Marvel Vinyls Ltd. కంపెనీ అకౌంటింగ్ విధానాలు

A. Revenue recognition

Revenue from safe of goods is recognised when significant risks and rewards in respect of ownership of goods are transferred to customers and is treated inclusive of excise duty and net of sales returns and Sales tax/ value added tax wherever applicable.

Other revenues are recognised on accrual basis, except where there are uncertainties in determination / reafisation of income, the same is not accounted for. Export Incentives under Status Holder Incentive Scheme have been recorded on the basis of actual utilisation of Licenses.

b. Fixed Assets

Fixed Assets are stated at there original cost (net of cenvat availed) including taxes and other incidental expenses related to acquisition, installcion and borrowing cost on loan taken for scquistion of qualifying assets upto the date of commissioning of assets. Wherever assets are revalued, cost is adjusted by the amount added on revaluation based on Govt, approved valuers'' report and disclosed separately as required under the Companies Act.1956.

Capital work in progress represents expenditure incurred in respect of capital projects under developments and are earned at cost. Cost includes related acquisition expenses. development/ construction costs, borrowing costs and other direct expenditure.

c. Depreciation

i. Depreciation on fixed assets has been charged as per Straight Line Method at rates specified in Schedule XIV of the Companies Act. 1956.

i. Double shift depreciation has been provided on Plant & Machinery.

iii. Difference in depreciation on book value of fixed assets revalued and depreciation on actual cost thereof is debited to the Capital Reserve Account.

iv. Assets costing upto Rs.SDQO/- is fully depreciated in the year of acquisition.

d. Investments

Long terms investments are stated at cost. Any diminution in value of long term investments, other than temporary, is provided for in the books of accounts. Current investments are stated at lower of the cost or fair value.

e. Inventories

Inventories ere valued on the following bases :

Raw Material At cost or net realisable value whichever is lower.

Cost is ascertained on FIFO basis Work-in-Progress At lower of cost or net realisable value.

Finished goods At cost (inclusive of Excise Dirties] or market

price whichever is lower.

Misc. Scrap At net realisable value.

f. Employee benefits

Contribution towerds Provident Fund is paid as per statutory provisions / Companies scheme. These benefits are considered as defined contribution plan and contribution are charges to the statement of profit and loss of the year when it becomes due.

Provision for incremental liability of gratuity has been made as per provision of payment of Gratuity Act.1972. The Leave Encashment has been provided in the books of accounts on accrual basis on the basis of earn leave at the end of the financial year.

g. Contingent Liabilities and Provisions

The Company recognize a provision when there is a present obligation as a result of past events and it is probate that an outflow of resources would be required to settle the obligation and a reliable estimate can be made.

A disclosure for contingent liability is made when there ts a possible obligation or a present obligation but probably will not require and outflow of resources.

When there is a possible obligation or a present obligation in respect of which the ItkeSyhood on outflow of resources is remote no provision or disclosure is made.

h. Borrowing Cost

Borrowing costs chat are attributable to the acquisition or construction of qualifying assets are considered as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for the intended use. All other borrowing costs are charged to the statement of profit and loss as and when incurred.

i. Impairment of assets

The Company assesses at each balance sheet date whether there is any Indication that the asset may be impaired. If any such indication exists, the company estimates the recoverable amount of the asset. If such recoverable amount of the assets or the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The deduction is treated as impairment loss and is recognised in the statement of profit and loss. If at balance sheet date there is an indication that previously assesed impairment loss no longer extrs. the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of depreciated historical cost.

j. Cash Flow Statement

Cash Flows are made using the indirect method.whereby profits before tax is adjusted for the effects of transaction of a non cash nature and any deferrals or accruals of Past or future cash receipts or payments. The cash flow from operating activities, financing and investing activities of the Company are segregated.

k. Foreign Currency Transactions

Transactions tn Foreign currency ere recorded on initial recognition at the exchange rates prevailing on or closely approximating to the date of transaction.

