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Accounting Policies of Kilburn Chemicals Ltd. Company

Mar 31, 2015

(i) Basis of Preparation of Financial Statements:

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

All the assets and liabilities have been classified by the Company as current or non current as per Company's normal operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013. The Company has ascertained its operating cycle as 12 months for the purpose of current or non-current classification of assets and liabilities.

(ii) Use of Estimates:

The preparation of financial statements requires estimates and assumption to be made that effect 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 results and estimates are recognized in the period in which results are known/materialized.

(iii) Fixed Assets and Depreciation:

Fixed Assets are stated at cost less accumulated depreciation. Cost (net of CENVAT, VAT and Service Tax Credits) is inclusive of freight, duties and levies and any directly attributable cost of bringing the assets to their working condition for intended use. Interest and other borrowing cost on borrowed funds, wherever applicable, used to finance the acquisition of fixed assets, upto date the assets are ready for use, are estimated and capitalized and included in the cost of the assets.

Effect due to change in Accounting Policy in respect of Depreciation: Till the year ended 31st March, 2014, Schedule-XIV to the Companies Act, 1956, prescribed requirements concerning depreciation on Tangible and Intangible Fixed Assets was enforced. From the Current Year Schedule-XIV has been replaced by Schedule-II to the Companies Act, 2013 where depreciation is the systematic allocation of the depreciable amount of an asset over its useful life. The depreciable amount of an asset is the cost of the asset or other amount substituted for cost, less residual value. Considering the applicability of Schedule-II, the management has re-estimated useful lives and residual value of all its fixed assets. The applicability of Schedule-II has resulted in the changes related to depreciation of tangible and intangible fixed assets. Unless stated otherwise, the impact mentioned for the current year is likely to be hold good for future years also.

The Expenditure incurred on "CDM" project has been considered by the Company as "Intangible Assets-CDM Project" and amortised on the basis of useful life method as specified in Schedule II of the Companies Act, 2013.

Cost of Leasehold Land will be amortised as and when the same will be used for business purpose.

(iv) Investments:

Non-Current Investments are stated at cost. However, provision for diminution is made to recognize a decline, other than temporary, in the value of investments, such reduction being determined and made for each investments.

Current Investments are carried at cost or fair market rate whichever is lower.

(v) Excise Duty and Cenvat/VAT/Service Tax Credits:

Benefits of Cenvat/VAT and Service Tax Credits (to the extent claimed/availed) are accounted for by adjusting to the cost of relative fixed assets/ materials/expenses.

(vi) Turnover/Sales:

Windmill power sales is being considered by the management as Revenue from Operations.

(vii) Recognition of Revenue and Expenditure:

(a) Income and Expenditure are accounted for on accrual and prudent basis.

(b) Self-generated Certified Emission Reductions (CERS) under the Clean Development Mechanism (CDM):

United Nations Framework Convention on Climate Change (UNFCCC) has registered the Company's "CDM" project on 21-04-2009. Considering the "Exposure Draft of Guidance Note on Accounting for self-generated Certified Emission Reductions (CERS)" issued by The Institute of Chartered Accountants of India (ICAI), "CERS"/income are to be recognized in the financial statements only when the "CERS" are issued/credited/ sold/ certified by "UNFCCC".

(c) Interest on refunds of Government dues and disposal of Scrap/residual materials, if any, are intended to be accounted for as and when the amounts are finally determined and /or materials disposed off.

(viii) Foreign Currency Transactions

Transactions in Foreign Currencies are recorded in rupees by applying the rate of exchange ruling on the date of transaction.

(ix) Borrowing Costs

Borrowing cost incurred in relation to acquisition or construction of assets which necessarily takes substantial period of time to get ready for intended use are capitalized/allocated as part of such assets. Other borrowing costs are charged as expenses in the year in which they are incurred.

(x) Taxes on Income

Tax expense comprises of current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act. Deferred income taxes reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.

Deferred tax is calculated at current statutory income tax rates as applicable and is recognised on timing difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent period. Deferred tax assets subject to consideration to prudence are recognised and carried forward only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised.

(xi) Impairment of Assets

The Company identifies impairable assets at the year end in accordance with the guiding principles of Accounting Standard-28, issued by ICAI, for the purpose of arriving at impairment loss thereon, being the difference in the book value and the recoverable value of the relevant assets. Impairment Loss, when crystalises, are charged against revenues for the year.

