Mar 31, 2015
1. Basis of Accounting
The financial statements have been prepared and presented under historical cost convention on the accrual basis of accounting in accordance with the accounting principles generally accepted in India ("GAAP") and comply with the mandatory accounting standards ("AS") as notified by the Companies Accounting Standards (Rules), 2006 to the extent applicable and with the relevant provisions of the Companies Act, 2013.
2. Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent liabilities on the date of financial statements and reported amount of revenues and expenses for the year. Actual results could differ from these estimates. Difference between the actual result and estimates are recognized in the period in which results are known / materialized. Any revision to an accounting estimate is recognized prospectively in the year of revision.
3. Revenue Recognition
a) Revenue from sale of goods is recognized when significant risk and rewards in respect of ownership of products are transferred to customers.
b) Export entitlements under the Duty Entitlement Pass Book ("DEPB") scheme and Other Schemes are recognized as income when the right to receive credit as per the terms of the scheme is established in respect of the exports made and where there is no significant uncertainty regarding the ultimate collection of the relevant export proceeds.
a) Inventories are valued at lower of cost or net realizable value on FIFO basis.
b) Work in Progress is valued at lower of cost of raw Material or Net Realizable Value.
c) Inventories comprises of Raw Material, Stores, Spares & Consumables, Work In Progress and Finished Goods.
d) Cost of inventories comprises of cost of purchase, cost of conversion and other cost incurred in bringing the inventories to their present location and condition.
5. Commodity Hedging (Derivatives)
Pursuant to announcement on accounting for the derivatives issued by the Institute of Chartered Accountants of India (ICAI), in accordance with the principles of prudence as enunciated in Accounting Standard-1 (AS-1), "Disclosure of Accounting policies", the Company provide for losses in respect of all outstanding derivatives contracts at the balance sheet date by marking them to mark to market. Any net unrealized gains arising on such Mark to Market are not recognized as income.
6. Agricultural Activity
a) Biological Assets (Living plants of Mustard, Soya or Jatropha)
i. All costs related to biological assets are recognized as an expense, as and when they are incurred.
ii. Biological assets are recognized at net realizable value only when the future economic benefits associated with the assets will fow to the Company.
b) Agricultural Produce (harvested products from biological asset) is recognized at net realizable value.
7. Certified Emission Reductions
a) Self generated certified emission reductions ( C.E.R- also known as carbon credit ) expected to accrue to the Company as a result of windmills are recognized as a part of inventory, when it is certified by United Nations Framework Convention on Climate Change (UNFCCC) and the future economic benefits associated with such CER's will fow to the company.
b) Incidental expenses are charged to profit and loss account.
8. Fixed Assets
a) Tangible Assets
i. Tangible assets are carried at cost of acquisition or construction less accumulated depreciation. The cost of fixed assets includes non refundable taxes, duties, freight and other incidental expenses related to the acquisition and installation of the respective assets. Borrowing cost attributable to acquisition or construction of fixed assets which takes substantial period of time to get ready for their intended use is capitalized.
ii. Advances paid towards the acquisition of the fixed assets outstanding at each balance sheet date are disclosed under long term loans and advances..
b) Intangible Assets are recorded at the consideration paid for the acquisition.
i. Depreciation on fixed assets has been provided as per the useful life prescribed in Schedule II to the Companies Act, 2013.iv. Depreciation is calculated on a pro-rata basis from the date of installation / acquisition till the date the assets are sold or disposed.
ii. Depreciation has been charged on SLM basis for:
2. Plant assets (except for oil and refnery plant located at Morena)
iii. For all other assets depreciation is provided on WDV basis.
i. Leasehold assets are amortized over the period of lease.
ii. Intangible assets are amortized over their estimated useful lives on straight line basis, commencing from the date the asset is available to the Company for its use.
iii. Goodwill arising in the course of acquisition is amortized over a period of five years.