Monetary items denominated in foreign currency and covered by forward exchange contracts are transalted at the rate ruling on the date of transaction as increased or decreased by the proportionate difference between the forward rate and exchange rate on the date of transaction, such difference is recognised in the statement of profit and loss over the life of the contract.

Other monetary items are translated at the year end and rates and exchange rates difference on such transaction is recognised in statement of profit end toss.

The Company uses foreign exchange forward contracts to hedge its exposure to movements in foreign exchange rates which are entered into on the basis of firm conrrnitments and highly probable forecast transactions. The premium or discount arising at the inception of such forward exchange contracts are amortised as expense or income over the life of the contract. Exchange differences on such contracts are recognized in the statement of profit and loss in the year in which the exchange rates change. Any profit or loss arising on cancellation or renewal of such a forward exchange contract is recognized as income or as expense in the period in which same is cancelled or rolled over.

1, Taxes on Income

Tax expense comprises current income tax and deferred incomB tax.

Current tax is determined as the amount of tax payable in respect Df taxable income for the year, in accordance with income tax act. 1961.

Deferred income tax reflects the impact of current year timing differences between taxable income and accounting income for the year and revarsal of timing differences of earlier years. Deferred tax is measured based on the tax rates and tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognised only to the extent that there is reasonable/ virtual certatntly. depending on the nature of the timing differences, that sufficient future taxable income wilt be available against which such deferred tax assets can be realised.

m. Miscellaneous Expenditure

Deferred Bevenue Expenditure, Preliminary Expenditure and Technical Know How fee is amortized over a period of 10 years.

a. Terms/ Rights attached to Shares

Equity Shares

The company has only one class of Equity Shares having 8 par value of Rs. 10 per Share. Each holder of equity is entitled to one voce per share.

Preference Shares

The company has only one class of 18% Cumulative Redeemable Preference Shares having a par value of Rs. 100/- per share The Preference shares are due for redemption on 01.04.201 B and 24.D3.2019.

Notes :

i Term LoBn availed from Union Bank of India are secured against existing and future current and fixed assets of the Company in ackStwn to personal guarantee of two directors

ii. Vehicle Loans (Finance Lease Obligations ] are secured against vehicles acquired by the Company.

iii. Term Loan from Banks having a total amount of Rs.603.D2 Lacs. Out of whtch Rs.311.00 Leca repayable in next year have been considered as Current Liabilty in Note No.19.

w. Vehicle Loans (Finance Leese Obligations] having a total amount of Rs8B.15 Lacs, Out of which Rs. 35.37 Lacs repayable in next year have been considered as Current Liability in Note No. 12.

Notes I

Working Capita! Loan availed from Unon Bank of India are secured against existing and future current and fixed assets of the Company in addition to persona) guarantee of two directors.

In Foretgn Cur^ny Loan includes a sum of Re.B36.0a Lacs as buyers credit disbursement agamat Bank Guarantees provided by Union Bank of India,

A. Revenue recognition

Revenue from sale of goods is recognised when significant risks and rewards in respect of ownership of goods are transferred to customers and is treated inclusive of excise duty and net of sales returns and Sales tax/ value added tax wherever applicable.

Other revenues are recognised on accrual basis, except where there are uncertainties in determination / realisation of income, the same is not accounted for.

b. Fixed Assets

Fixed Assets are stated at there original cost [net of cenvat availed] including taxes and other incidental expenses related to acquisition, installtion and borrowing cost on loan taken for acquistion of qualifying assets upto the date of commissioning of assets. Wherever assets are revalued, cost is adjusted by the amount added on revaluation based on Gove, approved valuers'' report and disclosed seperately as required under the Companies Act, 1956.