(xii) 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, 2014

(i) Basis Of Preparation Of Financial Statements:

These financial statements have been prepared in accordance with the generally accepted accounting principles in India. The financial statements have been prepared to comply in all material respects with the notified Accounting Standards issued by Companies Accounting Standard Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The Financial Statements are prepared under the historical cost convention on an accrual basis (subject to Note (viii) below).

All the assets and liabilities have been classified by the company as current or non current as per Company''s normal operating cycle and other criteria set out in the Schedule VI to the Companies Act,1956. The company has ascertained its operating cycle as 12 months for the purpose of current-non current classification of assets and liabilities.

(ii) Use of Estimates:

The preparation of financial statements requires estimates and assumption to be made that effect 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 results and estimates are recognized in the period in which results are known/materialized.

(iii) Fixed Assets and Depreciation

a. Tangible Fixed Assets

Fixed assets are stated at cost less accumulated depreciation. Cost (net of CENVAT, VAT and Service Tax credits) is inclusive of freight, duties and levies and any directly attributable cost of bringing the assets to their working condition for intended use. Interest and other borrowing costs on borrowed funds, wherever applicable, used to finance the acquisition of fixed assets, upto date the assets are ready for use, are estimated and capitalised and included in the cost of the asset.

b. Depreciation on Tangible Assets -

(i) The cost of leasehold land and development is to be amortised yearly over the balance period of the lease proportionately from the date of commercial production.

(ii) Depreciation on other fixed assets is provided pro-rata to the period of use on straight line method in the manner and at the rates specified in Schedule XIV of the Companies Act, 1956.

(iii) Assets of value not exceeding Rs. 5,000/- are fully depreciated in the period of purchase.

c. Intangible Assets and Amortisation of Intangible Assets

(i) Computer Software is recognized at cost and amortised over a period of five years.

(ii) The Expenditure incurred on "CDM" project has been considered by the company as "Intangible Assets-CDM Project" and amortised over a period of Ten years (life of the CDM Project) (also refer Note (viii) (e) below).

(iv) Investments

Investments that are readily realizable and are intended by the management to be held for not more than one year from the date, on which such investments are made are classified as current investments (also refer Note (a) in Note 10). All other investments are classified as non-current investments. Current investments are carried at cost or fair (market) value whichever is lower. Non-current investments are carried at cost. However, provision for diminution is made to recognize a decline, other than temporary, in the value of investments, such reduction being determined and made for each investments.

(v) Inventories

The Company had no inventories either as on 31.3.2014 or as on 31.3.2013.

(vi) Excise Duty and Cenvat/VAT/Service Tax Credits

Benefits of Cenvat/VAT and Service Tax Credits (to the extent claimed/availed) are accounted for by adjusting to the cost of relative fixed assets/ materials/expenses.

(vii) Turnover/Sales:

Windmill power sales is being considered by the management as Revenue from Operations and

accordingly disclosed in Note 15.

(viii) Recognition of Revenue and Expenditure

(a) Income and Expenditure considered receivable and payable respectively, are accounted for on accrual and prudent basis.(Subject to Notes Below)

(b) Export Benefits - Consideration/Benefits for transfer of DEPB licences and benefits (including for entitlements in hand as on the close of the period and/or to be received) in previous year were accounted for on accrual basis and were being valued at estimated and/or at net estimated realizable value. Adjustments for short/excess realizations, out of Rs. 4,63,033/- outstanding as on 31.3.2014 and brought forward from earlier years are intended to be made on actual dates of realization. No recoveries against such receivable amount was made during the year. As the management considers such amount as fully receivable, no provision has been against such receivable amount. In case there will be any short recovery the results of the company will get affected to that extent.

(c) Interest on refunds of Government dues and disposal of Scrap/residual materials, if any, are intended to be accounted for as and when the amounts are finally determined and /or materials disposed off.

(d) Profit from Commodities (futures) is recognized when payment is due at the end of the settlement period. (also refer Note 3 below).

(e) Self-generated Certified Emission Reductions (CERS) under the Clean Development Mechanism (CDM):

United Nations Framework Convention on Climate Change (UNFCCC) has registered the Company''s "CDM" project on 21.04.2009. Considering the "Exposure Draft of Guidance Note on Accounting for self-generated Certified Emission Reductions (CERS)" issued by ICAI, "CERS"/ income are to be recognized in the accounts only when the "CERS" are issued/credited/sold/ certified by "UNFCCC".

