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Accounting Policies of Dharani Sugars & Chemicals Ltd. Company

Mar 31, 2015

A. Basis of Preparation

The financial statements of the Company have been prepared in accordance with the Indian Generally Accepted Accounting Principles (GAAP). The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under Section 133 of the Companies Act, 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014. The financial statements have been prepared on an accrual basis and under the historical cost convention.

Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard required a change in accounting policy hitherto in use.

b. Use of estimates

The preparation of financial statements in conformity with Indian GAAP requires management to make estimates and assumptions that affect the reported amount of assets, liabilities, revenues and expenses and disclosure of contingent liabilities on the date of financial statements. The recognition, measurement, classification or disclosures of an item or information in the financial statements are made relying on these estimates. Any revision to accounting estimates is recognized prospectively.

c. Revenue Recognition

i Revenue from domestic sales is recognized on accrual basis. Sales and Finished Goods are accounted inclusive of excise duty, cess but excluding sales tax and trade discounts. Revenue from export sales is recognized on the basis of the dates of shipping bill. .

ii Export incentives are accounted on accrual basis.

iii Power generation income is recognized based on electrical units generated and sold, net of wheeling and transmission loss, as applicable, as disclosed in the power generation reports issued by the concerned authorities.

iv Interests on deposits are accounted on time proportion basis taking into account the amount outstanding and the rates applicable.

v Dividend income is recognized only when a right to receive payment is established.

vi Claims are accounted for when there is a reasonable certainty with regard to their ultimate collection.

vii Other incomes are recognized on accrual basis.

d. Fixed Assets

i Fixed Assets are stated at cost inclusive of duties (net of CENVAT credit to the extent applicable), taxes, incidental expenses, erection/commissioning expenses and interest and all other costs allocated up to the date of commencement of commercial production.

ii Gains or losses arising from retirement or disposal of fixed assets are recognized in the Profit & Loss account.

e. Depreciation

Tangible:

Schedule XIV to the Companies Act, 1956 prescribed requirements concerning depreciation on fixed assets till the year ended March 31, 2014. From the current year, Schedule XIV has been replaced by Schedule II to the Companies Act, 2013.

Depreciation is provided on Fixed Assets as per the rates prescribed under Schedule XIV of the Act and the notification issued there under as per the straight line method till the year ended March 31, 2014. Schedule II to the Companies Act, 2013 prescribed depreciation rates as per the useful lives for fixed assets, which in many cases are different from depreciation rates as per the useful lives prescribed under the erstwhile Schedule XIV

Considering the applicability of Schedule II, the management had provided for depreciation on fixed assets as specified in Part C of Schedule II of the Companies Act, 2013 under the straight line method. Certain fixed assets required reassessment of their remaining useful lives from the previous estimate. Accordingly, necessary revision has been made with effect from the date of Schedule II becoming effective i.e April 1 2014. The carrying amount of assets as at April 1, 2014 has been depreciated over their remaining useful life of and charged to the statement of profit and loss.

Depreciation is charged on addition / deletion on pro-rata monthly basis including the month of addition/deletion.

Intangible:

Purchased software meant for in-house consumption is capitalized at the acquisition price.

Capital work -in- progress:

Capital work-in -progress is carried at cost, comprising direct cost, related incidental expenses and attributable interest. Preoperative expenditure is allocated to fixed assets at the time of completion of the project.

f. Impairment of Assets

In accordance with AS 28 on "Impairment of Assets", an asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the Profit and Loss Account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed, if there is a change in the estimate of recoverable amount. During the year the Company tested impairment of fixed assets as per the Accounting Standard 28 "Impairment of Assets" to identify impairment loss, if any. The realizable amount calculated as per net selling price for all the cash generating units was higher than the carrying values of such units. Accordingly, no impairment was required to be recognized during the year.

g. Investments

Long-term Investments are stated at acquisition cost individually, less provision for diminution. Provision for diminution in value is made to recognize a decline other than temporary in the value of the investments.

Gains or losses on disposal of investments are recognized in the Statement of Profit and Loss.

h. Inventories

The inventory has been valued as under:

i Raw materials, Stores and spares are valued at the lower of cost and net realizable value. Cost includes cost of raw materials, transportation charges, and Store/Warehouse charges. The cost is determined on weighted average basis and excludes claimable levies and taxes.

ii Work in progress is valued at the lower of cost and net realizable value proportionate to the stage of progress. The cost includes direct material, labour and appropriate portion of overheads.

iii Finished goods are valued at lower of cost and net realizable value. The cost includes direct material; appropriate portion of overheads and includes excise duty and cess.

iv By-products are valued at net realizable value.

i. Retirement benefits to employees

i Retirement benefit in the form of provident fund is charged to the Profit and Loss account on accrual basis.

ii Provision for Gratuity and Leave encashment is made on the basis of actuarial valuation at the end of the year in line with AS-15 (Revised). Gratuity and Leave encashment are unfunded liability.

iii Superannuation for the Executives is contributed by way of subscription to the fund with the LIC of India and the same is charged to profit and loss account on accrual basis.

j. Accounting for Grants

The Company has fulfilled the obligations under the terms of the USAID Grant. In line with the generally accepted accounting principles, a sum of Rs.11.25 Lakh is being apportioned out of the grant to the Profit and Loss Account.

k. Foreign Currency Transactions:

Exchange differences arising on reporting of foreign currency monetary items at rates different from those at which they are initially recorded during the period, or reported in previous financial statements, in so far as they relate to the acquisition of a depreciable capital asset, are added to or deducted from the cost of the asset and are depreciated over the balance life of the asset.