Capital work in progress represents expenditure incurred in respect of capital projects under developments and are carried at cost. Cost includes related acquisition expenses, development/ construction costs, borrowing costs and other direct expenditure.

c. Depreciation

i. Depreciation on fixed assets has been charged as per Straight Line Method at rates specified in Schedule XIV of the Companies Act,1956.

ii. Double shift depreciation has been provided on Plant & Machinery.

iii. Difference in depreciation on book value of fixed assets revalued and depreciation on actual cost thereof is debited to the Capital Reserve Account .

iv. Assets costing upto Rs.5000/- is fully depreciated in the year of acquisition.

d. Investments

Long terms investments are stated at cost. Any diminution in value of long term investments, other than temporary, is provided for in the books of accounts. Current investments are stated at lower of the cost or fair value.

e. Inventories

Inventories are valued on the following bases :

Raw Material At cost or net realisable value whichever is lower.

Cost is ascertained on FIFO basis

Work-in-Progress At lower of cost or net realisable value.

Finished goods At cost [inclusive of Excise Duties] or market price whichever is lower.

Misc. Scrap At net realisable value.

f. Employee benefits

Contribution towards Provident Fund is paid as per statutory provisions / Companies scheme. These benefits are considered as defined contribution plan and contribution are charges to the statement of profit and loss of the year when it becomes due.

Provision for incremental liability of gratuity has been made as per provision of payment of Gratuity Act, 1972. The Leave Encashment has been provided in the books of accounts on accrual basis on the basis of earn leave at the end of the financial year.

g. Contingent Liabilities and Provisions

The Company recognize a provision when there is a present obligation as a result of past events and it is probale that an outflow of resources would be required to settle the obligation and a reliable estimate can be made.

A disclosure for contingent liability is made when there is a possible obligation or a present obligation but probably will not require and outflow of resources.

When there is a possible obligation or a present obligation in respect of which the likelyhood on outflow of resources is remote no provision or disclosure is made.

h. Borrowing Cost

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are considered as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for the intended use. All other borrowing costs are charged to the statement of profit and loss as and when incurred.

i. Impairment of assets

The Company assesses at each balance sheet date whether there is any Indication that the asset may be impaired. If any such indication exists, the company estimates the recoverable amount of the asset. If such recoverable amount of the assets or the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The deduction is treated as impairment loss and is recognised in the statement of profit and loss. If at balance sheet date there is an indication that previously assesed impairment loss no longer extis, the recoverable amount is reassessed and the asset is reflacted at the recoverable amount subject to a maximum of depreciated historical cost.

j. Cash Flow Statement

Cash Flows are made using the indirect method,whereby profits before tax is adjusted for the effects of transaction of a non cash nature and any deferrals or accruals of Past or future cash receipts or payments. The cash flow from operating activities, financing and investing activities of the Company are segregated.

k. Foreign Currency Transactions

Transactions in Foreign currency are recorded on initial recognition at the exchange rates prevailing on or closely approximating to the date of transaction.

Monetary items denominated in foreign currency and covered by forward exchange contracts are transalted at the rate ruling on the date of transaction as increased or decreased by the proportionate difference between the forward rate and exchange rate on the date of transaction, such difference is recognised in the statement of profit and loss over the life of the contract.

Other monetary items are translated at the year end and rates and exchange rates difference on such transaction is recognised in statement of profit and loss.

The Company uses foreign exchange forward contracts to hedge its exposure to movements in foreign exchange rates which are entered into on the basis of firm commitments and highly probable forecast transactions. The premium or discount arising at the inception of such forward exchange contracts are amortised as expense or income over the life of the contract. Exchange differences on such contracts are recognized in the statement of profit and loss in the year in which the exchange rates change. Any profit or loss arising on cancellation or renewal of such a forward exchange contract is recognized as income or as expense in the period in which same is cancelled or rolled over.

I. Taxes on Income

Tax expense comprises current income tax and deferred income tax.

Current tax is determined as the amount of tax payable in respect of taxable income for the year, ir accordance with income tax act, 1961.