(f) Income tax demands of Rs. 93,74,869/- for an earlier year (against which appeals for non allowability of, brought forward losses relating to certain earlier years to such earlier year, are still pending disposal) and compensation and/or disputed labour demands of Rs. 8,12,967/- relating to earlier years had been paid and/or debited to Statement of Profit and Loss during the earlier years. Refunds / reliefs, if any (including interest) against such payments / debits, the amount whereof are not presently ascertainable, are intended to be accounted for as and when the pending appeals / matters are settled and or refunds received.

Income Tax Assessment after financial year 31.3.2011 are still pending. However there are no outstanding demands in respect of such Assessment years.

(g) Adjustments out of Rs. 23,20,012/- included under trade payables and current liabilities and brought forward since earlier year(s) and not since paid/adjusted are intended to be made as and when such amounts are determined.

(h) Interest not adjusted in accounts since 1.4.2012 on loans of Rs. 2,75,01,331/- from a related party is intended to be accounted for on cash basis (also refer notes 2 and 11).

(i) Also refer notes 1(ix), 1(xii) to (xiv), 2, 3 and 11 (iii) below.

(ix) Retirement benefits (gratuity and leave encashment)

(a) The management has certified that there is no liability (except as stated under (b) below) for gratuity/retirement benefits/leave encashment benefits as on 31.3.2014 and therefore provisions of Accounting Standard (AS-15) issued by ICAI is not applicable for the year. In absence of evidence the auditors have relied on such certificate of the management.

(b) The liability for gratuity and other retirement benefits etc. payable to the Managing Director and certain other employees for the period upto 31.3.2013 and for the year ended 31.3.2014 has neither been provided nor amount ascertained and stated which is not in accordance to the Accounting Standard (AS-15) issued by ICAI.

(c) During the year ended 31.03.2013, the company had provided for these liabilities till 14.10.2011. Any future liability in this regard will be accounted for as and when ascertained and paid. The amounts are presently not ascertainable and hence could not be stated.

(x) Foreign Currency Transactions

(a) There were no foreign currency transactions (either on capital or revenue account) either during this year or in previous Year.

(b) The management has certified that there were no outstanding foreign exchange contracts as on 31.03.2014 and as on 31.3.2013.

(xi) Borrowing Costs

(a) Interest and other costs on borrowed funds, wherever applicable, used to finance the acquisition of fixed assets, upto date the assets are ready for use, are estimated and capitalised under respective fixed assets.

(b) Other interest and costs incurred on borrowed funds are recognised as expense in the period in which they are incurred.

(xii) Taxation

(a) Current Tax - Provision for tax Rs. 2,25,000/- (MAT) (P.Y. Rs. 45,00,000/- (MAT) is as estimated and certified by the management and has been made at prevailing tax rates. Adjustments for short/excess provisions will be determined only on filing of Tax return and or assessments are completed.

(b) The company is entitled to credit in respect of Minimum Alternate Tax (MAT) under the provisions of Income Tax Act, 1961 for the year as well as for earlier years. However, keeping in view the consideration of prudence and probability of availability/availing the MAT credit (which is based on convincing evidence of realization as envisaged by the Guidance Note issued by ICAI), MAT credits, the amount, whereof is not presently ascertainable, has not been considered by the company.

(c) Deferred Tax - The deferred tax liabilities or assets are recognised using current tax rates, to the extent the management feels that there is virtual certainty that sufficient future taxable income will be available against which such deferred tax assets/liabilities can be realized/adjusted. Such assets/liabilities are reviewed as at each Balance Sheet date, to reassess realizations/ liabilities.

(xiii) Impairment of Assets

As required by AS-28 issued by The Institute of Chartered Accountants of India, provision for impairment loss of assets is not required to be made as in view of the management, the estimated realizable value of such assets will be more or equal to the carrying amount stated in the Balance Sheet and the auditors have relied on the certificate of the management in this regard. (Subject to Note 2 below).

(xiv) Provisions, Contingent Liabilities and Contingent Assets

a) Provisions are recognised in respect of obligations where, based on the evidences available and their existence at the Balance Sheet date are considered probable.

b) Contingent liabilities are shown by way of Notes on Accounts in respect of obligations where, based on the evidences available, their existence at the balance sheet date are considered not probable.

The management has certified that there are no pending cases /claims against the company by employees, income tax and other government authorities, which need to be disclosed by way of Notes on accounts or need to be provided in Accounts.

c) Contingent Assets are neither recognized nor disclosed in Accounts.