10. Foreign Currency Transactions
a) Foreign exchange transactions are recorded at the closing rates prevailing on the date of the respective transactions. Exchange difference arising on foreign exchange transactions settled during the year is recognized in the profit and loss account.
b) Monetary assets and liabilities denominated in foreign currencies are converted at the closing rates as on Balance Sheet date. The resultant exchange difference is recognized in the profit and loss account.
c) Exchange rate differences arising on a monetary item that, in substance, forms part of the Company's net investment in a non-integral foreign operation are accumulated in a foreign currency translation reserve in the company's financial statements until the disposal of the net investment.
d) Non monetary assets and liabilities denominated in foreign currencies are carried at the exchange rate prevalent on the date of the transaction.
e) In respect of transactions covered by forward exchange contracts, the difference between the yearend closing rate and rate prevailing on the date of contract is recognized as exchange difference and the premium paid on forward contract is recognized over the life of the contract.
11. Operating Leases
Lease payments under operating leases have been recognized as an expense in the profit and loss account.
12. Employee Benefits
a) Short term Employee Benefits
Short term employee benefits are recognized as an expense at the undiscounted amount in profit and loss account of the year in which the related service is rendered.
b) Post Employment Benefits
Contribution to Provident Fund and Gratuity Fund are charged against revenue. Gratuity liability is paid to the Life Insurance Corporation of India through a Trust created for the purpose under Group Gratuity Scheme. The Premium paid/payable is being charged to Profit and Loss Account on accrual basis.
c) Other Long Term Employees Benefits
Company's liability towards earned leave is determined by an independent actuary using Projected Unit Credit Method. Past services are recognized on a straight line basis over the average period until the benefits become vested. Actuarial gains and losses are recognized immediately in the profit and loss account as income or expenses. Obligation is measured at the present value of the estimated future cash fows using a discounted rate that is determined by reference to the market yields at the balance sheet date on Government Bonds where the currency and terms of the Government Bonds are consistent with the currency and estimated terms of the defend benefit obligation.
Long-term investments are carried at cost less any other then temporary diminution in value. Current investments are carried at the lower of cost or fair value.
Tax expenses are the aggregate of current tax and deferred tax charged or credited in the statement of profit and loss for the period.
a) Current Tax
The current charge for income tax is calculated in accordance with the relevant tax regulations applicable to the company.
b) Minimum Alternate Tax [ MAT]:
In case the Company is liable to pay income tax u/s 115JB of income tax Act,1961 (i.e. MAT), the amount of tax paid in excess of normal income tax is recognized as an asset (MAT Credit Entitlement) only if there is convincing evidence for realization of such asset during the specified period. MAT credit entitlement is reviewed at each balance sheet date.
c) Deferred Tax
Deferred tax charge or credit reflects the tax effects of timing differences between accounting income and taxable income for the period. The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognized using the tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred tax assets are recognized only to the extent there is reasonable certainty that the assets can be realized in future; however, where there is unabsorbed depreciation or carry forward of losses, deferred tax assets are recognized only if there is virtual certainty of realization of such assets. Deferred tax assets are reviewed at each balance sheet date.
15. Government Grant
a) Capital Grant
Government grant related to specific fixed assets which are depreciable are treated as deferred income which is recognized in the profit and loss statement on systematic and rational basis over the useful life of the respective asset. Such allocation to income is usually made over the periods and in the proportions in which depreciation on related assets is charged.
b) Revenue Grant
Revenue grant related to specific tax exemptions is recognized in the Profit and Loss Account on a systematic and rational basis in the year in which it accrues.
16. Borrowing Cost
Borrowing cost attributable to acquisition or construction of a qualifying asset is capitalized as part of the cost of asset up to the date such asset is ready for its intended use. Other borrowing costs are charged to profit and loss account in the year in which they are incurred.
17. Employee Stock Option
Employee Compensation Cost, if any, arising on account of option granted to employees is recognized in the financial statements. It is the difference between the intrinsic value and exercise price of options.
18. Impairment of Assets
The company assesses at each balance sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the assets. If such recoverable amount of the assets or the recoverable amount of the cash generating unit to which the assets belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the profit and loss account. If at the balance sheet date there is an indication that if a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of depreciated historical cost.
19. Provisions and Contingent Liabilities
The Company creates a provision when there is a present obligation as a result of past events that probably requires an outflow of resources and reliable estimates can be made of the amount of the obligation. A disclosure for a contingent liability is made when there is possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Contingent assets are neither recognized nor disclosed.