Exchange differences arising on the settlement of the monetary items not covered above, or on reporting such monetary items of company at rates different from those at which they are initially recorded during the year or reported in previous financial statements, are recognized as income or as expenses in the year in which they arise.

In relation to the forward contracts entered into to hedge the foreign currency risk of the underlying monetary assets / liabilities, the exchange difference is calculated as the difference between the foreign currency amount of the contract translated at the exchange rate at the reporting date, or the settlement date where the transaction is settled during the reporting period, and the corresponding foreign currency amount translated at the later of the date of inception of the forward exchange contract and the last reporting date. Such exchange differences are recognized in the profit and loss account in the reporting period in which the exchange rates change.

The premium or discount on all such contracts arising at the inception of each contract is amortized as income or expense over the life of the contract. Any profit or loss arising on the cancellation or renewal of forward contracts is recognized as income or as expense for the period.

Derivative contracts not covered under Accounting Standard 11 The Effects of Changes in Foreign Exchange Rates", entered for hedging foreign currency fluctuations and interest rate risk are marked to market at each reporting date. Loss, if any, on such valuation is recognized in the Statement of Profit & Loss in that period and gains, if any, are not recognized as per the principal of prudence enunciated in Accounting Standard 1, "Disclosure of Accounting Policies" notified under the Companies (Accounting Standard) Rules, 2006 "as amended".

l. Borrowing Costs

Borrowing costs that are attributable to the acquisition of or construction of qualifying assets are capitalized as part of the cost of such assets up to the date of capitalization. A qualifying asset is one that necessarily takes substantial time to get ready for its intended use. All other borrowing costs are expensed in the period they occur. Borrowing costs includes interest and ancillary costs incurred in connection with the arrangement of borrowings.

m. Provisions, Contingent Liabilities and Contingent Assets

A provision is recognized when there is a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made.

Provisions are not discounted to its present value and are determined based on Management estimate of amounts required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current Management estimates.

Contingent liabilities are not recognized in the financial statements. Contingent assets are neither recognized nor disclosed in the financial statements

n. Lease

Where the Company has substantially acquired all risks and rewards of ownership of the assets, leases are classified as financial lease. Such assets are capitalized at the inception of the lease, at the lower of fair value or present value of minimum lease payment and liability is created for an equivalent amount. Each lease rental paid is allocated between liability and interest cost so as to obtain constant periodic rate of interest on the outstanding liability for each year.

Where significant portion of risks and reward of ownership of assets acquired under lease are retained by lessor, leases are classified as Operating lease. Equalized lease rentals for such leases are charged to Profit & Loss account. Lease payments under operating leases are recognized as an expense on a straight line basis in the Statement of profit and loss over the lease term.

o. Taxation

Tax expense comprises current and deferred tax. Provision for current income tax is made on the assessable income at the tax rate applicable to the relevant assessment year. Deferred income taxes are recognized for the future tax consequences attributable to timing differences between the financial statement determination of income and their recognition for tax purposes.

The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the income statement using the tax rates and tax laws that have been enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. If the company has unabsorbed depreciation or carry forward tax losses, deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that such deferred tax assets can be realized against future taxable profits.

Minimum Alternative Tax ('MAT') credit is recognized, as an asset only when and to the extent there is convincing evidence that the company will pay normal income tax during the specified period. In the year in which the Minimum Alternative tax (MAT) credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in Guidance Note issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to the profit and loss account and shown as MAT Credit Entitlement.

p. Earnings per Share ("EPS")

The earnings considered in ascertaining the company's earnings per share comprise the net profit after tax. The number of shares used in computing basic earnings per share is the weighted average number of shares outstanding during the year. The number of shares used in computing diluted earnings per share comprises the weighted average number of shares considered for deriving basic earnings per share and also the weighted average number of shares, if any, which would have been issued on the conversion of all dilutive potential equity shares.


Mar 31, 2014

A. Basis of Preparation

The financial statements are prepared in accordance with Generally Accepted Accounting Principles in India ("Indian GAAP") under the historical cost convention on the accrual basis. GAAP comprises mandatory accounting standards issued by the Companies (Accounting Standards) Rules, 2006(as amended) and the provisions of the Companies Act, 1956. Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard required a change in accounting policy hitherto in use.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

b. Use of estimates

The preparation of financial statements in conformity with Indian GAAP requires management to make estimates and assumptions that affect the reported amount of assets, liabilities, revenues and expenses and disclosure of contingent liabilities on the date of financial statements. The recognition, measurement, classification or disclosures of an item or information in the financial statements are made relying on these estimates. Any revision to accounting estimates is recognized prospectively.

c. Revenue Recognition

i Revenue from domestic sales is recognized on accrual basis. Sales and Finished Goods are accounted inclusive of excise duty, cess but excluding sales tax and trade discounts. Revenue from export sales is recognized on the basis of the dates of shipping bill.

ii Export incentives are accounted on accrual basis.

iii Power generation income is recognized based on electrical units generated and sold, net of wheeling and transmission loss, as applicable, as disclosed in the power generation reports issued by the concerned authorities.

iv Interests on deposits are accounted on time proportion basis taking into account the amount outstanding and the rates applicable.

v Dividend income is recognized only when a right to receive payment is established.

vi Claims are accounted for when there is a reasonable certainty with regard to their ultimate collection.

vii Other incomes are recognized on accrual basis.

d. Fixed Assets

i Fixed Assets are stated at cost inclusive of duties (net of CENVAT credit to the extent applicable), taxes, incidental expenses, erection/commissioning expenses and interest and all other costs allocated up to the date of commencement of commercial production.

ii Gains or losses arising from retirement or disposal of fixed assets are recognized in the Profit & Loss account.

e. Depreciation Tangible

Depreciation is provided on Fixed Assets under the straight line method at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956 and the notification issued there under, except that depreciation has been provided at 100 % on assets costing individually Rs. 5,000/- or less irrespective of whether or not the aggregate cost of such assets constitutes more than 10 % of the total cost of the assets under the particular grouping. Depreciation is charged on addition / deletion on pro-rata monthly basis including the month of addition/deletion.