Mar 31, 2013

(i) Basis Of Preparation of Financial Statements:

These financial statements have been prepared in accordance with the generally accepted accounting principles in India. The financial statements have been prepared to comply in all material respects with the notified Accounting Standards issued by Companies Accounting Standard Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The Financial Statements are prepared under the historical cost convention on an accrual basis.

All the assets and liabilities have been classified as current or non current as per Company''s normal operating cycle and other criteria set out in the Schedule VI to the Companies Act,1956. The Company has ascertained its operating cycle as 12 months for the purpose of current-non current classification of assets and liabilities.

(ii) Use of Estimates:

The preparation of financial statements requires estimates and assumption to be made that effect 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 results and estimates are recognized in the period in which results are known/materialized.

(iii) Fixed Assets and Depreciation

a. Tangible Fixed Assets

Fixed assets are stated at cost less accumulated depreciation. Cost (net of CENVAT, VAT and Service Tax credits) is inclusive of freight, duties and levies and any directly attributable cost of bringing the assets to their working condition for intended use. Interest and other borrowing costs on borrowed funds, wherever applicable, used to finance the acquisition of fixed assets, upto date the assets are ready for use, are estimated and capitalised and included in the cost of the asset.

b. Depreciation on Tangible Assets –

(i) The cost of leasehold land and development is to be amortised yearly over the balance period of the lease proportionately from the date of commercial production.

(ii) Depreciation on other fixed assets is provided pro-rata to the period of use on straight line method in the manner and at the rates specified in Schedule XIV of the Companies Act, 1956.

(iii) Assets of value not exceeding Rs.5000/- are fully depreciated in the period of purchase.

c. Intangible Assets and Amortisation of Intangible Assets

(i) Computer Software is recognized at cost and amortised over a period of five years.

(ii) The Expenditure incurred on "CDM" project has been considered by the Company as "Intangible Assets-CDM Project" and amortised over a period of Ten years (life of the CDM Project) (also refer Note (vii) below).

(iv) Investments

Investments that are readily realizable and are intended to be held for not more than one year from the date, on which such investments are made are classified as current investments. All other investments are classified as non-current investments. Current investments are carried at cost or fair value whichever is lower. Non-current investments are carried at cost. However, provision for diminution is made to recognize a decline, other than temporary, in the value of investments, such reduction being determined and made for each investments.

(v) Inventories

The Company had no inventories either as on 31.3.2013 or as on 31.3.2012.

(vi) Excise Duty and Cenvat/VAT/Service Tax Credits

Benefits of Cenvat/VAT and Service Tax Credits (to the extent claimed/availed) are accounted for by adjusting to the cost of relative fixed assets/ materials/expenses.

(vii) Recognition of Revenue and Expenditure

(a) Income and Expenditure considered receivable and payable respectively, are accounted for on accrual and prudent basis.

(b) Turnover/Sales

(i) There were no sales of products during the year.

(ii) Windmill power sales has this year been considered by the management as Revenue from Operations and accordingly disclosed in Note 16. In previous year such sales were adjusted with Power & Fuel in Note 22.

(iii) In previous year :

a) Domestic sales were recognized on despatch of goods and were inclusive of excise duty but excluding sales tax/vat.

b) Export Sales were recognized on the basis of dates of Bills of Lading and were exclusive of excise duty as such Export Sales were being made without payment of excise duty.

(c) Export Benefits - Consideration/Benefits for transfer of DEPB licences and benefits (including for entitlements in hand as on the close of the period and/or to be received) were accounted for on accrual basis and were being valued at estimated and/or at net estimated realizable value. Adjustments for short / excess realizations, if any, are to be made on actual dates of realizations.

(d) Interest on refunds of Government dues and disposal of Scrap/residual materials, if any, are intended to be accounted for as and when the amounts are finally determined and /or materials disposed off.

(e) Profit from Commodities (futures) is recognized when payment is due at the end of the settlement period. (also refer Note 3 below).

(f) Self-generated Certified Emission Reductions (CERS) under the Clean Development Mechanism (CDM):

United Nations Framework Convention on Climate Change (UNFCCC) has registered the Company''s "CDM" project on 21-04-2009. Considering the "Exposure Draft of Guidance Note on Accounting for self-generated Certified Emission Reductions (CERS)" issued by ICAI, "CERS"/income are to be recognized in the accounts only when the "CERS" are issued/credited/sold/ certified by "UNFCCC".

