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Accounting Policies of India Glycols Ltd. Company

Mar 31, 2018

1.1. Significant Accounting Policies

(a) Basis of Measurement

The Financial statements have been prepared under historical cost convention on accrual basis, except for the items that have been measured at fair value as required by relevant Ind AS.

The standalone financial statements are presented in Indian Rupees (''), which is the Companyâs functional and presentation currency and all amounts are rounded to the nearest Lakhs (Rs.00,000) and two decimals thereof, except as stated otherwise.

(b) Basis of classification of Current and Non - Current

Assets and Liabilities in the balance sheet have been classified as either current or non-current.

An asset has been classified as current if (a) it is expected to be realized in, or is intended for sale or consumption in, the Companyâs normal operating cycle; or (b) it is held primarily for the purpose of being traded; or (c) it is expected to be realized within twelve months after the reporting date; or (d) it is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting date. All other assets have been classified as non-current.

A liability has been classified as current when (a) it is expected to be settled in the Companyâs normal operating cycle; or (b) it is held primarily for the purpose of being traded; or (c) it is due to be settled within twelve months after the reporting date; or (d) the Company does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting date. All other liabilities have been classified as noncurrent.

Deferred tax assets and liabilities are classified as non-current assets and non-current liabilities.

An operating cycle is the time between the acquisition of assets for processing and their realization in cash or cash equivalents. The Company has identified twelve months as its operating cycle for the purpose of current /non-current assets and liabilities.

(c) Property, Plant and Equipment (PPE)

Property, Plant and Equipment are carried at deemed cost (fair value model) less accumulated depreciation and accumulated impairment losses, if any. Cost includes expenditure that is directly attributable to the acquisition of the items.

The Assetsâ residual values, useful lives and method of depreciation are reviewed at each financial year end and adjusted prospectively, if appropriate. Depreciation on Plant, Property and equipment has been provided using straight line method over the useful life of assets as specified in Schedule II of the Companies Act, 2013. However, in case of certain Plant & Machinery depreciation have been provided based on technical evaluation of the useful life by technical valuer ranging from 40-48 years.

Depreciation on additions/ disposals is provided with reference to the month of addition/ disposal. Certain plant and machinery have been considered as continuous process plant as provided in schedule II of the Companies Act, 2013 on technical evaluation.

Freehold land is not depreciated. Leasehold land is amortised over the period of lease.

Property, plant and equipment are eliminated from financial statement, either on disposal or when retired from active use. Losses arising in the case of retirement of property, plant and equipment and gains or losses arising from disposal of property, plant and equipment are recognized in the statement of profit and loss in the year of occurrence.

Expenditure during construction

Expenditure including qualifying interest during construction period is being included under capital work-in progress and the same is allocated to Property, Plant & Equipment on completion of installation/construction.

(d) Investment Properties

Investment properties are measured at cost less accumulated depreciation and impairment losses, if any.

Depreciation on such properties is provided over the estimated useful lives as specified in Schedule II to the Companies Act, 2013. The residual values, useful lives and depreciation method of investment properties are reviewed, and adjusted on prospective basis as appropriate, at each financial year end. The effects of any revision are included in the statement of profit and loss when the changes arise.

Though the Company measures investment property using cost based measurement, the fair value of investment property is disclosed in the notes. Fair values are determined based on annual evaluation performed by an external independent valuer/internal assessment.

(e) Intangible Assets

Identifiable intangible assets are recognised a) when the Company controls the asset, b) it is probable that future economic benefits attributed to the asset will flow to the Company and c) the cost of the asset can be reliably measured.

Computer softwareâs are capitalised at the amounts paid to acquire the respective license for use and are amortised over the period of license, generally not exceeding six years on straight line basis. The assetsâ useful lives are reviewed at each financial year end.

(f) Leases

A lease is classified at the inception date as a finance lease or an operating lease.

Leases, where the lessor effectively retains substantially all the risks and rewards of ownership of the leased item, are classified as operating leases. Operating lease payments are recognized as an expense in the statement of profit and loss which is measured at fair value.

(g) Inventories

I nventories are valued âat lower of cost or net realizable valueâ except stock of residual products and scrap which are valued at net realizable value. The cost is computed on the weighted average basis. In case of finished goods and stock in process, cost is determined by considering material, labour, related overheads and duties thereon.

(h) Employee benefits

I. Short-term employee benefits:

All employee benefits falling due within twelve months of the end of the period in which the employees render the related services are classified as short term employee benefits, which include benefits like salaries, wages, short term compensated absences, performance incentives, etc. and are recognised as expenses in the period in which the employee renders the related service and measured accordingly

II. Post-employment benefits

(i) Defined Contribution Plan

Employee benefits in the form of Provident Fund (with Government Authorities) are considered as defined contribution plan and the contributions are charged to the statement of Profit & Loss of the year when the contributions to the respective funds are due.

Actuarial Valuation

(ii) Defined Benefit Plan

Retirement benefits in the form of Gratuity and Long term compensated leaves are considered as defined benefit obligations and are provided for on the basis of an actuarial valuation, using the projected unit credit method, as at the date of the Balance Sheet.

The liability in respect of all defined benefit plans is accrued in the books of account on the basis of actuarial valuation carried out by an independent actuary using the Projected Unit Credit Method, which recognizes each year of service as giving rise to additional unit of employee benefit entitlement and measure each unit separately to build up the final obligation. The obligation is measured at the present value of estimated future cash flows. The discount rates used for determining the present value of obligation under defined benefit plans, is based on the market yields on Government securities as at the Balance Sheet date, having maturity periods approximating to the terms of related obligations.

Other short term absences are provided based on past experience of leave availed.

Actuarial Gains and losses arising from experience adjustments and changes in actuarial assumptions are recognized immediately in the balance sheet with a corresponding debit or credit to retained earnings through other comprehensive income (OCI) in the period in which they occur. Remeasurements are not reclassified to profit or loss in subsequent periods.

All other expenses related to defined benefit plans are recognized in Statement of Profit and Loss as employee benefit expenses.

(i) Foreign currency transactions and translation

Standalone financial statements have been presented in Indian Rupees (''), which is the Companyâs functional and presentation currency.

Transactions in foreign currencies are initially recorded by the Company at rates prevailing at the date of the transaction. Subsequently monetary items are translated at closing exchange rates of balance sheet date and the resulting exchange difference recognised in the statement of profit or loss. Differences arising on settlement of monetary items are also recognised in the statement of profit or loss.

(j) Grants

Grants and subsidies from the government are recognised at their fair value where there is a reasonable assurance that the grant/subsidies will be received and the Company will comply with all attached conditions. Revenue Grants are recognised in the statement of Profit & Loss. Government grants relating to the specific Property, Plant & Equipment is disclosed in the balance sheet as deferred income and are credited to profit or loss on a straight-line basis over the expected lives of the related assets and presented within other income to match them with the cost that they are intended to compensate. Changes in estimates are recognised prospectively over the remaining life of the assets.

(k) Taxation

Income tax expense represents the sum of current, MAT and deferred tax. Tax is recognised in the Statement of Profit and Loss, except to the extent that it relates to items recognised directly in equity or other comprehensive income.

Current tax provision is computed for Income calculated after considering allowances and exemptions under the provisions of the applicable Income Tax Laws. Current tax assets and current tax liabilities are off set, and presented as net.

Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the Balance sheet and the corresponding tax bases used in the computation of taxable profit and are accounted for using the liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences, and deferred tax assets are generally recognised for all deductible temporary differences, carry forward tax losses and allowances to the extent that it is probable that in future taxable profits will be available to set off such deductible temporary differences. Deferred tax assets and liabilities are measured at the applicable tax rates. Deferred tax assets and deferred tax liabilities are off- set, and presented as net.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available against which the temporary differences can be utilised.

Deferred Tax includes MAT paid in accordance with Law of India which is recognised as MAT credit entitlement.

Minimum Alternative Tax (MAT) as applicable to the Company is charged to the statement of Profit and loss. Credit of MAT 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, i.e., the period for which MAT credit is allowed to be carried forward. In the year in which the MAT credit becomes eligible to be recognised as an asset, the said asset is created by way of a credit to the profit and loss account and shown as MAT credit entitlement.

(l) Provisions and Contingencies

(i) Provisions

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are reviewed at each reporting period and are adjusted to reflect the current best estimate.

(ii) Contingencies

Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made. Information on contingent liability is disclosed in the Notes to the Financial Statements. Contingent assets are not recognized in financial statements but are disclosed, if any.

(m) Impairment of non-current assets

An asset is considered as impaired when at the date of Balance Sheet there are indications of impairment and the carrying amount of the asset, or where applicable the cash generating unit to which the asset belongs exceeds its recoverable amount (i.e. the higher of the net asset selling price and value in use).The carrying amount is reduced to the recoverable amount and the reduction is recognized as an impairment loss in the Statement of Profit and Loss. The impairment loss recognized in the prior accounting period is reversed if there has been a change in the estimate of recoverable amount. Post impairment, depreciation is provided on the revised carrying value of the impaired asset over its remaining useful life.

(n) Borrowing Cost / Finance Cost :

Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying assets treated as of the cost of that asset and other borrowing cost are recognised as expenses in the period in which it incurs them. Ancillary cost incurred in connection with the arranging the borrowings is amortized over the terms of the loan.

(o) Financial instruments - initial recognition, subsequent measurement and impairment

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. A financial assets or a liability is recognised when the Company becomes a Party to the contractual provision of the instrument.

a) Financial Assets

Financial assets include cash and cash equivalent, trade and other receivables, investments in securities and other eligible current and noncurrent assets.

Financial Assets are measured at amortised cost or fair value through Other Comprehensive Income or fair value through Profit or Loss, depending on its business model for managing those financial assets and the assets contractual cash flow characteristics.

Subsequent measurements of financial assets are dependent on initial categorisation. For impairment purposes significant financial assets are tested on an individual basis, other financial assets are assessed collectively in groups that share similar credit risk characteristics.