Intangible:

Purchased software meant for in-house consumption is capitalized at the acquisition price.

Capital work -in- progress:

Capital work-in -progress is carried at cost, comprising direct cost , related incidental expenses and attributable interest. Preoperative expenditure are allocated to fixed assets at the time of completion of the project.

f. Impairment of Assets

In accordance with AS 28 on "Impairment of Assets", an asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the Profit and Loss Account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed, if there is a change in the estimate of recoverable amount. During the year the Company tested impairment of fixed assets as per the Accounting Standard 28 "Impairment of Assets" to identify impairment loss, if any. The realizable amount calculated as per net selling price for all the cash generating units was higher than the carrying values of such units. Accordingly, no impairment was required to be recognized during the year.

g. Investments

Long-term Investments are stated at acquisition cost individually, less provision for diminution. Provision for diminution in value is made to recognize a decline other than temporary in the value of the investments.

Gains or losses on disposal of investments are recognized in the Statement of Profit and Loss.

h. Inventories

The inventory has been valued as under:

i Raw materials, Stores and spares are valued at the lower of cost and net realizable value. Cost includes cost of raw materials, transportation charges, and Store/Warehouse charges. The cost is determined on weighted average basis and excludes claimable levies and taxes.

ii Work in progress is valued at the lower of cost and net realizable value proportionate to the stage of progress. The cost includes direct material, labour and appropriate portion of overheads.

iii Finished goods are valued at lower of cost and net realizable value. The cost includes direct material; appropriate portion of overheads and includes excise duty and Cess.

iv By-products are valued at net realizable value.

i. Retirement benefits to employees

i Retirement benefit in the form of provident fund is charged to the Profit and Loss account on accrual basis.

ii Provision for Gratuity and Leave encashment is made on the basis of actuarial valuation at the end of the year in line with AS-15 (Revised). Gratuity and Leave encashment are unfunded liability.

iii Superannuation for the Executives is contributed by way of subscription to the fund with the LIC of India and the same is charged to profit and loss account on accrual basis.

j. Accounting for Grants

The Company has fulfilled the obligations under the terms of the USAID Grant. In line with the generally accepted accounting principles, a sum of Rs.11.25 Lakh is being apportioned out of the grant to the Profit and Loss Account.

k. Foreign Currency Transactions:

Exchange differences arising on reporting of foreign currency monetary items at rates different from those at which they are initially recorded during the period, or reported in previous financial statements, in so far as they relate to the acquisition of a depreciable capital asset, are added to or deducted from the cost of the asset and are depreciated over the balance life of the asset.

Exchange differences arising on the settlement of the monetary items not covered above, or on reporting such monetary items of company at rates different from those at which they are initially recorded during the year or reported in previous financial statements, are recognized as income or as expenses in the year in which they arise.

In relation to the forward contracts entered into to hedge the foreign currency risk of the underlying monetary assets / liabilities, the exchange difference is calculated as the difference between the foreign currency amount of the contract translated at the exchange rate at the reporting date, or the settlement date where the transaction is settled during the reporting period, and the corresponding foreign currency amount translated at the later of the date of inception of the forward exchange contract and the last reporting date. Such exchange differences are recognized in the profit and loss account in the reporting period in which the exchange rates change.

The premium or discount on all such contracts arising at the inception of each contract is amortized as income or expense over the life of the contract. Any profit or loss arising on the cancellation or renewal of forward contracts is recognized as income or as expense for the period.

Derivative contracts not covered under Accounting Standard 11 ''The Effects of Changes in Foreign Exchange Rates", entered for hedging foreign currency fluctuations and interest rate risk are marked to market at each reporting date. Loss, if any, on such valuation is recognized in the Statement of Profit & Loss in that period and gains, if any, are not recognized as per the principle of prudence enunciated in Accounting Standard 1, "Disclosure of Accounting Policies" notified under the Companies (Accounting Standard) Rules, 2006 "as amended".

l. Borrowing Costs

Borrowing costs that are attributable to the acquisition of or construction of qualifying assets are capitalized as part of the cost of such assets up to the date of capitalization. A qualifying asset is one that necessarily takes substantial time to get ready for its intended use. All other borrowing costs are expensed in the period they occur. Borrowing costs includes interest and ancillary costs incurred in connection with the arrangement of borrowings.

m. Provisions, Contingent Liabilities and Contingent Assets

A provision is recognized when there is a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on Management estimate of amounts required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current Management estimates.

Contingent liabilities are not recognized in the financial statements. Contingent assets are neither recognized nor disclosed in the financial statements.

n. Lease

Where the Company has substantially acquired all risks and rewards of ownership of the assets, leases are classified as financial lease. Such assets are capitalized at the inception of the lease, at the lower of fair value or present value of minimum lease payment and liability is created for an equivalent amount. Each lease rental paid is allocated between liability and interest cost so as to obtain constant periodic rate of interest on the outstanding liability for each year.