(g) Income tax demands of Rs.Nil (P.Y. Rs.9374869/-) for an earlier year(against which appeals for non allowability of, brought forward losses relating to certain earlier years are pending) and compensation and/or disputed labour demands of Rs.5,00,000/- (P.Y. Rs.312967/-) relating to earlier years have been paid and/or debited to Statement of Profit and Loss during the year. Refunds / reliefs, if any (including interest) against such payments / debits, the amount whereof are not presently ascertainable, are intended to be accounted for as and when the pending appeals / matters are settled and or refunds received.

(h) Provision for long and short term loans and Advances, Trade Receivables and Other current assets including trade receivables and loan due from a body corporate (related party) brought forward from earlier year(s) and or not since realised /adjusted, and outstanding as on 31.03.2013, which may not be recoverable, the amounts whereof has not been ascertained and stated, is intended to be made as and when such amounts are found to be irrecoverable and or the amounts are determined.

(i) Adjustments relating to amounts included under current/non-current liabilities and brought forward since earlier year(s) and not since paid/adjusted are intended to be made as and when such amounts are determined.

(j) Unlike as in previous year, interest of Rs.33,65,233/- receivable on loan of Rs.2,75,01,331/- from a related party (refer Note 14) is intended to be accounted for as and when the same is received. Due to such change in accounting the profit for the year is reduced by Rs.33,65,233/-.

(viii) Employee benefits

(a) The management has certified that there is no liability (except as stated under (b) below) for gratuity/ retirement benefits/leave encashment benefits as on 31.3.2013 and therefore provisions of Accounting Standard (AS-15) issued by ICAI is not applicable for the year.

(b) The liability for gratuity and other retirement benefits etc. payable to the Managing Director and certain other employees for the period upto 31.3.2013 has neither been provided nor amount ascertained and stated which is contrary to Accounting Standard (AS-15) issued by ICAI.

(c) In previous year, the Company had provided for these liabilities till 14.10.2011. Any future liability in this regard will be accounted for as and when ascertained and paid. The amounts are presently not ascertainable and hence not stated.

(ix) Foreign Currency Transactions

(a) In previous year :

(i) All transactions in foreign currency were recorded at the rates of exchange prevailing on the dates when the relevant transactions took place.

(ii) Foreign currency monetary items at the Balance Sheet date were translated at the exchange rate prevailing on the date of the Balance Sheet.

(iii) Exchange rate differences resulting from foreign exchange transactions on revenue account, settled during the period, including on period end translation of monetary items, were recognized in the statement of Profit and Loss.

(b) There were no exchange rate differences resulting on capital account either during this year or in previous year.

(c) There were no outstanding foreign exchange contracts as on 31.03.2013 and as on 31.3.2012.

(x) Borrowing Costs

(a) Interest and other costs on borrowed funds, wherever applicable, used to finance the acquisition of fixed assets, upto date the assets are ready for use, are estimated and capitalised under respective fixed assets.

(b) Other interest and costs incurred on borrowed funds are recognised as expense in the period in which they are incurred.

(xi) Taxation

(a) Current Tax - Provision for tax Rs.45.00 Lacs (MAT) (P.Y. Rs.13.61 crores - including capital gain tax on slump sales) is as estimated and certified by the management and has been made at prevailing tax rates and in previous year was after adjusting available MAT Credit and tax benefits. Final tax liability is to be determined only at the time of filing Tax return.

(b) The Company is entitled to further credit in respect of Minimum Alternate Tax (MAT) under the provisions of Income Tax Act, 1961. However, keeping in view the consideration of prudence and probability of availability/availing the MAT credit (which is based on convincing evidence of realization as envisaged by the Guidance Note issued by ICAI), MAT credits, the amount, whereof is not presently ascertainable, has not been considered by the Company.

(c) Deferred Tax – The deferred tax liabilities or assets are recognised using current tax rates, to the extent the management feels that there is virtual certainty that sufficient future taxable income will be available against which such deferred tax assets/liabilities can be realized/adjusted. Such assets/liabilities are reviewed as at each Balance Sheet date, to reassess realizations/liabilities.

(xii) Impairment of Assets

As required by AS-28 issued by The Institute of Chartered Accountants of India, provision for impairment loss of assets is not required to be made as in view of the management, the estimated realizable value of such assets will be more or equal to the carrying amount stated in the Balance Sheet and the auditors have relied on the certificate of the management in this regard.