The company derecognizes a financial assets when the contractual rights to the cash flows from the financial assets expire or it transfers the financial assets and the transfer qualifies for the derecognisition under Ind-AS 109.

Investment in Equity shares''

I nvestments in equity securities (Other Than Investment in Subsidiaries & Joint Venture) are initially measured at fair value. Any subsequent fair value gain or loss is recognized through Profit or Loss.

Investment in Subsidiaries & Joint Venture

Investments in subsidiaries and Joint Venture are carried at cost. The cost comprises price paid to acquire investment and directly attributable cost.

The company assesses impairment based on expected credit loss (ECL) model to all its financial assets measured at amortised cost.

b) Financial liabilities

Financial liabilities include long term and short term loan and borrowings, trade and other payables and other eligible current and non-current liabilities.

All financial liabilities recognized initially at fair value and, in the case of loans and borrowing and other payable, net of directly attributable transaction costs. After initial recognition, financial liabilities are classified under one of the following two categories

i) Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading. The Company has not designated any financial liabilities upon initial measurement recognition at fair value through profit or loss. Financial liabilities at fair value through profit or loss are at each reporting date at fair value with all the changes recognized in the Statement of Profit and Loss.

ii) Financial liabilities measured at amortised cost

After initial recognition, such financial liabilities are subsequently measured at amortized cost by applying the Effective Interest Rate (EIR) method to the gross carrying amount of financial liability. The EIR amortization is included in finance expense in the profit and loss.

De-recognition of financial liability

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.

(p) Derivative financial instruments

The Company uses derivative financial instruments, such as forward & Options currency contracts to hedge its foreign currency risks. Derivative financial instruments are measured at their fair value at the end of each reporting period.

(q) Cash and Cash equivalents

Cash and cash equivalents in the balance sheet comprise cash at banks and on hand and short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.

(r) Earnings per share

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

For the purpose of calculating diluted earnings per share, net profit or loss for the year attributable to equity shareholders of the Company and the weighted average number of shares outstanding during the year is adjusted for the effect of all dilutive potential equity shares.

(s) Segment Reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. Management of the Company is responsible for allocating resources and assessing the performance of the operating segment. Revenue, expenses assets and liabilities which are common to the company are shown as results, assets and liabilities as unallocable.

(t) Revenue recognition and other income

a) Sale of goods

Revenue is recognized either on delivery or on transfer of significant risk and rewards of ownership of the goods. Revenue from the sale of goods is measured at fair value of consideration received or receivable, inclusive of excise duty as applicable but after deducting discounts, rebates and sales tax/VAT and Goods & Service Tax.

b) Sale of services-job work

Revenue from job work charges are recognised on when performance obligation is met.

c) Export Incentives

Revenue in respect of Export benefit are recognised on post export basis at the rate at which the entitlement accrues in terms of import export policy and is included in the turnover.

Mar 31, 2017

1.1. Company Overview

India Glycols Limited (âIGLâ or âthe companyâ) is a public company domiciled in India and is incorporated under the provisions of the Companies Act applicable in India. Its shares are publicly traded on the National Stock Exchange (âNSEâ) and the Bombay Stock Exchange (âBSEâ) in India. The registered office of IGL is situated at A-1, Industrial Area, Bazpur Road, Kashipur - 244713, Distt. Udham Singh Nagar, Uttarakhand, India.

The Company manufactures green technology based bulk, specialty and performance chemicals and natural gums, spirits, industrial gases and nutraceuticals etc.

These financial statements were authorized for issue in accordance with a resolution of the directors on dated 16^th May, 2017.

1.2. Basis of Preparation of financial statements

These are the companyâs first financial statements for the year ended 31 March 2017 that has prepared in accordance with Ind AS notified under the Companies (Indian Accounting Standards) Rules, 2015 as amended by the Companies (Indian Accounting Standards) (Amendment) Rules, 2016, read with Ind AS based Schedule III, under the Companies Act, 2013.

For all periods up to and including for the year ended 31 March 2017, the companyâs financial statements prepared complying 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) Rule, 2014.

The Company has consistently applied the accounting policies used in the preparation of its opening IND AS Balance Sheet at April 1, 2015 throughout all periods presented, as if these policies had always been in effect and are covered by IND AS 101 ââFirst-time adoption of Indian Accounting Standardsââ. The transition was carried out from accounting principles generally accepted in India (ââIndian GAAPââ) which is considered as the previous GAAP, as defined in IND AS 101. The reconciliation of effects of the transition from Indian GAAP to IND AS is disclosed in Note no. 64 to these financial statements.

The Companyâs financial statements provide comparative information in respect to the previous year. In addition, the company presents Balance Sheet as at the beginning of the previous year, which is the transition date to IND AS.

The significant accounting policies used in preparing the financial statements are set out in Note no. 1.3 of the Notes to the Standalone Financial Statements.

The preparation of the financial statements requires management to make Judgments, estimates and assumptions. Actual results could vary from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision effects only that period or in the period of the revision and future periods if the revision affects both current and future years (refer Note no. 1.4 on significant accounting estimates, assumptions and judgments.)

IND AS 101 First-time adoption of Indian Accounting Standards allows first time adopters certain exemptions and exceptions from the retrospective application of certain requirements under IND AS, effective for April 1, 2015 opening balance sheet, as explained below :

Following exceptions to the retrospective application of other IND AS as per Appendix B of IND AS 101.

Government Loan: The Company shall use its previous GAAP carrying amount of DBT Loan at the date of transition to Ind AS as the carrying amount of the loan in the Opening Ind AS Balance sheet and shall apply Ind AS 109 (Financial Instruments) and Ind AS 20 (Accounting for Government Grants and disclosure of Government Assistance) prospectively.

Following exemptions availed from other IND AS as per Appendix D of IND AS 101.

Deemed cost for Property, Plant and Equipment (PPE) - The Company has elected to measure items of PPE at the date of transition to IND AS at their fair value. Company has used the fair value of assets, which is considered as deemed cost on transition. The impact on fair valuation of Property, Plant and Equipment on transition from previous GAAP is '' 87,089.87 lacs and accordingly impact(net of deferred tax) been given in other equity.

Life of assets has been revisited on transition date and revised estimated life on date of transition has been considered as revised life for all assets.

Deemed cost of Investment Properties: The Company has elected to continue with the carrying value for all of its Investment Properties as recognized in the previous GAAP financial statements as their deemed cost at the transition date to Ind AS (i.e. April 1, 2015).

Long Term Foreign Currency Monetary Items :

The Company has opted not to continue the policy adopted for accounting for exchange differences arising from translation of long term foreign currency monetary liabilities recognized in the financial statements for the period ending immediately before the beginning of the first IND AS financial reporting period as per the previous GAAP, accordingly the Company has transferred in the opening retained earnings the capitalization of foreign currency fluctuation on long term foreign currency monetary liabilities and other long term monetary items adjusted in the Foreign currency monetary translation difference outstanding on transition date i.e April 1, 2015. The impact of such measurement is provided in summary of effect of transition.

Investments in subsidiaries and joint ventures :

The Company has elected to adopt the fair valued deemed cost of investment in certain investment in Subsidiaries and recognition of balance investments in subsidiaries at previous GAAP carrying values on the date of transition. The impact of such measurement is provided in summary of effect of transition.

Estimates:

The estimate at 1^st April 2015 and ended 31^st March 2016 are consistent with those made for the same dates in accordance with Indian GAAP (after adjustment to reflect any differences if any, in accounting policies) apart from the following items where application of Indian GAAP did not require estimation:

- Impairment of financial assets based on expected credit loss model

The estimates used by the company to present these amounts in accordance with Ind AS reflect conditions as at the transition date and as of 31^st March 2016.

1.3. Significant Accounting Policies

(a) Basis of Measurement

The Financial statements have been prepared under historical cost convention on accrual basis, except for the items that have been measured at fair value as required by relevant Ind AS.

The standalone financial statements are presented in Indian Rupees (''), which is the Companyâs functional and presentation currency and all amounts are rounded to the nearest lacs ('' 00,000) and two decimals thereof, except as stated otherwise.

(b) Property, Plant and Equipment

On transition to IND AS, the Company has adopted optional exception under IND AS 101 to measure Property, Plant and Equipment at fair value (refer Note no 64). Consequently the fair value has been assumed to be deemed cost of Property, Plant and Equipment on the date of transition. Subsequently Property, Plant and Equipment are carried at cost less accumulated depreciation and accumulated impairment losses, if any. Cost includes expenditure that is directly attributable to the acquisition of the items.

The Assetsâ residual values, useful lives and method of depreciation are reviewed at each financial year end and adjusted prospectively, if appropriate. Depreciation on Plant, Property and equipment has been provided using straight line method over the useful life of assets as specified in Schedule II of the Companies Act,2013. However, in case of certain Plant & Machinery the depreciation have been provided based on technical evaluation of the useful life by technical valuer ranging from 40-48 years.

Freehold land is not depreciated. Leasehold land is amortized over the period of lease.

Expenditure during construction

Expenditure during construction period is being included under capital work-in progress and the same is allocated to Property, Plant & Equipment on completion of installation/construction.

Investment properties are measured at cost less accumulated depreciation and impairment losses, if any. Depreciation on building is provided over the estimated useful lives as specified in Schedule II to the Companies

Act, 2013. The residual values, useful lives and depreciation method of investment properties are reviewed, and adjusted on prospective basis as appropriate, at each financial year end. The effects of any revision are included in the statement of profit and loss when the changes arise.

(d) Intangible Assets

Identifiable intangible assets are recognized a) when the Company controls the asset, b) it is probable that future economic benefits attributed to the asset will flow to the Company and c) the cost of the asset can be reliably measured.

Computer softwareâs are capitalized at the amounts paid to acquire the respective license for use and are amortized over the period of license, generally not exceeding six years on straight line basis. The assetsâ useful lives are reviewed at each financial year end.