Where significant portion of risks and reward of ownership of assets acquired under lease are retained by lessor, leases are classified as Operating lease. Equalized lease rentals for such leases are charged to Profit & Loss account. Lease payments under operating leases are recognized as an expense on a straight line basis in the Statement of profit and loss over the lease term.

o. Taxation

Tax expense comprises current and deferred tax. Provision for current income tax is made on the assessable income at the tax rate applicable to the relevant assessment year. Deferred income taxes are recognized for the future tax consequences attributable to timing differences between the financial statement determination of income and their recognition for tax purposes.

The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the income statement using the tax rates and tax laws that have been enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. If the company has unabsorbed depreciation or carry forward tax losses, deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that such deferred tax assets can be realized against future taxable profits.

Minimum Alternative Tax (''MAT'') credit is recognized, as an asset only when and to the extent there is convincing evidence that the company will pay normal income tax during the specified period. In the year in which the Minimum Alternative tax (MAT) credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in guidance Note issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to the profit and loss account and shown as MAT Credit Entitlement.

p. Earnings per Share ("EPS")

The earnings considered in ascertaining the company''s earnings per share comprise the net profit after tax. The number of shares used in computing basic earnings per share is the weighted average number of shares outstanding during the year. The number of shares used in computing diluted earnings per share comprises the weighted average number of shares considered for deriving basic earnings per share and also the weighted average number of shares, if any, which would have been issued on the conversion of all dilutive potential equity shares.


Mar 31, 2013

A. Basis of Preparation

The financial statements have been prepared to comply in all material respects with the mandatory Accounting Standards issued by the Institute of Chartered Accountants of India and the relevant provisions of the Companies Act, 1956 (''the Act''). The financial statements have been prepared under the historical cost convention on an accrual basis. The Company follows the mercantile system of accounting and recognises income and expenditure on accrual basis.

b. Revenue Recognition

i Revenue from domestic sales is recognized on accrual basis. Sales and Finished Goods are accounted inclusive of excise duty, cess but excluding sales tax and trade discounts. Revenue from export sales is recognized on the basis of the shipping bills for exports.

ii Export incentives are accounted on accrual basis.

iii Interests on deposits are accounted on time proportion basis taking into account the amount outstanding and the rates applicable.

iv Dividend income is recognized only when a right to receive payment is established.

v Claims are accounted for when there is a reasonable certainty with regard to their ultimate collection.

vi Other incomes are recognized on accrual basis.

c. Fixed Assets

i Fixed Assets are stated at cost inclusive of duties (net of CENVAT credit to the extent applicable), taxes, incidental expenses, erection/commissioning expenses and interest and all other costs allocated up to the date of commencement of commercial production.

ii Gains or losses arising from retirement or disposal of fixed assets are recognized in the Profit & Loss account.

d. Depreciation

Depreciation is provided on Fixed Assets under the straight line method at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956 and the notification issued there under, except that depreciation has been provided at 100 % on assets costing individually Rs. 5,000/- or less irrespective of whether or not the aggregate cost of such assets constitutes more than 10 % of the total cost of the assets under the particular grouping. Depreciation on addition to fixed assets during the year is charged on pro rata basis with reference to the month of addition.

Furniture & fixtures include the cost of Rs.38.05 lakhs towards interior decoration and civil work for leased premises and depreciation rate adopted in respect of these assets are at the rate of 10% under straight line method.

e. Impairment of Assets

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the Profit and Loss Account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed, if there is a change in the estimate of recoverable amount. During the year the Company tested impairment of fixed assets as per the Accounting Standard 28 "Impairment of Assets" to identify impairment loss, if any. The realizable amount calculated as per net selling price for all the cash generating units was higher than the carrying values of such units. Accordingly, no impairment was required to be recognized during the year.

f. Investments

Long Term Investments are stated at cost of acquisition and income from investments not carrying fixed return is accounted at the time of receipt. Gains or losses on disposal of investments are recognized in the Profit & Loss Account. The decline in value of Long term investments other than temporary, wherever applicable, is given effect to as per Accounting Standard 13 (AS 13).

g. Inventories

The inventory has been valued as under:

i Raw materials, Stores and spares are valued at the lower of cost and net realizable value. Cost includes cost of raw materials, transportation charges, and Store/Warehouse charges. The cost is determined on weighted average basis and excludes claimable levies and taxes.

ii Work in progress is valued at the lower of cost and net realizable value proportionate to the stage of progress. The cost includes direct material, labour and appropriate portion of overheads.

iii Finished goods are valued at lower of cost and net realizable value. The cost includes direct material; appropriate portion of overheads and includes excise duty and Cess.

iv By-products are valued at net realizable value.

h. Retirement benefits to employees

i Retirement benefit in the form of provident fund is charged to the Profit and Loss account on accrual basis.

ii Provision for Gratuity and Leave encashment is made on the basis of actuarial valuation at the end of the year in line with AS-15 (Revised). Gratuity is an unfunded liability.

iii Superannuation for the Executives is contributed by way of subscription to the fund with the LIC of India and the same is charged to profit and loss account on accrual basis.

i. Accounting for Grants

The Company has fulfilled the obligations under the terms of the USAID Grant. In line with the generally accepted accounting principles, a sum of Rs.11.25 Lakhs is being apportioned out of the grant to the Profit and Loss Account.

j. Foreign Currency Transactions

Exchange differences arising on reporting of foreign currency monetary items at rates different from those at which they are initially recorded during the period, or reported in previous financial statements, in so far as they relate to the acquisition of a depreciable capital asset, are added to or deducted from the cost of the asset and are depreciated over the balance life of the asset.

Exchange differences arising on the settlement of the monetary items not covered above, or on reporting such monetary items of company at rates different from those at which they are initially recorded during the year or reported in previous financial statements, are recognized as income or as expenses in the year in which they arise.