Deferred income tax reflacts the impact of current year timing differences between taxable income and accounting income for the year and revarsal of timing differences of earlier years. Deferred tax is measured based on the tax rates and tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognised only to the extent that there is reasonable/ virtual certaintly, depending on the nature of the timing differences, that sufficient future taxable income will be available against which such deferred tax assets can be realised.

m. Miscellaneous Expenditure

Deferred Revenue Expenditure, Preliminary Expenditure and Technical Know How fee is amortized over a period of 10 years.

A. Revenue recognition

Revenue from sale of goods is recognised when significant risks and rewards in respect of ownership of goods are transferred to customers and is treated inclusive of excise duty and net of sales returns and Sales tax/value added tax wherever applicable.

Other revenues are recognised on accrual basis, except where there are uncertainties in determination/realisation of income, the same is not accounted for.

b. Fixed Assets

Fixed Assets are stated at their original cost (net of cenvat availed) including taxes and other incidental expenses related to acquisition, installation and borrowing cost on loan taken for acquistion of qualifying assets upto the date of commissioning of assets. Wherever assets are revalued, cost is adjusted by the amount added on revaluation based on Govt. approved valuers' report and disclosed separately as required under the Companies Act, 1956.

Capital work in progress represents expenditure incurred in respect of capital projects under developments and are carried at cost. Cost includes related acquisition expenses, development/construction costs, borrowing costs and other direct expenditure.

c. Depreciation

i. Depreciation on fixed assets has been charged as per Straight Line Method at rates specified in Schedule XIV of the Companies Act, 1956.

ii. Double shift depreciation has been provided on Plant & Machinery.

iii. Difference in depreciation on book value of fixed assets revalued and depreciation on actual cost thereof is debited to the Capital Reserve Account.

iv. Assets costing upto Rs. 5000/- is fully depreciated in the year of acquisition.

d. Investments

Long terms investments are stated at cost. Any diminution in value of long term investments, other than temporary, is provided for in the books of accounts. Current investments are stated at lower of the cost or fair value.

e. Inventories

Inventories are valued on the following bases :

Raw Material At cost or net realisable value whichever is lower. Cost is ascertained on FIFO basis

Work-In-Progress At lower of cost or net realisable value.

Finished goods At cost (inclusive of Excise Duties) or market price whichever is lower.

Misc. Scrap At net realisable value.

f. Employee benefits

Contribution towards Provident Fund is paid as per statutory provisions/Companies scheme. These benefits are considered as defined contribution plan and contribution are charges to the statement of profit and loss of the year when it becomes due.

Provision for incremental liability of gratuity has been made as per provisions of Payment of Gratuity Act, 1972. The Leave Encashment has been provided in the books of accounts on accrual basis on the basis of earn leave at the end of the financial year.

g. Contingent Liabilities and Provisions

The Company recognize a provision when there is a present obligation as a result of past events and it is probale that an outflow of resources would be required to settle the obligation and a reliable estimate can be made.

A disclosure for contingent liability is made when there is a possible obligation or a present obligation but probably will not require and outflow of resources.

When there is a possible obligation or a present obligation in respect of which the likelihood on outflow of resources is remote no provision or disclosure is made.

h. Borrowing Cost

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are considered as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for the intended use. All other borrowing costs are charged to the statement of profit and loss as and when incurred.

i. Impairment of assets

The Company assesses at each balance sheet date whether there is any Indication that the asset may be impaired. If any such indication exists, the company estimates the recoverable amount of the asset. If such recoverable amount of the assets or the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The deduction is treated as impairment loss and is recognised in the statement of profit and loss. If at balance sheet date there is an indication that previously assessed impairment loss no longer exits, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of depreciated historical cost.

j. Cash Flow Statement

Cash Flows are made using the indirect method, whereby profits before tax is adjusted for the effects of transaction of a non cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flow from operating activities, financing and investing activities of the Company are segregated.

k. Foreign Currency Transactions

Transactions in Foreign currency are recorded on initial recognition at the exchange rates prevailing on or closely approximating to the date of transaction.