(e) Inventories

Inventories are valued âat lower of cost or net realizable valueâ except stock of residual products and scrap which are valued at net realizable value. The cost is computed on the weighted average basis. In case of finished goods and stock in process, cost is determined by considering material, labour, related overheads and duties thereon.

(f) Employee benefits

(i) Defined Contribution Plan

(ii) Defined Benefit Plan

Actuarial Gains and losses arising from experience adjustments and changes in actuarial assumptions are recognized immediately in the balance sheet with a corresponding debit or credit to retained earnings through other comprehensive income (OCI) in the period in which they occur. Re-measurements are not reclassified to profit or loss in subsequent periods.

All other expenses related to defined benefit plans are recognized in Statement of Profit and Loss as employee benefit expenses.

(g) Foreign currency transactions and translation

Standalone financial statements have been presented in Indian Rupees(''),which is the Companyâs functional and presentation currency.

Transactions in foreign currencies are initially recorded by the Company at rates prevailing at the date of the transaction. Subsequently monetary items are translated at closing exchange rates of balance sheet date and the resulting exchange difference recognized in profit or loss. Differences arising on settlement of monetary items are also recognized in profit or loss.

(h) Grants

Grants and subsidies from the government are recognized at their fair value where there is a reasonable assurance that the grant/subsidies will be received and the Company will comply with all attached conditions. Revenue Grants are recognized in the Profit & Loss Statement. Government grants relating to the specific Property, Plant & Equipment is disclosed in the balance sheet as deferred income and are credited to profit or loss on a straight-line basis over the expected lives of the related assets and presented within other income. Changes in estimates are recognized prospectively over the remaining life of the assets.

(i) Taxation

Income tax expense represents the sum of current and deferred tax. Tax is recognized in the Statement of Profit and Loss, except to the extent that it relates to items recognized directly in equity or other comprehensive income.

Deferred tax is recognized on differences between the carrying amounts of assets and liabilities in the Balance sheet and the corresponding tax bases used in the computation of taxable profit and are accounted for using the liability method. Deferred tax liabilities are generally recognized for all taxable temporary differences, and deferred tax assets are generally recognized for all deductible temporary differences, carry forward tax losses and allowances to the extent that it is probable that in future taxable profits will be available to set off such deductible temporary differences. Deferred tax assets and liabilities are measured at the applicable tax rates. Deferred tax assets and deferred tax liabilities are off set, and presented as net.

Minimum Alternative Tax (MAT) is applicable to the Company. Credit of MAT 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, i.e., the period for which MAT credit is allowed to be carried forward. In the year in which the MAT credit becomes eligible to be recognized as an asset, the said asset is created by way of a credit to the profit and loss account and shown as MAT credit entitlement.

(j) Provisions and Contingencies

(i) Provisions

Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are reviewed at each reporting period and are adjusted to reflect the current best estimate.

(ii) Contingencies

(k) Impairment of non-current assets

(l) Borrowing Cost:

Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying assets treated as of the cost of that asset and other borrowing cost are recognized as expenses in the period in the which it incurs them. Ancillary cost incurred in connection with the borrowings is amortized over the terms of the loan.

(m) Financial instruments - initial recognition, subsequent measurement and impairment

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. A financial assets or a liability is recognized when the Company becomes a Party to the contractual provision of the instrument.

a) Financial Assets

Financial assets include cash and cash equivalent, trade and other receivables, investments in securities and other eligible current and noncurrent assets.

Financial Assets are measured at amortized cost or fair value through Other Comprehensive Income or fair value through Profit or Loss, depending on its business model for managing those financial assets and the assets contractual cash flow characteristics.

Subsequent measurements of financial assets are dependent on initial categorization. For impairment purposes significant financial assets are tested on an individual basis, other financial assets are assessed collectively in groups that share similar credit risk characteristics.

Investment in Equity shares''

Investments in equity securities (Other Than Investment in Subsidiaries & Joint Venture) are initially measured at fair value. Any subsequent fair value gain or loss is recognized through Profit or Loss.

Investment in Subsidiaries & Joint Venture

Investments in subsidiaries and Joint Venture are carried at cost. The cost comprises price paid to acquire investment and directly attributable cost. On transition to IND AS, the Company has adopted optional exception under IND AS 101 to fair value investment in certain subsidiaries at fair value (refer Note no 64).

The company assesses impairment based on expected credit loss (ECL) model to all its financial assets measured at amortized cost.

b) Financial liabilities

Financial liabilities include long term and short term loan and borrowings, trade and other payables and other eligible current and non-current liabilities.

i) Financial liabilities at fair value through profit or loss

ii) Financial liabilities measured at amortized cost

De-recognition of financial liability

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires.

(n) Derivative financial instruments

(o) Revenue recognition and other income

a) Sale of goods

b) Sale of services-job work

Revenue from job work charges are recognized on percentage completion method on invoicing of services and transfer of goods. Percentage of completion is determined as a proportion of cost incurred to date to the total estimated contract cost.

c) Export Incentives

Revenue in respect of Export benefit are recognized on post export basis at the rate at which the entitlement accrues and is included in the turnover.

1.4. Critical accounting estimates, assumptions and judgments

I n the process of applying the Companyâs accounting policies, management has made the following estimates, assumptions and judgments, which have significant effect on the amounts recognized in the financial statement. Uncertainty about these assumptions and estimates could result in outcome that require a material adjustment to assets or liabilities affected in future periods.

(i) Property, plant and equipment

External adviser and internal technical team assess the useful lives, residual value and fair value of property, plant and equipment as on 1^st April 2015. Management believes that the assigned useful lives and residual value are reasonable.

On transition to IND AS, the Company has adopted optional exemption under IND AS 101 for fair valuation of property, plant and equipment, impact of fair valuation is provided in Note no 64 subsequent to fair valuation depreciation has been charged on fair valued amount less estimated salvage value.

(ii) Catalyst is charged to Statement of Profit & Loss Account based on estimated useful life after considering cost less estimated salvage value at the end of each reporting period.

a) Income taxes

Management judgment is required for the calculation of provision for income taxes and deferred tax assets and liabilities based on probability that taxable profit will be available against which the deductible temporary differences can be utilized. The Company reviews at each balance sheet date the carrying amount of deferred tax assets and liabilities. The factors used in estimates may differ from actual outcome which could lead to significant adjustment to the amounts reported in the standalone financial statements.

b) Contingencies

Management judgment is required for estimating the possible outflow of resources, if any, in respect of contingencies/claim/litigations against the Company as it is not possible to predict the outcome of pending matters with accuracy.

c) Allowance for uncollected accounts receivable and advances

Trade receivables and advances are stated at their transaction value as reduced by appropriate allowances for estimated irrecoverable amounts. Trade receivables and advances are written off on case to case basis when management deems them not to be collectible. Impairment is made on the expected credit losses, which are the present value of the cash shortfall over the expected life of the financial assets.

d) Insurance claims

Insurance claims are recognized when the Company have reasonable certainty of recovery. Subsequently any change in recoverability is provided for.

e) Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including Discounted Cash Flow (DCF) model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. Judgments include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments.

f) Impairment of financial assets

The impairment provisions for financial assets are based on assumptions about risk of default and expected loss rates. The Company uses judgment in making these assumptions and selecting the inputs to the impairment calculation, based on Companyâs past history, existing market conditions as well as forward looking estimates at the end of each reporting period.

Mar 31, 2014

A. REVENUE RECOGNITION

(a) Revenue from the sale of goods is recognized at the time of transfer of substantial risks and reward of ownership to the buyers under the term of contract, usually on the delivery of the goods.

(b) Revenue is recognized based on the nature of the activity to the extent it is probable that the economic benefit will flow to the company and the revenue can be reliably measured with the reasonable certainty of its recovery.

(c) Revenue in respect of Export benefits are recognized on post export basis at the rate at which the entitlement accrues and is included in the turnover.

B. FIXED ASSETS AND DEPRECIATION

(a) (i) All tangible fixed assets are stated at their historical cost less accumulated depreciation. Depreciation

on fixed assets, except on leasehold land, EO Derivative unit is provided on straight line method at the rates and in the manner provided in Schedule XIV to the Companies Act, 1956. Depreciation on fixed assets of EO Derivative unit is provided on written down value method (WDV) at the rates and in the manner provided in Schedule XIV to the Companies Act, 1956. Depreciation on additions/disposals is provided with reference to the month of addition/disposal.

(ii) Certain Plant and Machinery considered as continuous process plant based on technical evaluation.

(iii) Leasehold land is amortised over the period of lease.

(b) Intangible assets: Computer software are accounted for at their cost of acquisition and amortised over the estimated useful life i.e. not exceeding six years.

C. EXPENDITURE DURING CONSTRUCTION

Expenditure during construction period is being included under capital work-in progress and the same is allocated to fixed assets on completion of installation / construction.

D. INVESTMENTS

Long term investments are stated at cost. When there is a decline other than temporary in their value, the carrying amount is reduced on individual investment basis and is charged to the Statement of Profit & Loss.

Current Investments are valued at lower of cost or fair value.

E. VALUATION OF INVENTORIES

Inventories are valued ''at lower of cost or net realisable value'' except stock of residual products and scrap which are valued at net realisable value. The cost is computed on the weighted average basis. In case of finished goods and stock in process, cost is determined by considering material, labour, related overheads and duties thereon.

F. FOREIGN EXCHANGE & DERIVATIVE TRANSACTIONS

(a) Foreign currency transactions are recorded at the rate of exchange prevailing at the date of transaction. Foreign Currency Assets and Liabilities are converted at the exchange rates prevailing at the yearend except those covered under firm commitment which are stated at contracted rate. Exchange differences charged to the Statement of Profit & Loss, except arising on account of such conversion related to (i) the purchase of fixed assets is adjusted therewith, and (ii) other long term monetary items is adjusted in the"Foreign Currency Monetary Item Translation Difference".