In relation to the forward contracts entered into to hedge the foreign currency risk of the underlying monetary assets / liabilities, the exchange difference is calculated as the difference between the foreign currency amount of the contract translated at the exchange rate at the reporting date, or the settlement date where the transaction is settled during the reporting period, and the corresponding foreign currency amount translated at the latter of the date of inception of the forward exchange contract and the last reporting date. Such exchange differences are recognized in the profit and loss account in the reporting period in which the exchange rates change.

The premium or discount on all such contracts arising at the inception of each contract is amortized as income or expense over the life of the contract. Any profit or loss arising on the cancellation or renewal of forward contracts is recognized as income or as expense for the period.

k. Borrowing Costs

Borrowing costs that are attributable to the acquisition of or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial time to get ready for its intended use. All other borrowing costs are charged to revenue.

l. Provisions, Contingent Liabilities and Contingent Assets

A provision is recognized when there is a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made.

Provisions are not discounted to its present value and are determined based on Management estimate of amounts required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current Management estimates.

Contingent liabilities are not recognized in the financial statements. Contingent asset is neither recognized nor disclosed in the financial statements

m. Taxation

Tax expense comprises current and deferred tax. Provision for current income tax is made on the assessable income at the tax rate applicable to the relevant assessment year. Deferred income taxes are recognized for the future tax consequences attributable to timing differences between the financial statement determination of income and their recognition for tax purposes.

The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the income statement using the tax rates and tax laws that have been enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. If the company has unabsorbed depreciation or carry forward tax losses, deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that such deferred tax assets can be realized against future taxable profits.

Minimum Alternative Tax (''MAT'') credit is recognized, as an asset only when and to the extent there is convincing evidence that the company will pay normal income tax during the specified period. In the year in which the Minimum Alternative tax (MAT) credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in guidance Note issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to the profit and loss account and shown as MAT Credit Entitlement.

n. Earnings per Share ("EPS")

The earnings considered in ascertaining the company''s earnings per share comprise the net profit after tax. The number of shares used in computing basic earnings per share is the weighted average number of shares outstanding during the year. The number of shares used in computing diluted earnings per share comprises the weighted average number of shares considered for deriving basic earnings per share and also the weighted average number of shares, if any, which would have been issued on the conversion of all dilutive potential equity shares.


Mar 31, 2012

A. Basis of Preparation

The financial statements have been prepared to comply in all material respects with the mandatory Accounting Standards issued by the Institute of Chartered Accountants of India and the relevant provisions of the Companies Act, 1956 ('the Act'). The financial statements have been prepared under the historical cost convention on an accrual basis. The Company follows the mercantile system of accounting and recognises income and expenditure on accrual basis.

b. Revenue Recognition

i. Revenue from domestic sales is recognized on accrual basis. Sales and Finished Goods are accounted inclusive of excise duty, cess but excluding sales tax and trade discounts. Revenue from export sales is recognized on the basis of the shipping bills for exports.

ii. Export incentives are accounted on accrual basis.

iii. Interests on deposits are accounted on time proportion basis taking into account the amount outstanding and the rates applicable.

iv. Dividend income is recognized only when a right to receive payment is established.

v. Claims are accounted for when there is a reasonable certainty with regard to their ultimate collection.

vi. Other incomes are recognized on accrual basis.

c. Fixed Assets

i. Fixed Assets are stated at cost inclusive of duties (net of CENVAT credit to the extent applicable), taxes, incidental expenses, erection/commissioning expenses and interest and all other costs allocated up to the date of commencement of commercial production.

ii. Gains or losses arising from retirement or disposal of fixed assets are recognised in the Profit & Loss account.

d. Depreciation

Depreciation is provided on Fixed Assets under the straight line method at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956 and the notification issued there under, except that depreciation has been provided at 100 % on assets costing individually Rs. 5,000/- or less irrespective of whether or not the aggregate cost of such assets constitutes more than 10 % of the total cost of the assets under the particular grouping. Depreciation on addition to fixed assets during the year is charged on pro rata basis with reference to the month of addition.

Furniture & fixtures includes the cost of Rs.38.05 lakhs towards interior decoration and civil work for leased premises and depreciation rate adopted in respect of these assets are at the rate of 10% under straight line method.

e. Impairment of Assets

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the Profit and Loss Account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed, if there is a change in the estimate of recoverable amount. During the year the Company tested impairment of fixed assets as per the Accounting Standard 28 "Impairment of Assets" to identify impairment loss, if any. The realizable amount calculated as per net selling price for all the cash generating units was higher than the carrying values of such units. Accordingly, no impairment was required to be recognized during the year.

f. Investments

Long Term Investments are stated at cost of acquisition and income from investments not carrying fixed return is accounted at the time of receipt. Gains or losses on disposal of investments are recognized in the Profit & Loss Account. The decline in value of Long term investments other than temporary, wherever applicable, is given effect to as per Accounting Standard 13 (AS 13).

g. Inventories

The inventory has been valued as under:

i. Raw materials, Stores and spares are valued at the lower of cost and net realisable value. Cost includes cost of raw materials, transportation charges, and Store/Warehouse charges. The cost is determined on weighted average basis and excludes claimable levies and taxes.

ii. Work in progress is valued at the lower of cost and net realisable value proportionate to the stage of progress. The cost includes direct material, labour and appropriate portion of overheads.

iii. Finished goods are valued at lower of cost and net realisable value. The cost includes direct material; appropriate portion of overheads and includes excise duty and Cess.

iv. By-products are valued at net realizable value.