(xiii) Provisions, Contingent Liabilities and Contingent Assets

a) Provisions are recognised in respect of obligations where, based on the evidences available and their existence at the Balance Sheet date are considered probable.

b) Contingent liabilities are shown by way of Notes on Accounts in respect of obligations where, based on the evidences available, their existence at the balance sheet date is considered not probable.

c) Contingent Assets are neither recognized nor disclosed in Accounts.


Mar 31, 2012

(i) Basis of Preparation of Financial Statements:

These financial statements have been prepared in accordance with the generally accepted accounting principles in India. The financial statements have been prepared to comply in all material respects with the notified Accounting Standards issued by Companies Accounting Standard Rules,2006(as amended) and the relevant provisions of the companies Act, 1956. The Financial Statements are prepared under the historical cost convention on an accrual basis.

All the assets and liabilities have been classified as current or non current as per Company's normal operating cycle and other criteria set out in the Schedule VI to the Companies Act,1956. The company has ascertained its operating cycle as 12 months for the purpose of current-non current classification of assets and liabilities.

(ii) Use of Estimates:

The preparation of financial statements requires estimates and assumption to be made that effect 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 results and estimates are recognized in the period in which results are known/materialized.

(iii) Fixed Assets and Depreciation

a. Tangible Fixed Assets

Fixed assets are stated at cost less accumulated depreciation. Cost (net of CENVAT, VAT and Service Tax credits) is inclusive of freight, duties and levies and any directly attributable cost of bringing the assets to their working condition for intended use. Interest and other borrowing costs on borrowed funds used to finance the acquisition of fixed assets, upto date the assets are ready for use, are estimated and capitalised and included in the cost of the asset.

b. Depreciation on Tangible Assets -

(i) The cost of leasehold land is amortised yearly over the balance period of the lease proportionately from the date of commercial production.

(ii) Depreciation on other fixed assets is provided pro-rata to the period of use on straight line method in the manner and at the rates specified in Schedule XIV of the Companies Act, 1956.

(iii)Assets of value not exceeding Rs.5000/- are fully depreciated in the period of purchase.

c. Intangible Assets and Amortisation of Intangible Assets

(i) Computer Software is recognized at cost and amortised over a period of five years.

(ii) The Expenditure incurred on "CDM" project has been considered by the company as "Intangible Assets-CDM Projecf and amortised over a period of Ten years (life of the CDM Project)

(iv) Investments

Investments that are readily realizable and are intended to be held for not more than one year from the date, on which such investments are made are classified as current investments. All other investments are classified as long term investments. Current investments are carried at cost or fair value whichever is lower. Long term investments are carried at cost. However, provision for diminution is made to recognize a decline, other than temporary, in the value of investments, such reduction being determined and made for each investments.

(v) Inventories

a. There are no inventories at 31.03.2012.

b. Inventories were valued at lower of cost (net of Cenvat/VAT Credits), and net realizable value as certified by the management. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and estimated cost necessary to make the sale. Cost for the purpose of valuation of:

(i) Raw-materials and stores and spare parts etc., is computed on weighted average method.

(ii) Finished goods and Work-in-process is computed on the basis of estimated cost of materials, labour, conversion and other costs for bringing the inventories to their present location and condition.

(ili) Stock in Trade is computed on the basis of actual cost paid.

(vi) Excise Duty and Cenvat/VAT/Service Tax Credits

a) In previous year, the value of closing stock of finished goods lying in factory premises was inclusive of excise duty.

b) Benefits of Cenvat/VAT and Service Tax Credits (to the extent claimed/Availed) are accounted for by adjusting to the cost of relative fixed assets/ materials/expenses.

(vii) Recognition of Revenue and Expenditure

(a) Income and Expenses considered receivable and payable respectively, are accounted for on accrual and prudent basis.

(b) Turnover/Sales -

(i) Domestic Sales are recognized on dispatch of goods and are inclusive of excise duty but excluding sales tax/Vat.

(ii) Export Sales are recognized on the basis of dates of Bills of Lading and are exclusive of excise duty as such Export Sales are being made without payment of excise duty.

(c) Export Benefits - Consideration/Benefits for transfer of DEPB licences and benefits (including for entitlements in hand as on the close of the period and to be received) are accounted for on accrual basis and are being valued at estimated and/or at net estimated realizable value. Adjustments for short / excess realizations, if any, are to be made on actual dates of realizations.

(d) Interest on refunds of Government dues and disposal of Scrap/residual materials are accounted for when the amounts are finally determined and /or materials disposed off.