(b) Transactions covered by derivative contract are adjusted with variations, if any, and are recognised on reinstatement and settlement, except for gains, that are recognised only on settlement. The premium on derivative contract is expensed out over the terms of contract.

G. EMPLOYEES BENEFITS

(a) Defined Contribution Plan:

Employee benefits in the form of Provident Fund (with Government Authorities) are considered as defined contribution plan and the contributions are charged to the Statement of Profit & Loss of the year when the contributions to the respective funds are due.

(b) Defined Benefit Plan:

Retirement benefits in the form of Gratuity and Long term compensated leaves are considered as defined benefit obligations and are provided for on the basis of an actuarial valuation, using the projected unit credit method, as at the date of the Balance Sheet.

Actuarial gain/losses, if any, are immediately recognised in the Statement of Profit & Loss.

(c) Other short term absences are provided based on past experience of leave availed.

H. GOVERNMENT GRANTS

Grants in the nature of Project Capital Subsidy are credited to Capital Reserves. Other Government grants are deducted from the related expenses.

I. BORROWING COST

Interest and other costs in connection with the borrowing of funds are capitalised up to the date when such qualifying assets are ready for its intended use and other borrowing costs are charged to Statement of Profit & Loss. Ancillary cost incurred in connection with the borrowings are amortised over the term of loan.

J. PROVISION FOR CURRENT TAX AND DEFERRED TAX

Provision for current tax has been made on the basis of estimated taxable income computed in accordance with the provisions of Income Tax Act, 1961.

Deferred Tax resulting from all timing differences between book profit and profit as per Income Tax Act, 1961 is accounted for, at the enacted / substantially enacted rate of Tax, to the extent that the timing differences are expected to crystallise. Deferred tax assets are recognised only to the extent that there is a reasonable / virtual certainty that sufficient future taxable profits will be available against which such deferred tax assets can be realised.

K. IMPAIRMENT

Where the recoverable amount of fixed assets is lower than its carrying amount, a provision is made for the impairment loss. Post impairment, depreciation is provided on the revised carrying value of the asset over its remaining useful life.

L. USE OF ESTIMATES AND ASSUMPTIONS

The presentation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual result and the estimates are recognised in the period in which the results are known / materialised.

M. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognised nor disclosed in the financial statements.

Mar 31, 2013

A. REVENUE RECOGNITION

(a) Revenue from the sale of goods is recognized at the time of transfer of substantial risks and reward of ownership to the buyers under the term of contract, usually on the delivery of the goods.

(b) Revenue is recognized based on the nature of the activity to the extent it is probable that the economic benefit will flow to the company and the revenue can be reliably measured with the reasonable certainty of its recovery.

(c) Revenue in respect of Export benefits are recognized on post export basis at the rate at which the entitlement accrues and is included in the turnover.

B. FIXED ASSETS AND DEPRECIATION

(a) (i) All tangible fixed assets are stated at their historical cost less accumulated depreciation. Depreciation on fixed assets, except on leasehold land, EO Derivative unit is provided on straight line method at the rates and in the manner provided in Schedule XIV to the Companies Act, 1956. Depreciation on fixed assets of EO Derivative unit is provided on written down value method (WDV) at the rates and in the manner provided in Schedule XIV to the Companies Act, 1956. Depreciation on additions/disposals is provided with reference to the month of addition/disposal.

(ii) Certain Plant and Machinery considered as continuous process plant based on technical evaluation.

(iii) Leasehold land is amortised over the period of lease.

(b) Intangible assets: Computer software are accounted for at their cost of acquisition and amortised over the estimated useful life i.e. not exceeding six years.

C. EXPENDITURE DURING CONSTRUCTION

Expenditure during construction period is being included under capital work-in progress and the same is allocated to fixed assets on completion of installation / construction.

D. INVESTMENTS

Long term investments are stated at cost. When there is a decline other than temporary in their value, the carrying amount is reduced on individual investment basis and is charged to the Statement of Profit & Loss.

Current Investments are valued at lower of cost or fair value.

E. VALUATION OF INVENTORIES

Inventories are valued ''at lower of cost or net realisable value'' except stock of residual products and scrap which are valued at net realisable value. The cost is computed on the weighted average basis. In case of finished goods and stock in process, cost is determined by considering material, labour, related overheads and duties thereon.

F. FOREIGN EXCHANGE & DERIVATIVE TRANSACTIONS

(a) Foreign currency transactions are recorded at the rate of exchange prevailing at the date of transaction. Foreign Currency Assets and Liabilities are converted at the exchange rates prevailing at the year end except those covered under firm commitment which are stated at contracted rate. Exchange differences charged to the Statement of Profit & Loss, except arising on account of such conversion related to (i) the purchase of fixed assets is adjusted therewith, and (ii) other long term monetary items is adjusted in the "Foreign Currency Monetary Item Translation Difference".

(b) Transactions covered by derivative contract are adjusted with variations, if any, and are recognised on reinstatement and settlement, except for gains, that are recognised only on settlement. The premium on derivative contract is expensed out over the terms of contract.

G. EMPLOYEES BENEFITS

(a) Defined Contribution Plan:

Employee benefits in the form of Provident Fund (with Government Authorities) are considered as defined contribution plan and the contributions are charged to the Statement of Profit and Loss of the year when the contributions to the respective funds are due.

(b) Defined Benefit Plan:

Retirement benefits in the form of Gratuity and Long term compensated leaves are considered as defined benefit obligations and are provided for on the basis of an actuarial valuation, using the projected unit credit method, as at the date of the Balance Sheet.

Actuarial gain/losses, if any, are immediately recognised in the Statement of Profit and Loss.

(c) Other short term absences are provided based on past experience of leave availed.

H. GOVERNMENT GRANTS

Grants in the nature of Project Capital Subsidy are credited to Capital Reserves. Other Government grants are deducted from the related expenses.

I. BORROWING COST

Interest and other costs in connection with the borrowing of funds are capitalised up to the date when such qualifying assets are ready for its intended use and other borrowing costs are charged to Statement of Profit and Loss. Ancillary cost incurred in connection with the borrowings are amortised over the term of loan.

J. PROVISION FOR CURRENT TAX AND DEFERRED TAX

Provision for current tax has been made on the basis of estimated taxable income computed in accordance with the provisions of Income Tax Act, 1961.

Deferred Tax resulting from all timing differences between book profit and profit as per Income Tax Act, 1961 is accounted for, at the enacted / substantially enacted rate of Tax, to the extent that the timing differences are expected to crystallise. Deferred tax assets are recognised only to the extent that there is a reasonable / virtual certainty that sufficient future taxable profits will be available against which such deferred tax assets can be realised.

K. IMPAIRMENT

Where the recoverable amount of fixed assets is lower than its carrying amount, a provision is made for the impairment loss. Post impairment, depreciation is provided on the revised carrying value of the asset over its remaining useful life.

L. USE OF ESTIMATES AND ASSUMPTIONS

The presentation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual result and the estimates are recognised in the period in which the results are known / materialised.

M. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognised nor disclosed in the financial statements.

Mar 31, 2012

A. FIXED ASSETS AND DEPRECIATION

(ii) Certain Plant and Machinery considered as continuous process plant based on technical evaluation.

(iii) Leasehold land is amortized over the period of lease.

(b) Intangible assets: Computer software are accounted for at their cost of acquisition and amortized over the estimated useful life i.e. not exceeding six years.

B. EXPENDITURE DURING CONSTRUCTION

Expenditure during construction period is being included under capital work-in progress and the same is allocated to fixed assets on completion of installation / construction.

C. INVESTMENTS

Long term investments are stated at cost. When there is a decline other than temporary in their value, the carrying amount is reduced on individual investment basis and is charged to Profit & Loss Account.

Current Investments are valued at lower of cost or fair value.

D. VALUATION OF INVENTORIES

Inventories are valued 'at lower of cost or net realizable value' except stock of residual products and scrap which are valued at net realizable value. The cost is computed on the weighted average basis. In case of finished goods and stock in process, cost is determined by considering material, lab our, related overheads and duties thereon.

E. FOREIGN EXCHANGE & DERIVATIVE TRANSACTIONS

a) Foreign currency transactions are recorded at the rate of exchange prevailing at the date of transaction. Foreign Currency Assets and Liabilities are converted at the exchange rates prevailing at the year end except those covered under firm commitment which are stated at contracted rate. Exchange difference is charged to the revenue account except arising on account of such conversion related to (i) the purchase of fixed assets is adjusted therewith, and (ii) other long term monetary items is adjusted in the "Foreign Currency Monetary Item Translation Difference".

b) Transactions covered by derivative contract are adjusted with variations, if any, are recognized on reinstatement and settlement whereas gains are recognized only on settlement. The premium on derivative contract is expensed out over the terms of contract.

F. EMPLOYEES BENEFITS

(a) Defined Contribution Plan:

Employee benefits in the form of Provident Fund (with Government Authorities) are considered as defined contribution plan and the contributions are charged to the Profit and Loss Account of the year when the contributions to the respective funds are due.

(b) Defined Benefit Plan:

Actuarial gain/losses, if any, are immediately recognized in the Profit and Loss Account.

G. GOVERNMENT GRANTS

Grants in the nature of Project Capital Subsidy are credited to Capital Reserves. Other Government grants are deducted from the related expenses.

H. BORROWING COST

Interest and other costs in connection with the borrowing of funds are capitalized up to the date when such qualifying assets are ready for its intended use and other borrowing costs are charged to profit and loss account. Ancillary cost incurred in connection with the borrowings are amortized over the term of loan.

I. PROVISION FOR CURRENT TAX AND DEFERRED TAX

Provision for current tax has been made on the basis of estimated taxable income computed in accordance with the provisions of Income Tax Act, 1961.