h. Retirement benefits to employees

i Retirement benefit in the form of provident fund is charged to the Profit and Loss account on accrual basis.

ii Provision for Gratuity and Leave encashment is made on the basis of actuarial valuation at the end of the year in line with AS-15 (Revised). Gratuity is an unfunded liability.

iii Superannuation for the Executives is contributed by way of subscription to the fund with the LIC of India and the same is charged to profit and loss account on accrual basis.

i. Accounting for Grants

The Company has fulfilled the obligations under the terms of the USAID Grant. In line with the generally accepted accounting principles, a sum of Rs.11.25 Lakhs is being apportioned out of the grant to the Profit and Loss Account.

j. Foreign Currency Transactions

Exchange differences arising on reporting of foreign currency monetary items at rates different from those at which they are initially recorded during the period, or reported in previous financial statements, in so far as they relate to the acquisition of a depreciable capital asset, are added to or deducted from the cost of the asset and are depreciated over the balance life of the asset.

Exchange differences arising on the settlement of the monetary items not covered above, or on reporting such monetary items of Company at rates different from those at which they are initially recorded during the year or reported in previous financial statements, are recognized as income or as expenses in the year in which they arise.

In relation to the forward contracts entered into to hedge the foreign currency risk of the underlying monetary assets / liabilities, the exchange difference is calculated as the difference between the foreign currency amount of the contract translated at the exchange rate at the reporting date, or the settlement date where the transaction is settled during the reporting period, and the corresponding foreign currency amount translated at the later of the date of inception of the forward exchange contract and the last reporting date. Such exchange differences are recognised in the profit and loss account in the reporting period in which the exchange rates change.

The premium or discount on all such contracts arising at the inception of each contract is amortised as income or expense over the life of the contract. Any profit or loss arising on the cancellation or renewal of forward contracts is recognized as income or as expense for the period.

k. Borrowing Costs

Borrowing costs that are attributable to the acquisition of or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial time to get ready for its intended use. All other borrowing costs are charged to revenue.

l. Provisions, Contingent Liabilities and Contingent Assets

A provision is recognized when there is a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made.

Provisions are not discounted to its present value and are determined based on Management estimate of amounts required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current Management estimates.

Contingent liabilities are not recognized in the financial statements. Contingent asset is neither recognized nor disclosed in the financial statements

m. Taxation

Tax expense comprises current and deferred tax. Provision for current income tax is made on the assessable income at the tax rate applicable to the relevant assessment year. Deferred income taxes are recognized for the future tax consequences attributable to timing differences between the financial statement determination of income and their recognition for tax purposes.

The effect of a change in tax rates on deferred tax assets and liabilities is recognised in the income statement using the tax rates and tax laws that have been enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. If the company has unabsorbed depreciation or carry forward tax losses, deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that such deferred tax assets can be realised against future taxable profits.

Minimum Alternative Tax ('MAT') credit is recognised, as an asset only when and to the extent there is convincing evidence that the company will pay normal income tax during the specified period. In the year in which the Minimum Alternative Tax (MAT) credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in guidance Note issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to the profit and loss account and shown as MAT Credit Entitlement.

n. Earnings per Share ("EPS")

The earnings considered in ascertaining the company's earnings per share comprise the net profit after tax. The number of shares used in computing basic earnings per share is the weighted average number of shares outstanding during the year. The number of shares used in computing diluted earnings per share comprises the weighted average number of shares considered for deriving basic earnings per share and also the weighted average number of shares, if any, which would have been issued on the conversion of all dilutive potential equity shares.


Mar 31, 2011

A. Basis of Preparation

The financial statements habe been prepared to company in all material respects with the mandatory Accounting Standards issued by the Institute of Chartered Accountants of India and the relevant provisions of the Companies Act, 1956 ('the Act'). The financial statements have been prepared under the historical cost convention on an accrual basis. The Company follows the mercantile system of accounting and recognises income and expenditure on accrual basis.

b. Revenue Recognition

i. Revenue from domestic sales is recognized on accrual basis. Sales and Finished Goods are accounted inclusive of excise duty, cess but excluding sales tax and trade discounts. Revenue from export sales is recognized on the basis of the shipping bills for exports.

ii. Export incentives are accounted on accrual basis.

iii. Interests on deposits are accounted on time proportion basis taking into account the amount outstanding and the rates applicable.

iv Dividend income is recognized only when a right to receive payment is established.

v Claims are accounted for when there is a reasonable certainty with regard to their ultimate collection.

vi. Other incomes are recognized on accrual basis.

c. Fixed Assets

i. Fixed Assets are stated at cost inclusive of duties (net of CENVAT credit to the extent applicable), taxes, incidental expenses, erection/ commissioning expenses and interest and all other costs allocated up to the due date commencement of commercial production.

ii. Gains or losses arising from retirement or disposal of fixed assets are recognised in the Profit & Loss

d. Depreciation

Depreciation is provided on Fixed Assets under the straight line method at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956 and the notification issued there under, except that depreciation has been provided at 100% on assets costing individually Rs. 5,000/- or less irrespective of whether or not the aggregate cost of such assets constitutes more than 10% of the total cost of the assets basis with reference to the month of addition.

