixed assets (viz.Freehold and Leasehold Land, Freehold and Leasehold Buildings and Plant and Machinery) were revalued on 31st March,1993 afterconsidering the following factors :-• The then estimated current market value pertaining to Leasehold Land and Freehold Land and Buildings thereon.• Value of Plant and Machinery based on their the then current cost of replacement.• Adjustments for the then condition, the standard of maintenance, depreciation up to valuation date etc.The resultant revaluation surplus of 247,234 arising from the aforesaid revaluation were transferred to Revaluation Reserve as reflectedin the Company’s annual accounts for 1992-93.Depreciation on these revalued assets as calculated in the manner indicated in Note 2.3(b) above includes an additional charge of 1,545( Previous Year 1,545 )and an amount equivalent to the additional charge has been transferred to the Profit and Loss Account fromRevaluation Reserve; such transfer, according to an authoritative professional view being acceptable for the purpose of the Company’sannual accounts. In consequence, the effective depreciation rates (other than leasehold land) are as per Schedule XIV to the CompaniesAct, 1956.4. One ownership flat (cost 3,937) belonging to the Company in a Co-operative Housing Society is registered in the name of the ManagingDirector of erstwhile Spundish Engineering Ltd.