Deferred Tax resulting from all timing differences between book profit and profit as per Income Tax Act, 1961 is accounted for, at the enacted / substantially enacted rate of Tax, to the extent that the timing differences are expected to crystallize. Deferred tax assets are recognized only to the extent that there is a reasonable / virtual certainty that sufficient future taxable profits will be available against which such deferred tax assets can be realized.

J. IMPAIRMENT

Where the recoverable amount of fixed assets is lower than its carrying amount, a provision is made for the impairment loss. Post impairment, depreciation is provided on the revised carrying value of the asset over its remaining useful life.

K. USE OF ESTIMATES AND ASSUMPTIONS

The presentation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual result and the estimates are recognized in the period in which the results are known / materialized.

L. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognized nor disclosed in the financial statements.

Mar 31, 2011

A. FIXED ASSETS AND DEPRECIATION

(ii) Certain Plant and Machinery considered as continuous process plant based on technical evaluation.

(iii) Leasehold land is amortised over the period of lease.

(b) Intangible assets: Computer software are accounted for at their cost of acquisition and amortised over the estimated useful life i.e. not exceeding six years.

B. EXPENDITURE DURING CONSTRUCTION

Expenditure during construction period is being included under capital work-in progress and the same is allocated to fixed assets on completion of installation /construction.

C. INVESTMENTS

D. VALUATION OF INVENTORIES

Inventories are valued `at lower of cost or net realisable value' except stock of residual products and scrap which are valued at net realisable value. The cost is computed on the weighted average basis. In case of finished goods and stock in process, cost is determined by considering material, labour, related overheads and duties thereon.

E. FOREIGN EXCHANGE & DERIVATIVE TRANSACTIONS

a) Foreign currency transactions are recorded at the rate of exchange prevailing at the date of transaction. Foreign Currency Assets and Liabilities are converted at the exchange rates prevailing at the yearend except those covered under firm commitment which are stated at contracted rate. Exchange difference is charged to the revenue account except arising on account of such conversion related to (i) the purchase of fixed assets is adjusted therewith, and (ii) other long term monetary items is adjusted in the "Foreign Currency Monetary Item Translation Difference".

b) Transactions covered by derivative contract are adjusted with variations, if any, are recognised on reinstatement and settlement whereas gains are recognised only on settlement. The premium on derivative contract is expensed out over the terms of contract.

F. MANAGEMENT OF RAW MATERIAL (GUAR GUM) PRICES

Risk associated with fluctuation in the prices of Guar Gum (Raw Material) is mitigated by hedging on futures/ options market. The result of this hedging contract/transactions are recorded upon their settlement as part of Raw Material cost. Portion of Cash flow to the extent of underlying transactions having not been completed is carried forward as receivable/payable.

G. EMPLOYEES BENEFITS

(a) Defined Contribution Plan:

(b) Defined Benefit Plan:

H. GOVERNMENT GRANTS

Grants in the nature of Project Capital Subsidy are credited to Capital Reserves. Other Government grants are deducted from the related expenses.

I. BORROWING COST

Interest and other costs in connection with the borrowing of funds are capitalised up to the date when such qualifying assets are ready for its intended use and other borrowing costs are charged to profit and loss account.

J. PROVISION FOR CURRENT TAX AND DEFERRED TAX

Provision for current tax has been made on the basis of estimated taxable income computed in accordance with the provisions of Income Tax Act, 1961.

Deferred Tax resulting from all timing differences between book profit and profit as per Income Tax Act, 1961 is accounted for, at the enacted /substantially enacted rate of Tax, to the extent that the timing differences are expected to crystallise. Deferred tax assets are recognised only to the extent that there is a reasonable / virtual certainty that sufficient future taxable profits will be available against which such deferred tax assets can be realised.

K. IMPAIRMENT

L. USE OF ESTIMATES AND ASSUMPTIONS

The presentation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual result and the estimates are recognised in the period in which the results are known / materialised.

M. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outfow of resources. Contingent liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognised nor disclosed in the financial statements.

Mar 31, 2010

Not Available

Mar 31, 2009

A. Fixed Assets and Depreciation

(a) (i) All tangible fixed assets are stated at their historical cost less accumulated depreciation.

Depreciation on fixed assets, except on leasehold land, EO Derivative unit and Catalysts, is provided on straight line method at the rates and in the manner provided in Schedule XIV to the Companies Act, 1956. Depreciation on fixed assets of EO Derivative unit is provided on written down value method (WDV) at the rates and in the manner provided in Schedule XIV to the Companies Act, 1956. Depreciation on additions/disposals is provided with reference to the month of addition/disposal.

(ii) Certain Plant and Machinery considered as continuous process plant based on technical evaluation.

(iii) Leasehold land is amortised over the period of lease.

(b) Intangible assets: Computer software are accounted for at their cost of acquisition and amortised over the estimated useful life i.e. not exceeding six years.

B. Expenditure During Construction

Expenditure during construction period is being included under capital work-in progress and the same is allocated to fixed assets on completion of installation / construction.

C. Investments

Current Investments are valued at lower of cost or fair value.

D. Valuation of Inventories

Inventories are valued at lower of cost or net realisable value except stock of residual products and scrap which are valued at net realisable value. The cost is computed on the weighted average basis. In case of finished goods and stock in process, cost is determined by considering material, labour, related overheads and duties thereon.

E. Foreign Exchange & Derivative Transactions

b) Transactions covered by derivative contract are adjusted with variations, if any, are recognised on reinstatement and settlement where as gains are recognised only on settlement. The premium on derivative contract is expensed out over the terms of contract.

F. Management of Raw Material (Guar Gum) prices

G. Employees Benefits

(a) Defined Contribution Plan:

(b) Defined Benefit Plan:

Retirement benefits in the form of Gratuity and Long Term compensated leaves are considered as defined benefit obligations and are provided for on the basis of an actuarial valuation, using the projected unit credit method, as at the date of the Balance Sheet.

(c) Other short term absences are provided based on past experience of leave availed. Actuarial gain/losses, if any, are immediately recognised in the Profit and Loss Account.

H. Government Grants

Grants in the nature of Project Capital Subsidy are credited to Capital Reserves. Other Government grants are deducted from the related expenses.

I. Borrowing Cost

J. Provision for Current Tax And Deferred Tax

Provision for current tax has been made on the basis of estimated taxable income computed in accordance with the provisions of Income Tax Act, 1961.

Deferred Tax resulting from all timing differences between book profit and profit as per Income Tax Act, 1961 is accounted for, at the enacted / substantially enacted rate of Tax, to the extent that the timing differences are expected to crystallise. Deferred tax assets are recognised only to the extent that there is a reasonable / virtual certainty that sufficient future taxable profits will be available against which such deferred tax assets can be realised.

K. Impairment

L. Use of Estimates and Assumptions

The presentation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual result and the estimates are recognised in the period in which the results are known / materialised.

M. Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognised nor disclosed in the financial statements.

Mar 31, 2008

A. Fixed Assets And Depreciation

a) i) All tangible fixed assets are stated at their historical cost less accumulated depreciation. Depreciation on fixed assets, except on leasehold land, EO Derivative unit and Catalysts, is provided on straight line method at the rates and in the manner provided in Schedule XIV to the Companies Act, 1956. Depreciation on fixed assets of EO Derivative unit is provided on written down value method (WDV) at the rates and in the manner provided in Schedule XIV to the Companies Act, 1956. Depreciation on catalyst is provided on straight line method (SLM) over the technically assessed useful life. Depreciation on additions/disposals is provided with reference to the month of addition/disposal.

ii) Certain Plant and Machinery considered as continuous process plant based on technical evaluation.

iii) Leasehold land is amortised over the period of lease.

b) Intangible assets: Computer software are accounted for at their cost of acquisition and amortised over the estimated useful life i.e. not exceeding six years.

B. Expenditure During Construction

Expenditure during construction period is being included under capital work-in progress and the same is allocated to fixed assets on completion of installation /construction.

C. Investments

Current Investments are valued at lower of cost or fair value.

D. Valuation Of Inventories

Inventories are valued at lower of cost and net realisable value except stock of residual products and scrap which are valued at net realisable value. The cost is computed on the weighted average basis. In case of finished goods and stock in process, cost is determined by considering material, labour, related overheads and duties thereon.

E. Foreign Exchange & Derivative Transactions

b) Transactions covered by derivative contract are adjusted with variations, if any, are recognised on reinstatement and settlement where as gains are recognised only on settlement. The provision on derivative contract is expensed out over the terms of contract.

F. Management of Raw Material (Guar Gum) prices

Risk associated with fluctuation in the prices of Guar Gum (Raw Material) is mitigated by hedging on futures/options market. The result of this hedging contract/transactions are recorded upon their settlement as part of Raw Material cost. Portion of Cash flow to the extent of underlying transactions having not been completed is carried forward as receivable/payable.

G. Employees Benefits

a) Defined Contribution Plan:

b) Defined Benefit Plan:

Retirement benefits in the form of Gratuity, Long Term compensated leaves and Provident Fund (multi- employer plan) are considered as defined benefit obligations and are provided for on the basis of an actuarial valuation, using the projected unit credit method, as at the date of the Balance Sheet.

c) Other short term absences are provided based on past experience of leave availed. Actuarial gain/losses, if any, are immediately recognised in the Profit and Loss Account.

H. Government Grants

Grants in the nature of Project Capital Subsidy are credited to Capital Reserves. Other Government grants are deducted from the related expenses.

I. Borrowing Cost

J. Provision For Current Tax And Deferred Tax

Provision for current tax has been made on the basis of estimated taxable income computed in accordance with the provisions of Income Tax Act, 1961.

Deferred Tax resulting from all timing differences between book profit and profit as per Income Tax Act, 1961 is accounted for, at the enacted / substantially enacted rate of Tax, to the extent that the timing differences are expected to crystallise. Deferred tax assets are recognised only to the extent that there is a reasonable / virtual certainty that sufficient future taxable profits will be available against which such deferred tax assets can be realised.