Furniture & Fixtures includes the cost of Rs. 38.05 lakhs towards interior decoration and civil work for leased premises and depreciation rate adopted in respect of these assets are at the rate of 10% under straight line method.

e. Impairment of Assets

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the Profit and Loss Account in the year which an asset is identified as impaired. The impaired loss recognized in prior accounting period is reversed, if there is a change in the estimate of recoverable amount. During the year the Company testes impairment of fixed asstes as per the Accounting Standard 28 "Impairment of Assets" to identify impairment loss, if any. The realizable amount calculated as per net selling price for all the cash generating units was higher that the carrying values of such units. Accordingly, no impairment was required to be recognized during the year.

f. Investments Long Term Investments are stated at cost of acquisition and income from investments not carrying fixed return is accounted at the time of receipt. Gains or losses on disposal of investments are recognized in the Profit & Loss Account. The decline in value of Long term investments other than temporal wherever applicable, is given effect to as per Accounting Standard13(AS13).

g. Inventories

The inventory has been valued as under.

i) Raw materials, Stores and spares are valued at the lower of cost and net realisable value. Cost includes cost of raw materials, transportation charges, Store/Warehouse charges. The cost is determined on weighted average basis and excludes claimable levies and taxes.

ii) Work in progress is valued at the lower of cost and net realisable value proportionate to the stage of progress The cost includes direct material, labour and appropriate portion of overheads.

iii) Finished goods are valued at lower of cost and net realisable value. The cost includes direct material; appropriate portion of overheads and includes excise duty and Cess.

iv) By products are valued at net realizable value.

h. Retirement benefits to employees

i) Retirement benefit in the form of provident fund is charged to the Profit and Loss account on accrual basis.

ii) Provision for Gratuity and Leave encashment is made on the basis of actuarial valuation at the end of the year in line with AS-15 (Revised). Gratuity is an unfunded liability.

iii) Superannuation for the Executives is contributed by way of subscription to the fund with the LIC of India and the same is charged to profit and loss account on accrual basis.

i. Accounting for Grants

The Company has fulfilled the obligations under the terms of the USAID Grant. In line with the generally accepted accounting principles, a sum of Rs.11.25 Lakhs is being apportioned out of the grant to the Profit and Loss Account.

j. Foreign Currency Transactions

Exchange differences arising on reporting of foreign currency monetary items at rates different from those at which they are initially recorded during the period, or reported in previous financial statements, in so far as they relate to the acquisition of a depreciable capital asset, are added to or deducted from the cost of the asset and are depreciated over the balance life of the asset.

Exchange differences arising on the settlement of the monetary items not covered above, or on reporting such monetary items of company at rates different from those at which they are initially recorded during the year or reported in previous financial statements, are recognized as income or as expenses in the year in which they arise.

In relation to the forward contracts entered into to hedge the foreign currency risk of the underlying monetary assets / liabilities, the exchange difference is calculated as the difference between the foreign currency amount of the contract translated at the exchange rate at the reporting date, or the settlement date where the transaction is settled during the reporting period, and the corresponding foreign currency amount translated at the later of the date of inception of the forward exchange contract and the last reporting date. Such exchange differences are recognised in the profit and loss account in the reporting period in which the exchange rates change.

The premium or discount on all such contracts arising at the inception of each contract is amortised as income or expense over the life of the contract. Any profit or loss arising on the cancellation or renewal of forward contracts is recognized as income or as expenseforthe period.

k. Borrowing Costs

Borrowing costs that are attributable to the acquisition of or construction of qualifying assets are capitalized as part of the cost of such assets. Aqualifying asset is one that necessarily takes substantial time to get ready for its intended use. All other borrowing costs are charged to revenue.

I. Provisions, Contingent Liabilities and Contingent Assets

A provision is recognized when there is a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made.

Provisions are not discounted to its present value and are determined based on Management estimate of amounts required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current Management estimates.

Contingent liabilities are not recognized in the financial statements. Contingent asset is neither recognized nor disclosed in the financial statements

m. Taxation

Tax expense comprises current and deferred tax. Provision for current income tax is made on the assessable income at the tax rate applicable to the relevant assessment year. Deferred income taxes are recognized for the future tax consequences attributable to timing differences between the financial statement determination of income and their recognition for tax purposes.

The effect of a change in tax rates on deferred tax assets and liabilities is recognised in the income statement using the tax rates and tax laws that have been enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. If the company has unabsorbed depreciation or carry forward tax losses, deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that such deferred tax assets can be realised against future taxable profits.

Minimum Alternative Tax ('MAT') credit is recognised, as an asset only when and to the extent there is convincing evidence that the company will pay normal income tax during the specified period. In the year in which the Minimum Alternative tax (MAT) credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in guidance Note issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to the profit and loss account and shown as MAT Credit Entitlement.

n. Earnings per Share ("EPS")

The earnings considered in ascertaining the company's earnings per share comprise the net profit after tax. The number of shares used in computing basic earnings per share is the weighted average number of shares outstanding during the year. The number of shares used in computing diluted earnings per share comprises the weighted average number of shares considered for deriving basic earnings per share and also the weighted average number of shares, if any, which would have been issued on the conversion of all dilutive potential equity shares.


Mar 31, 2010

A. Basis of Preparation

The financial statements have been prepared to comply in all material respects with the mandatory Accounting Standards issued by the Instituteof Chartered Accountants of India and the relevant provisions of the Companies Act, 1956 (the Act). The financial statements have been prepared under the historical "cost convention on an accrual basis. The Company follows the mercantile system of accounting and recognises income and expenditure on accrual basis.

b. Revenue Recognition

i. Revenue from domestic sales is recognized on accrual basis. Sales and Finished Goods are accounted inclusive of excise duty, cess but excluding sales tax and trade discounts. Revenue from export sales is recognized on the basis of the shipping bills for exports.

ii. Export incentives are accounted on accrual basis.

in. Interests on deposits are accounted on time proportion basis taking into account the amount outstanding and the rates applicable.

iv. Dividend income is recognized only when a right to receive payment is established.