Monetary items denominated in foreign currency and covered by forward exchange contracts are translated at the rate ruling on the date of transaction as increased or decreased by the proportionate difference between the forward rate and exchange rate on the date of transaction, such difference is recognised in the statement of profit and loss over the life of the contract.

Other monetary items are translated at the year end and rates and exchange rates difference on such transaction is recognised in statement of profit and loss.

The Company uses foreign exchange forward contracts to hedge its exposure to movements in foreign exchange rates which are entered into on the basis of firm commitments and highly probable forecast transactions. The premium or discount arising at the inception of such forward exchange contracts are amortised as expense or income over the life of the contract. Exchange differences on such contracts are recognized in the statement of profit and loss in the year in which the exchange rates change. Any profit or loss arising on cancellation or renewal of such a forward exchange contract is recognized as income or as expense in the period in which same is cancelled or rolled over.

l. Taxes on Income

Tax expense comprises current income tax and deferred income tax.

Current tax is determined as the amount of tax payable in respect of taxable income for the year, in accordance with income tax act, 1961.

Deferred income tax reflects the impact of current year timing differences between taxable income and accounting income for the year and revarsal of timing differences of earlier years. Deferred tax is measured based on the tax rates and tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognised only to the extent that there is reasonable/virtual certainly, depending on the nature of the timing differences, that sufficient future taxable income will be available against which such deferred tax assets can be realised.

m. Miscellaneous Expenditure

Deferred Revenue Expenditure, Preliminary Expenditure and Technical Know How fee is amortized over a period of 10 years.

1. METHOD OF ACCOUNTING : Mercantile

2. FIXED ASSETS : a.Revalued fixed assets are disclosed at value assessed by registered valuer less depreciation thereon.

b.Other fixed assets are disclosed at actual cost less depreciation.

3. DEPRECIATION

a. Depreciation on fixed assets has been charged as per Straight Line Method at rates specified in Schedule XIV of the Companies Act,1956.

b. Double shift depreciation has been provided on Plant & Machinery.

c. Difference in depreciation on book value of fixed assets revalued and depreciation on actual cost thereof is debited to the Capital Reserve Account.

4. CAPITAL WORK-IN-PROGRESS : a. Valued at cost

5. INVENTORIES

Basis of Valuation

Raw Material : At cost or net realisable value whichever is lower. Cost is ascertained on FIFO Basis.

Work-In-Progress : At cost

Finished goods : At cost (inclusive of Excise Duties) or market price whichever is lower.

Misc. Scrap : At net realisable value.

6. RETIREMENT BENEFITS

Provision for incremental liability of gratuity has been made as per provision of payment of Gratuity Act,1972. The Leave Encashment has been provided in the books of accounts on accrual basis on the basis of earn leave at the end of the financial year.

7. CONTINGENT LIABILITIES

Contingent liabilities are generally not provided for in the accounts and are shown separately in Notes on accounts.

8. BORROWING COST

Borrowing costs,which are directly attributable to the acquisition/construction of fixed assets, till the time such assets are ready for intended use, are capitalized as per the cost of the assets. Other borrowings cost are recognized as an expense in the year in which they are incurred/ accrued.

9. IMPAIRMENT OF ASSETS

Fixed Assets are assessed annually on the balance sheet date having regard to the internal and external source of information so as to analyze whether any impairment of the assets has taken place.

If the recoverable amount,represented by the higher of Net Selling Price or the value in use, is less than the carrying amount of the cash-generating unit the difference is recognized as impairment loss and debited to P & L Account.

Suitable reversals are made in the books of Accounts as and when the impairment loss ceases to exist or shows a decrease.

10. CASH FLOW STATEMENT

Cash Flows are made using the indirect method,whereby profits before tax is adjusted for the effects of transaction of a non cash nature and any deferrals or accruals of Past or future cash receipts or payments. The cash flow from operating activities, financing and investing activities of the Company are segregated.

11. FOREIGN CURRENCY TRANSACTIONS

(i) Initial Recognition

Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.