(e) Profit from Commodities (futures) is recognized when payment is due at the end of the settlement period.

(f) Self-generated Certified Emission Reductions (CERS) under the Clean Development Mechanism (CDM):

United Nations Framework Convention on Climate Change (UNFCCC) has registered the Company's "CDM" project on 21 -04-2009. Considering the "Exposure Draft of Guidance Note on Accounting for self-generated Certified Emission Reductions (CERS)" issued by ICAI, "CERS'Yincome are to be recognized in the accounts only when the "CERS" are issued/ credited/sold/ certified by "UNFCCC".

(g) Income tax demands of Rs. 93,74,869/-, for an earlier year(against which appeals for non allowability of, brought forward losses relating to certain earlier years to such earlier year, are pending) and disputed labour demands of Rs. 3,12,967/- relating to earlier years have been paid and/or debited to Statement of Profit and Loss during the year. Refunds / reliefs, if any (including interest) against such payments / debits, the amount whereof are not presently ascertainable, are intended to be accounted for as and when the pending appeals / matters are settled and or refunds received.

(h) Provision for long and short term loans and Advances, Trade Receivables and Other current assets brought forward from earlier year(s) and or not since realised /adjusted, and outstanding as on 31.03.2012, which may not be recoverable, the amounts whereof has not been ascertained and stated, is intended to be made as an when such amounts are found to be irrecoverable and or the amounts are determined.

(viii) Employee benefits

(a) Gratuity - The liability for Gratuity is covered under Group Gratuity Scheme with Life Insurance Corporation of India. Liability up to 14.10.2011 has been provided for on basis of actuarial valuation. The company has not made any provision thereafter. Any future liability in this regard will be accounted for as and when ascertained and paid.

(b) Leave Encashment - Liability for Leave Encashment benefits is accounted for on basis of actuarial valuation up to 14.10.2011. The company has not made any provision thereafter. Any future liability in this regard will be accounted for as and when ascertained and paid.

(c) Provident Fund - The Company has not deducted and contributed any amount towards provident Fund after 14.10.2011, as it has been advised that after such date it is not obliged to deduct/contribute any amount. Any future liability in this regard will be accounted for as and when ascertained and paid.

(ix) Foreign Currency Transactions

(a) All transactions in foreign currency, are recorded at the rates of exchange prevailing on the dates when the relevant transactions take place.

(b) Foreign currency monetary items at the Balance Sheet date are translated at the exchange rate prevailing on the date of the Balance Sheet.

(c) Exchange rate differences resulting from foreign exchange transactions on revenue account, settled during the period, including on period end translation of monetary items, are recognized in the statement of Profit and Loss.

(d) There were no exchange rate differences resulting on capital account.

(e) There were no outstanding foreign exchange contracts as on 31.03.2012.

(x) Borrowing Costs

Interest and other costs on borrowed funds used to finance the acquisition of fixed assets, upto date the assets are ready for use, are estimated and capitalised under respective fixed assets.

Other interest and costs incurred on borrowed funds are recognised as expense in the period in which they are incurred.

(xi) Taxation

Current Tax - Provision for tax(including capital gain tax on slump sales) has been made at prevailing tax rates after adjusting available MAT Credit and tax benefits. Final tax liability is to be determined only at the time of filing Tax return.

Deferred Tax - The deferred tax liabilities or assets are recognised using current tax rates, to the extent the management feels that there is virtual certainty that sufficient future taxable income will be available against which such deferred tax assets/liabilities can be realized/adjusted.

(xii) Research and Development

Routine expenditure considered as of revenue nature is charged to revenue under the natural heads of account in the year in which it is incurred. The Expenditure of capital nature, if any, is capitalized as fixed assets.

(xiii)Impairment of Assets

As required by AS-28 issued by The Institute of Chartered Accountants of India, provision for impairment loss of assets is not required to be made as in view of the management, the estimated realizable value of such assets will be more or equal to the carrying amount stated in the Balance Sheet and the auditors have relied on the certificate of the management in this regard.

(xiv)Provisions, Contingent Liabilities and Contingent Assets

a) Provisions are recognised in respect of obligations where, based on the evidences available and their existence at the Balance Sheet date are considered probable.

b) Contingent liabilities are shown by way of Notes on Accounts in respect of obligations where, based on the evidences available, their existence at the balance sheet date is considered not probable.

c) Contingent Assets are neither recognized nor disclosed in Accounts.