K. Impairment

L. Use Of Estimates And Assumptions

The presentation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual result and the estimates are recognised in the period in which the results are known / materialised.

M. Provisions, Contingent Liabilities And Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognised nor disclosed in the financial statements.

Mar 31, 2007

A. FIXED ASSETS AND DEPRECIATION

(a) (i) All tangible fixed assets are stated at their

historical cost less accumulated depreciation. Depreciation on fixed assets, except on leasehold land, EO Derivative unit and Catalysts, is provided on straight line method at the rates and in the manner provided in Schedule XIV to the Companies Act, 1956. Depreciation on fixed assets of EO Derivative unit is provided on written down value method (WDV) at the rates and in the manner provided in Schedule XIV to the Companies Act, 1956. Depreciation on catalyst is provided on straight line method (SLM) over the technically assessed useful life. Depreciation on additions/ disposals is provided with reference to the month of addition/disposal.

(ii) Certain Plant and Machinery considered as continuous process plant based on technical evaluation.

(iii) Leasehold land is amortised over the period of lease.

(iv) Depreciation on increase/decrease in value due to foreign exchange fluctuation is provided on straight line method over the residual life of the assets.

(b) Intangible assets: Computer software are accounted for at their cost of acquisition and amortised over the estimated useful life not exceeding six years.

B. EXPENDITURE DURING CONSTRUCTION Expenditure during construction period is being included under capital work-in progress and the same is allocated to fixed assets on completion of installation/ construction.

C INVESTMENTS

D. VALUATION OF INVENTORIES

determined by considering material, labour, related overheads and duties thereon.

E. FOREIGN EXCHANGETRANSACTIONS Foreign currency transactions are recorded at the rate of exchange prevailing at the date of transaction. Foreign Currency Assets and Liabilities are converted at the exchange rates prevailing at the year end except those covered under firm commitment which are stated at contracted rate. The increase/decrease in liability arising in respect of fixed assets acquired from country outside India is adjusted to the cost of fixed asset and in respect of others is charged to the revenue account.

F. MANAGEMENT OF RAW MATERIAL(GUAR GUM) PRICES

Risk associated with fluctuation in the prices of Guar Gum (Raw Material) are mitigated by hedging on futures/options market. The result of this hedging contract/transactions are recorded upon their settlement as part of Raw Material cost. Portion of Cash flow to the extent of underlying transactions having not been completed is carried forward as receivable/payable.

G. RETIREMENT BENEFITS

The Superannuation Scheme is a defined benefit plan, which has been funded and the annual contribution to the fund is expensed. The Gratuity Scheme is a defined benefit plan, which is funded and the liability of accrued gratuity based on actuarial valuation as confirmed is expensed.The liability of leave encashment benefit is accounted for on actuarial basis as at the year end.

H. GOVERNMENT GRANTS

Grants in the nature of Project Capital Subsidy are credited to Capital Reserves. Other Government grants are deducted from the related expenses.

I. BORROWING COST

J. PROVISION FOR CURRENTTAX AND DEFERRED TAX

Provision for current tax has been made on the basis of estimated taxable income computed in accordance with the provisions of Income Tax Act, 1961. Deferred Tax resulting from all timing differences between book profit and profit as per Income Tax Act, 1961 is accounted for, at the enacted / substantially enacted rate of Tax, to the extent that the timing differences are expected to crystallise. Deferred tax assets are recognised only to the extent that there is

a reasonable / virtual certainty that sufficient future taxable profits will be available against which such deferred tax assets can be realised.

K. IMPAIRMENT

L. USE OF ESTIMATES AND ASSUMPTIONS

The presentation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual result and the estimates are recognised in the period in which the results are known / materialised.

M. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognised nor disclosed in the financial statements.

Mar 31, 2006

1. ACCOUNTING POLICIES

A. FIXED ASSETS AND DEPRECIATION

(a) (i) All tangible fixed assets are stated at their historical cost less accumulated depreciation. Depreciation on fixed assets, except on leasehold land, EO Derivative unit and Catalysts, is provided on straight line method at the rates and in the manner provided in Schedule XIV to the Companies Act, 1956. Depreciation on fixed assets of EO Derivative unit is provided on written down value method (WDV) at the rates and in the manner provided in Schedule XIV to the Companies Act, 1956. Depreciation on catalyst is provided on straight line method (SLM) over the technically assessed useful life. Depreciation on additions/disposals is provided with reference to the month of addition/disposal, (ii) Certain Plant and Machinery considered as continuous process plant based on technical evaluation, (iii) Leasehold land is amortised over the period of lease, (iv) Depreciation on increase/decrease in value due to foreign exchange fluctuation is provided on straight line method over the residual life of the assets.

(b) Intangible assets: Computer software arc accounted for at their cost of acquisition and amortised over the estimated useful life not exceeding six years.

B. EXPENDITURE DURING CONSTRUCTION

Expenditure during construction period is being included under capital work-in progress and the same is allocated to fixed assets on completion of installation/construction.

C. INVESTMENTS

Long term investments arc stated at cost. When there is a decline other than temporary in their value, the carrying amount is reduced on individual investment basis and is charged to Profit & Loss Account.

Current Investments arc valued at lower of cost or fair value.

D. VALUATION OF INVENTORIES

Inventories are valued `at lower of cost and net realisable value' except stock of residual products and scrap which are valued at net realisable value. The cost is computed on the weighted average basis. In case of finished goods and stock in process, cost is determined by considering material, labour, related overheads and duties thereon.

E. FOREIGN EXCHANGE TRANSACTIONS

Foreign currency transactions are recorded at the rate of exchange prevailing on the date of transaction. Foreign Currency Assets and Liabilities are converted at the exchange rates prevailing at the year end except those covered under firm commitment which are stated at contracted rate. The increase/decrease in liability arising in respect of fixed assets acquired from country outside India is adjusted to the cost of fixed asset and in respect of others is charged to the revenue account.

F. RETIREMENT BENEFITS

The Superannuation Scheme is a defined benefit plan, which has been funded and the annual contribution to the fund is expensed. The Gratxiity Scheme is a defined benefit plan, which is funded and the liability of accrued gratuity based on actuarial valuation as confirmed is expensed. The liability of leave encashment benefit is accounted for on actuarial basis as at the year end.

G. GOVERNMENT GRANTS

Grants in the nature of Project Capital Subsidy are credited to Capital Reserves. Other Government grants are deducted from the related expenses.

H. BORROWING COST

I. PROVISION FOR CURRENT TAX AND DEFERRED TAX

Provision for current tax has been made on the basis of estimated taxable income computed in accordance with the provisions of Income Tax Act, 1961.

Deferred Tax resulting from all timing differences between book profit and profit as per Income Tax Act, 1961 is accounted for, at the enacted/substantially enacted rate of Tax, to the extent that the timing differences are expected to crystallise. Deferred tax assets are recognised only to the extent that there is a reasonable/virtual certainty that sufficient future taxable profits will be available against which such deferred tax assets can be realised.

J. IMPAIRMENT

K. USE OF ESTIMATES AND ASSUMPTIONS

The presentation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual result and the estimates arc recognised in the period in which the results are known/materialised.

L. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities arc not recognized but are disclosed in the notes. Contingent assets are neither recognised nor disclosed in the financial statements.

Mar 31, 2005

1. ACCOUNTING POLICIES

A. FIXED ASSETS AND DEPRECIATION

(i) All tangible fixed assets are stated at their historical cost less accumulated depreciation. Depreciation on fixed assets, except on leasehold land, EO Derivative unit and Catalysts, is provided on straight line method at the rates and in the manner provided in Schedule XIV to the Companies Act 1956. Depreciation on fixed assets of EO Derivative unit is provided on written down value method (WDV) at the rates and in the manner provided in Schedule XIV to the Companies Act, 1956. Depreciation on catalyst is provided on straight line method (SLM) over the technically assessed useful life. Certain Plant and Machinery considered as continuous process plant based on technical evaluation. Depreciation on additions/disposals is provided with reference to the month of addition/disposal. Leasehold land is amortised over the period of lease. Depreciation on increase/decrease in value due to foreign exchange fluctuation is provided on straight line method over the residual life of the assets.

(ii) Intangible assets : Computer software are accounted for at their cost of acquisition and amortised over the estimated useful life not exceeding six years.

B. EXPENDITURE DURING CONSTRUCTION

Expenditure during construction period is being included under capital work-in progress and the same is allocated to fixed assets on completion of installation/construction.

C. INVESTMENTS

Long term investments are stated at cost. When there is a decline other than temporary in their value , the carrying amount is reduced on individual investment basis and is charged to Profit & Loss Account.

D. VALUATION OF INVENTORIES

Inventories are valued `at lower of cost and net realisable value' except stock of residue products and scrap which are valued at net realisable value. The cost is computed on the weighted average basis. In the case of finished goods and stock in process, cost is determined by considering material, labour, related overheads and duties thereon.

E. RESEARCH AND DEVELOPMENT

Revenue expenditure on Research and Development is charged to the Profit & Loss Account of the year in which it is incurred. Capital expenditure on Research and Development is added to the fixed assets.

K. FOREIGN EXCHANGE TRANSACTIONS

G. RETIREMENT BENEFITS

The Superannuation Scheme is a defined benefit plan, which has been funded with the Life Insurance Corporation of India (LIC) and the annual contribution to the fund is expensed. The Gratuity Scheme is a defined benefit plan, which is funded with the (LIC) and the liability of accrued gratuity based on actuarial valuation as confirmed by LIC is expensed. The liability of leave encashment benefit is accounted for on actuarial basis as at the year end.

H. GOVERNMENT GRANTS

Grants in the nature of Project Capital Subsidy are credited to Capital Reserves. Other Government grants are deducted from the related expenses.

I. BORROWING COST

J. PROVISION FOR CURRENT TAX AND DEFERRED TAX

Provision for Tax for current year has been made on the basis of estimated taxable income computed in accordance with the provisions of Income Tax Act, 1961.