(ii) Conversion

Foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction ; Transactions denominated in foreign currencies are recorded in the reporting currency at exchange rate prevailing at the date of transaction.

(iii) Exchange Differences

Exchange differences arising on the settlement of monetary items or on reporting monetary items of company at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognised as income or as expenses in the year in which they arise.

(iv) Forward Exchange Contracts not intended for trading or speculation purposes

The premium or discount arising at the inception of forward exchange contracts is amortised as expense or income over the life of the contract. Exchange differences on such contracts are recognized in the statement of profit and loss in the year in which the exchange rates change. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognized as income or as expense for the year.

12. MISCELLANEOUS EXPENDITURE

Deferred Revenue Expenditure, Preliminary Expenditure and Technical Know How fee is amortized over a period of 10 years.

1. METHOD OF ACCOUNTING - Mercantile

2. FIXED ASSETS : a. Revalued fixed assets are disclosed at

value assessed by registered valuer less depreciation thereon.

b.Other fixed assets are disclosed at actual cost less depreciation.

3. DEPRECIATION

a. Depreciation on fixed assets has been charged as per Straight Line Method at rates specified in Schedule XIV of the Companies Act,1956.

b. Double shift depreciation has been provided on Plant & Machinery.

c. Difference in depreciation on book value of fixed assets revalued and depreciation on actual cost thereof is debited to the Capital Reserve Account.

4. CAPITAL WORK-IN-PROGRESS : a. Valued at cost

5. INVENTORIES

Basis of Valuation

Raw Material : At cost or net realisable value whichever is

lower. Cost is ascertained on FIFO Basis.

Work-In-Progress : At cost

Finished goods : At cost (inclusive of Excise Duties) or market

price whichever is lower.

Misc. Scrap : At net realisable value.

6. RETIREMENT BENEFITS

Provision for incremental liability of gratuity has been made as per provision of payment of Gratuity Act,1972. The Leave Encashment has been provided in the books of accounts on accrual basis on the basis of earn leave at the end of the financial year.

7. CONTINGENT LIABILITIES

Contingent liabilities are generally not provided for in the accounts and are shown separately in Notes on accounts.

8. BORROWING COST

Borrowing costs,which are directly attributable to the acquisition/construction of fixed assets, till the time such assets are ready for intended use, are capitalized as per the cost of the assets. Other borrowings cost are recognized as an expense in the year in which they are incurred/ accrued.

9. IMPAIRMENT OF ASSETS

Fixed Assets are assessed annually on the balance sheet date having regard to the internal and external source of information so as to analyze whether any impairment of the assets has taken place.

If the recoverable amount,represented by the higher of Net Selling Price or the value in use, is less than the carrying amount of the cash-generating unit the difference is recognized as impairment loss and debited to P & L Account.

Suitable reversals are made in the books of Accounts as and when the impairment loss ceases to exist or shows a decrease.

10. CASH FLOW STATEMENT

Cash Flows are made using the indirect method,whereby profits before tax is adjusted for the effects of transaction of a non cash nature and any deferrals or accruals of Past or future cash receipts or payments. The cash flow from operating activities, financing and investing activities of the Company are segregated.

11. FOREIGN CURRENCY TRANSACTIONS (i) Initial Recognition

Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.

(ii) Conversion

Foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction ; Transactions denominated in foreign currencies are recorded in the reporting currency at exchange rate prevailing at the date of transaction.

(iii) Exchange Differences

Exchange differences arising on the settlement of monetary items or on reporting monetary items of company at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognised as income or as expenses in the year in which they arise.

(iv) Forward Exchange Contracts not intended for trading or speculation purposes

The premium or discount arising at the inception of forward exchange contracts is amortised as expense or income over the life of the contract. Exchange differences on such contracts are recognized in the statement of profit and loss in the year in which the exchange rates change. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognized as income or as expense for the year.

12. MISCELLANEOUS EXPENDITURE

Deferred Revenue Expenditure, Preliminary Expenditure and Technical Know How fee is amortized over a period of 10 years.