v Claims are accounted for when there is a reasonable certainty with regard to their ultimate collection.

vi. Other incomes are recognized on accrual basis.

c. Fixed Assets

i. Fixed Assets are stated at cost inclusive of duties (net of CENVAT credit to the extent applicable), taxes, incidental expenses, erection/commissioning expenses and interest and all other costs allocated up to the date commencement of commercial production.

ii. Gains or losses arising from retirement or disposal of fixed assets are recognised in the Profit & Loss account.

d. Depreciation

Depreciation is provided on Fixed Assets under the straight line method at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956 and the notification issued there under, except that depreciation has been provided at 100 % on assets costing individually Rs. 5,000/- or less irrespective of whether or not the aggregate cost of such assets constitutes more than 10 % of the total cost of the assets under the particular grouping. Depreciation on addition to fixed assets during the year is charged on pro rata basis with reference to the month of addition.

Furniture & fixtures includes the cost of Rs.38.05 lakhs towards interior decoration and civil work for leased premises and depreciation rate adopted in respect of these assets are at the rate of 10% under straight line method.

e. Impairment of Assets

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the Profit and Loss Account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed, if there is a change in the estimate of recoverable amount. During the year the Company tested impairment of fixed assets as per the Accounting Standard 28 "Impairment of Assets" to identify impairment loss, if any. The realizable amount calculated as per net selling price for all the cash generating units was higher that the carrying values of such units. Accordingly, no impairment was required to be recognized during the year.

f. Investments

Long Term Investments are stated at cost of acquisition and income from investments not carrying fixed return is accounted at the time of receipt. Gains or losses on disposal of investments are recognized in the Profit & Loss Account. The decline in value of Long term investments other than temporary, wherever applicable, is given effect to as per Accounting Standard 13(AS 13).

g. Inventories

The inventory has been valued as under.

i) Raw materials, Stores and spares are valued at the lower of cost and net realisable value. Cost includes cost of raw materials, transportation charges, Store/Warehouse charges. The cost is determined on weighted average basis and excludes claimable levies and taxes.

ii) Work in progress is valued at the lower of cost and net realisable value proportionate to the stage of progress. The cost includes direct material, labour and appropriate portion of overheads.

iii) Finished goods are valued at lower of cost and net realisable value. The cost includes direct material appropriate portion of overheads and includes excise duty and Cess.

iv) By products are valued at net realizable value.

h. Retirement benefits to employees

i) Retirement benefit in the form of provident fund is charged to the Profit and Loss account on accrual basis.

ii) Provision for Gratuity and Leave encashment is made on the basis of actuarial valuation at the end of the year in line with AS- 15 (Revised). Gratuity is an unfunded liability.

iii) Superannuation for the Executives is contributed by way of subscription to the fund with the LIC of India and the same is charged to profit and loss account on accrual basis.

i. Accounting for Grants

The Company has fulfilled the obligations under the terms of the USAID Grant. In line with the generally accepted accounting principles, a sum of Rs. 11.25 Lakhs is being apportioned out of the grant to the Profit and LossAccount.

j. Foreign Currency Transactions

Exchange differences arising on reporting of foreign currency monetary items at rates different from those at which they are initially recorded during the period, or reported in previous financial statements, in so far as they relate to the acquisition of a depreciable capital asset, are added to or deducted from the cost of the asset and are depreciated over the balance life of the asset.

Exchange differences arising on the settlement of the monetary items not covered above, or on reporting such monetary items of company at rates different from those at which they are initially recorded during the year or reported in previous financial statements, are recognized as income or as expenses in the year in which they arise.

In reiatipn to the forward contracts entered into to hedge the foreign currency risk of the underlying monetary assets / liabilities, the exchange difference is calculated as the difference between the foreign currency amount of the contract translated at the exchange rate at the reporting date, or the settlement date where the transaction is settled during the reporting period, and the corresponding foreign currency amount translated at the later of the date of inception of the forward exchange contract and the last reporting date. Such exchange differences are recognised in the profit and loss account in the reporting period in which the exchange rates change.

The premium or discount on all such contracts arising at the inception of each contract is amortised as income or expense over the life of the contract. Any profit or loss arising on the cancellation or renewal of forward contracts is recognized as income or as expense for the period.

k. Borrowing Costs

Borrowing costs that are attributable to the acquisition of or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial time to get ready for its intended use. All other borrowing costs are charged to revenue.

I. Provisions, Contingent Liabilities and Contingent Assets

A provision is recognized when there is a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made.

Provisions are not discounted to its present value and are determined based on Management estimate of amounts required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current Management estimates.

Contingent liabilities are not recognized in the financial statements. Contingent asset is neither recognized nor disclosed in the financial statements

m. Taxation

Tax expense comprises current and deferred tax. Provision for current income tax is made on the assessable income at the tax rate applicable to the relevant assessment year. Deferred income taxes are recognized for the future tax consequences attributable to timing differences between the financial statement determination of income and their recognition fortax purposes.

The effect of a change in tax rates on deferred tax assets and liabilities is recognised in the income statement using the tax rates and tax laws that have been enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. If the company has unabsorbed depreciation or carry forward tax losses, deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that such deferred tax assets can be realised against future taxable profits.

Minimum Alternative Tax (MAT) credit is recognised, as an asset only when and to the extent there is convincing evidence that the company will pay normal income tax during the specified period. In the year in which the Minimum Alternative tax (MAT) credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in guidance Note issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to the profit and loss account and shown as MAT Credit Entitlement.

n. Earnings per Share ("EPS")

Basic earnings per share are calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year.

 
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