Deferred Tax resulting from all timing differences between book profit and profit as per Income Tax Act, 1961 is accounted for, at the enacted/substantially enacted rate of Tax, to the extent that the timing differences are expected to crystallise. Deferred tax assets are recognised only to the extent that there is a reasonable/virtual certainty that sufficient future taxable profits will be available against which such deferred tax assets can be realised.

K. IMPAIRMENT

L. SALES

Sales are net of rebate and discounts.

M. USE OF ESTIMATES AND ASSUMPTIONS

The presentation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual result and the estimates are recognised in the period in which the results are known/materialised.

N. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognised nor disclosed in the financial statements.

Mar 31, 2003

A. FIXED ASSETS AND DEPRECIATION

Fixed assets are stated at their historical cost less accumulated depreciation. Depreciation on fixed assets, except on leasehold land, EO Derivative unit and Catalysts, is provided on straight line method at the rates and in the manner provided in Schedule XIV to the Companies Act, 1956. Depreciation on fixed assets of EO Derivative unit is provided on written down value method (WDV) at the rates and in the manner provided in Schedule XIV to the Companies Act, 1956. Depreciation on catalyst is provided on straight line method (SLM) over the technically assessed useful life. Certain Plant and Machinery considered as continuous process plant based on technical evaluation. Depreciation on additions/disposals is provided with reference to the month of addition/disposal. Leasehold land is amortised over the period of lease. Depreciation on increase/decrease in value due to foreign exchange fluctuation is provided on straight line method during the residual life of the assets.

B. EXPENDITURE DURING CONSTRUCTION

Expenditure during construction period is included under capital work-in progress and the same is allocated to fixed assets on commencement of commercial production.

C. INVESTMENTS

D. VALUATION OF INVENTORIES

Inventories are valued 'at lower of cost and net realisable value' except stock of residue products and scrap which are valued at net realisable value. The cost is computed on the weighted average basis. In the case of finished goods and stock in process, cost is determined by considering material, labour, related overheads and duties thereon.

E. RESEARCH AND DEVELOPMENT

F. FOREIGN EXCHANGE TRANSACTIONS

Foreign Currency Assets and Liabilities are converted at the exchange rates prevailing at the year end. The increase/decrease arising out of in respect of fixed assets is adjusted to the cost of fixed asset and in respect of other is charged to revenue account.

G. RETIREMENT BENEFITS

The liability of superannuation and gratuity is funded. The liability of leave encashment benefit is accounted for on acturial basis.

H. GOVERNMENT GRANTS

Grants in the nature of Project Capital Subsidy are credited to Capital Reserves. Other Government grants are deducted from the related expenses.

I. BORROWING COST

J. PROVISION FOR CURRENT TAX AND DEFERRED TAX

Provision for Tax for current year has been made on the basis of estimated taxable income computed in accordance with the provisions as per Income Tax Act, 1961.

Deferred Tax resulting from all timing differences between book profit and profit as per Income Tax Act, 1961 is accounted for, at the enacted rate of Tax, to the extent that the timing differences are expected to crystallise. Deferred tax assets are recognised only to the extent that there is a reasonable certainity that sufficient future taxable profits will be available against which such deferred tax assets can be realised.

K. Contingent Liabilities are not provided for and are disclosed by way of notes.

Mar 31, 2002

A. FIXED ASSETS AND DEPRECIATION

Fixed assets are stated at their historical cost less accumulated depreciation. Depreciation on fixed assets, except on leasehold land and catalysts, is provided on straight line method at the rates and in the manner provided in Schedule XIV to the Companies Act, 1956. Depreciation rates applicable for continuous process plant as defined therein have been taken on technical assessment. Depreciation on additions/disposals is provided pro rata with reference to the month of addition/disposal. Leasehold land is amortised over the period of lease. Depreciation on increase/decrease in value of fixed assets due to foreign exchange fluctuation is provided on straight line method during the residual life of the assets. Depreciation on catalyst is provided on straight line method (SLM) over the technically assessed useful life.

B. EXPENDITURE DURING CONSTRUCTION

Expenditure during construction period is included under capital work-in progress and the same is allocated to fixed assets on commencement of commercial production.

C. INVESTMENTS

D. VALUATION OF INVENTORIES

Inventories are valued `at lower of cost and net realisable value except stock of residue products and scrap which are valued at net realisable value. The cost is computed on the weighted average basis. In the case of finished goods and stock in process, cost is determined by considering material, labour, related overheads and duties thereon.

E. RESEARCH AND DEVELOPMENT

F. FOREIGN EXCHANGE TRANSACTIONS

G. RETIREMENT BENEFITS

The liability of superannuation and gratuity is funded. The liability of leave encashment benefit as estimated by the management is accounted on accrual basis.

H. GOVERNMENT GRANTS

Grants in the nature of Project Capital Subsidy are credited to Capital Reserves. Other Government grants are deducted from the related expenses.

I. BORROWING COST

J. PROVISION FOR CURRENT TAX AND DEFERRED TAX

Provision for Tax for current year has been made on the basis of estimated taxable income computed in accordance with the provisions as per Income Tax Act, 1961.

K. Contingent Liabilities are not provided for and are disclosed by way of notes.

Mar 31, 2001

1. ACCOUNTING POLICIES

A. FIXED ASSETS AND DEPRECIATION

B. EXPENDITURE DURING CONSTRUCTION

Expenditure during construction period is included under capital work-in progress and the same is allocated to fixed assets on commencement of commercial production.

C. INVESTMENTS

D. VALUATION OF INVENTORIES

E. RESEARCH AND DEVELOPMENT

F. FOREIGN EXCHANGE TRANSACTIONS

G. RETIREMENT BENEFITS

The liability of superannuation and gratuity is funded. The liability of leave encashment benefit as estimated by the management is accounted on accrual basis.

H. GOVERNMENT GRANTS

Grants in the nature of Project Capital Subsidy are credited to Capital Reserves. Other Government grants are deducted from the related expenses.

I. BORROWING COST

Interest and other costs in connection with the borrowing of funds are capitalised up to the date when such assets are ready for its intended use and other borrowing costs are charged to profit and loss account.

J. Contingent Liabilities are not provided for and are disclosed by way of notes.

Mar 31, 2000

1. FIXED ASSETS AND DEPRECIATION

2. EXPENDITURE DURING CONSTRUCTION

Expenditure during construction period is included under capital work-in progress and the same is allocated to fixed assets on commencement of commercial production.

3. INVESTMENTS

4. VALUATION OF INVENTORIES

Inventories are valued ' at lower of cost and net realisable value' except stock of residue products and scrap which are valued at net realisable value. The cost is computed on the weighted average basis. In the case of finished goods and stock in process, cost is determined by considering material, labour,f related overheads and duties thereon.

5. RESEARCH AND DEVELOPMENT

Revenue expenditure on Research and Development is charged to the Profit & Loss Account of the year in which it is incurred. Capital expenditure on Research and Development and added to the fixed assets.

6. FOREIGN EXCHANGE TRANSACTIONS

7. RETIREMENT BENEFITS

The liability of superannuation and gratuity is funded. The liability of leave encashment benefit as estimated by the management is accounted on accrual basis.

8. GOVERNMENT GRANTS

Grants in the nature of Project Capital Subsidy are credited to Capital Reserves. Other Government grants are deducted from the related expenses

Mar 31, 1999

1. FIXED ASSETS AND DEPRECIATION

Fixed assets are stated at their historical cost less accumulated depreciation. Depreciation on fixed assets, except on leasehold land and catalysts, is provided on straight line method at the rates and in the manner provided in Schedule XIV to the Companies Act,1956. Depreciation rates applicable for continuous process plant as defined therein have been taken on technical assessment. Depreciation on additions/disposals is provided pro rata with reference to the month of addition/disposal. Leasehold land is amortised over the period of lease. Depreciation on increase/decrease in value of fixed assets due to foreign exchange fluctuation is provided on straight line method during the residual life of the assets.

2. EXPENDITURE DURING CONSTRUCTION

Expenditure during construction period is included under capital work-in progress and the same is allocated to fixed assets on commencement of commercial production.

3. INVESTMENTS

4. VALUATION OF INVENTORIES

Raw material, stores, spares and chemicals are valued at weighted average cost inclusive of duties or market price whichever is lower. Finished goods are valued at cost or market price whichever is lower.

Stock-in-process and loose tools are valued at cost.

Stock of residue product and Scrap are valued at market price.

In the case of finished goods & stock in process cost is determined by considering material, labour and related overheads and duties thereon.

5. RESEARCH AND DEVELOPMENT

6. FOREIGN EXCHANGE TRANSACTIONS

Foreign Currency Assets and Liabilities are converted at the exchange rates prevailing at the year end. The increase/decrease arising out of in respect of fixed assets is adjusted hi the cost of fixed asset and in respect of other is charged to revenue account.

7. RETIREMENT BENEFITS

The liability of superannuation and gratuity is funded. The liability (if leave encashment benefit as estimated by the management is accounted on accrual basis.

8. GOVERNMENT GRANTS

Grants in the nature of Project Capital Subsidy are credited to Capital Reserves. Other Government grants are deducted from the related expenses.

Mar 31, 1998

1. FIXED ASSETS AND DEPRECIATION

2. EXPENDITURE DURING CONSTRUCTION

Expenditure during construction period is included under capital work-in-progress and the same is allocated to fixed assets on commencement of commercial production.

3. INVESTMENTS

4. VALUATION OF INVENTORIES

Raw material, stores, spares and chemicals are valued at weighted average cost or market price whichever is lower. Finished goods are valued at cost or market price whichever is lower.

Stock-in-process and loose tools are valued at cost.

Stock of residue product and Scrap are valued at market price.

In the case of finished goods & stock in process cost is determined by considering material, labour and related overheads.

5. RESEARCH AND DEVELOPMENT

6. FOREIGN EXCHANGE TRANSACTIONS

Foreign Currency Loans/Liabilities are converted at the exchange rates prevailing at the year end. The increase/decrease arising out of in respect of fixed assets is adjusted to the cost of fixed asset and in respect of other is charged to revenue account.

7. RETIREMENT BENEFITS

The liability of superannuation and gratuity is funded. The liability of leave encashment benefit as estimated by the management is accounted on accrual basis.

8. GOVERNMENT GRANTS

Grants are accounted for where it is reasonably certain that the ultimate collection will be made. Grants in the nature of Project Capital Subsidy are credited to Capital Reserves. Other Government grants are deducted from the related expenses.

Mar 31, 1997

1.FIXED ASSETS AND DEPRECIATION : Fixed assets are stated at their historical cost less accumulated depreciation. Depreciation on fixed assets, except on leasehold land and catalysts, is provided on straight line method at the rates and in the manner provided in Schedule XIV to the Companies Act, 1956. Depreciation rates applicable for continuous process plant as defined therein have been taken on technical assessment. Depreciation on additions/disposals is provided pro-rata with reference to the month of addition/disposal. Leasehold land is amortised over the period of lease. Depreciation on increase/decrease in value of fixed assets due to foreign exchange fluctuation is provided on straight line method during the residual life of the assets.

2. EXPENDITURE DURING CONSTRUCTION : Expenditure during construction period is included under capital work-in-progress and the same is allocated to fixed assets on commencement of commercial production.

3. INVESTMENTS : Long term investments are stated at cost. When there is a decline other than temporary in their value, the carrying amount is reduced on individual investment basis and is charged to Profit & Loss Account.

4. VALUATION OF INVENTORIES : Raw materials, stores and spare parts are valued at weighted average cost or market price whichever is lower. Finished goods are valued at cost or market price whichever is lower.

Stock-in-process and loose tools are valued at cost. Stock of residue product is valued at market price.

In the case of finished goods & stock in process cost is determined by considering material, labour and related overheads.

Excise duty on finished goods is accounted at the time of clearance.

5. RESEARCH AND DEVELOPMENT : Revenue expenditure on Research and Development is charged to the Profit & Loss Account of the year in which it is incurred. Capital expenditure on Research and Development is added to the fixed assets.

6. FOREIGN EXCHANGE TRANSACTIONS : Foreign Currency Loans/Liabilities are converted at the exchange rates prevailing at the year end. The increase/decrease arising out of it is adjusted to the cost of fixed assets.

7. RETIREMENT BENEFITS : The liability of superannuation and gratuity is funded. The liability of leave encashment benefit as estimated by the management is accounted on accrual basis.

8. GOVERNMENT GRANTS : a) Grants are accounted for where it is reasonably certain that the ultimate collection will be made.

b) Grants in the nature of Project Capital Subsidy are credited to Capital Reserves. Other Government grants are deducted from the related expenses.

Mar 31, 1996

1. FIXED ASSETS AND DEPRECIATION

Fixed assets are stated at their historical cost less accumulated depreciation. Depreciation on fixed assets, except on leasehold land and catalysts, is provided in straight line method at the rates and in the manner provided in Schedule XIV to the Companies Act, 1956. Depreciation rates applicable for continuous process plant as defined therein have been taken on technical assessment. Depreciation on additions/disposals is provided pro-rata with reference to the month of addition/disposal. Leasehold land is amortised over the period of lease. Depreciation on increase/decrease in value of fixed assets due to foreign exchange fluctuation is provided on straight line method during the residual life of the assets.

2. EXPENDITURE DURING CONSTRUCTION

Expenditure during construction period is included under capital work-in-progress and the same is allocated to fixed assets on commencement of commercial production.

3. INVESTMENTS

4. VALUATION OF INVENTORIES

Raw material, stores, spares and chemicals are valued at weighted average cost or market price whichever is lower. Finished goods are valued at cost or market price whichever is lower.

Stock-in-process and loose tools are valued at cost.

Stock of residue product is valued at market price.

In the case of finished goods & stock in process cost is determined by considering material, labour and related overheads.

Excise duty on finished goods is accounted at the time of clearance.

5. RESEARCH AND DEVELOPMENT

6. FOREIGN EXCHANGE TRANSACTIONS

Foreign Currency Loans/Liabilities are converted at the exchange rates prevailing at the year end. The increase/decrease arising out of it is adjusted to the cost of fixed assets.

7. RETIREMENT BENEFITS

The liability of superannuation is funded. The liability of gratuity and leave encashment benefit as estimated by the management are accounted on accrual basis.

8. AMORTISATION OF MISCELLANEOUS EXPENDITURE

Preliminary, Share Issue and Deferred Revenue expenses are being amortised in equal instalments in five financial years.

9. GOVERNMENT GRANTS

a) Grants are accounted for where it is wasonably certain that the ultimate collection will be made.

b) Grants in the nature of Project Capital Subsidy are credited to Capital Reserves. Other Government grants are deducted from the related expenses.

Mar 31, 1995

SIGNIFICANT ACCOUNTING POLICIES

FIXED ASSETS AND DEPRECIATION

2. EXPENDITURE DURING CONSTRUCTION

Expenditure during construction period is included under capital work-in-progress and the same is allocated to fixed assets on commencement of commercial production.

3. INVESTMENTS

Investments are stated at cost.

4. VALUATION OF INVENTORIES

Raw material, stores, spares and chemicals are valued at weighted average cost or market price whichever is lower. Finished goods are valued at cost or market price whichever is lower.

Stock-in-process and loose tools are valued at cost.

Stock of residue product is valued at market price.

In the case of finished goods & stock in process cost is determined by considering material, labour and related overheads.

Excise duty on finished goods is accounted at the time of clearance.

5. RESEARCH AND DEVELOPMENT

6. FOREIGN EXCHANGE TRANSACTIONS

Foreign Currency Loans/Liabilities are converted at the exchange rates prevailing at the year end. The increase/decrease arising out of it is adjusted to the cost of fixed assets.

7. RETIREMENT BENEFITS

Gratuity and Superannuation liabilities are provided on accrual basis.

8. AMORTISATION OF MISCELLANEOUS EXPENDITURE

Preliminary, Share Issue and Deferred Revenue expenses are being amortised in equal instalments in five financial years.

9. GOVERNMENT GRANTS

a) Grants are accounted for where it is reasonably certain that the ultimate collection will be made.

b) Grants in the nature of Project Capital Subsidy are credited to Capital Reserves. Other Government grants are deducted from the related expenses.

Mar 31, 1994

FIXED ASSETS AND DEPRECIATION Fixed assets are stated at their historical cost less accumulated depreciation. Depreciation on fixed assets, except leasehold land and catalyst, is provided on straight line method at the rates and in the manner provided in Schedule XIV to the Companies Act, 1956. Depreciation on additions/disposals is provided pro-rata with reference to the month of addition/disposal Leasehold land is amortised over the period of lease.

EXPENDITURE DURING CONSTRUCTION Expenditure during construction period is included under capital work in progress and the same will be allocated to fixed assets on commencement of commercial production.

VALUATION OF INVENTORIES Raw materials, stores, spares and chemicals are valued at weighted average cost or market price whichever is lower. Finished goods are valued at cost or market price whichever is lower. Stock-in-process and losse tools are valued at cost. Stock of residue product is valued at market price. In the case of finished goods & Stock in process cost is determined by considering material, labour and related overheads. Excise duty on finished goods is accounted at the time of clearance.

FOREIGN EXCHANGE TRANSACTIONS Foreign Currency Loans/Liabilities are converted at the exchange rates prevailing at year end or at forward contract rates wherever covered by forward contracts. The increase/decrease arising out of it is adjusted to the cost of fixed assets.

AMORTISATION OF MISCELLANEOUS EXPENDITURE Preliminary, share issue and Deferred revenue expenses are being amortised in equal instalments in five financial years.

Mar 31, 1993

FIXED ASSETS AND DEPRECIATION Fixed assets are stated at their historical cost less accumulated depreciation. Depreciation on fixed assets, except leasehold land and catalyst, is provided on straight line method at the rates and in the manner provided in Schedule XIV to the Companies Act, 1956. Depreciation on additions/disposals is provided pro-rata with reference to the month of addition/disposal Leasehold land is amortised over the period of lease.

AMORTISATION OF MISCELLANEOUS EXPENDITURE Preliminary, share issue and Deferred revenue expenses are being amortised in equal instalments in five financial years.

Mar 31, 1992

1. ACCOUNTING CONCEPTS The accounts are prepared on historical cost basis as a going concern following the mercantile system of accounting and recognising income and expenditure on accrual basis.

Accounting policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles.

2. FIXED ASSETS AND DEPRECIATION Fixed assets are stated at their historical cost less accumulated depreciation. Depreciation on fixed assets, except leasehold land and catalysts, is provided on straight line method at the rates and in the manner provided in Schedule XIV to the Companies Act, 1956. On additions/disposals, depreciation is provided pro rata with reference to the month of addition/disposal. Leasehold land is amortised over the period of lease.

3.Depreciation on Catalysts is provided on straight line method over the technically assessed useful life of 2 and 4 years after considering the residual value.

3. FOREIGN EXCHANGE TRANSACTIONS Foreign currency loans/liabilities are converted at the exchange rate prevailing at year end or at forward contracts rates wherever covered by forward contract and increase/decrease out of it adjusted to the cost of fixed assets.

Mar 31, 1991

Leasehold land is being amortised over the period of lease. Depreciation on catalysts has been provided on straight line method over the technically assessed useful life of 2 and 4 years after considering the residual value. Depreciation on other fixed assets has been provided on straight line method at the rates specified in Schedule XIV to the Companies Act, 1956. Depreciation on the assets added/disposed off during the year has been provided on pro-rata basis with reference to the month of addition/disposal.

Preliminary, Share Issue and Deferred Revenue expenses are being amortised in equal instalments in five financial years.

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