Mar 31, 2010

(i) Basis of Preparation of Financial Statements

The Financial Statements are prepared on going concern assumption and under the historical cost convention, in accordance with generally accepted Accounting principles in India and the provisions of the Companies Act, 1956.

(ii) Use of Estimates

The preparation of financial statements requires estimates and assumption to be made that effect 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 results and estimates are recognized in the period in which results are known/materialized.

(iii) Fixed Assets

Fixed assets are stated at cost less accumulated depreciation. Cost (net of CENVAT, VAT and Service Tax credits) is inclusive of freight, duties and levies and any directly attributable cost of bringing the assets to their working condition for intended use. Interest and other borrowing costs on borrowed funds used to finance the acquisition of fixed assets, upto date the assets are ready for use, are estimated and capitalised and included in the cost of the asset.

(iv) Depreciation

a) The cost of leasehold land is amortised yearly over the balance period of the lease proportionately from the date of commercial production.

b) Depreciation on other fixed assets is provided pro-rata to the period of use on straight line method in the manner and at the rates specified in Schedule XIV of the Companies Act, 1956.

c) Assets of value not exceeding Rs. 5,000/- are fully depreciated in the year of purchase.

(v) Investments

a) Investments are stated at cost.

b) Provision of temporary diminution (amount not ascertained and stated) in the value of long term investments is made only if such a decline is other than temporary, in the opinion of the management.

(vi) Valuation of Inventories

a) Inventories are valued at lower of cost (net of Cenvat/VAT Credits) and net estimated realisable value, as certified by the management. Cost for the purpose of valuation of:

(i) Raw-materials and stores and spare parts etc., is computed on weighted average method.

(ii) Finished goods and Stock-in-process is computed on the basis of estimated cost of materials, labour, conversion and other costs for bringing the inventories to their present location and condition.

(iii) Traded goods is computed on the basis of actual cost paid.

b) There are no significant machinery spares lying in stock which can be specifically used to a particular item of fixed assets or their use is expected to be irregular.

c) There are no obsolete/slow moving stocks for which provisions need to be made in accounts.

(vii) Excise Duty and Cenvat/VAT/Service Tax Credits

a) The value of closing stock of finished goods lying in factory premises are inclusive of excise duty.

b) Benefits of Cenvat/VAT and Service Tax Credits (to the extent claimed/availed) are accounted for by adjusting to the cost of relative fixed assets/materials/expenses.

(viii) Revenue Recognition

a) Expenses and income considered payable and receivable respectively, are accounted for on accrual and prudent basis.

b) Interest on refunds of Government dues and disposal of Scrap/residual materials are accounted for when the amounts are finally determined and or materials disposed off.

c) Self-generated Certified Emission Reductions (CERS) under the Clean Development Mechanism(CDM):

United Nations Framework Convention on Climate Change (UNFCCC) has Registered the Companys "CDM" project on 21-04-2009. Considering the "Exposure Draft of Guidance Note on Accounting for Self-generated Certified Emission Reductions (CERS)" issued by ICAI, "CERS" are to be recognised in the accounts only when the "CERS" are issued/credited/certified by "UNFCCC". The Expenditure of Rs. 10,67,719/- incurred on "CDM" project has been considered by the company as "Intangible Assets-CDM Project" and included in Schedule 6 of Fixed Assets and amortised over a period of Ten years. The relative figures/value, if any, of "CERS" is presently not ascertainable and stated.

(ix) Retirement benefits

a) The liability for Gratuity is covered under Group Gratuity Scheme with Life Insurance Corporation of India.

b) Liability for Leave Encashment benefits is accounted for on basis of actuarial valuation

c) The disclosures required under AS-15 (revised) are set out in Note 11 below.

(x) Turnover/Sales

a) Sales (including exports) are recognized on despatch of goods.

b) Local Sales are inclusive of excise duty but excluding sales tax/Vat.

c) Export Sales are exclusive of excise duty as such Export Sales are being made without payment of excise duty.

(xi) Foreign Currency Transactions

a) Transactions arising in foreign currency are accounted for at rates of exchange prevailing on the dates of transactions.

b) Foreign currency monetary items at the Balance Sheet date are translated at the exchange rate prevailing on the date of the Balance Sheet.

c) Exchange rate differences resulting from foreign exchange transactions on revenue account, settled during the year, including on year end translation of monetary items, are recognized in the Profit & Loss Account.

d) There were no exchange rate differences resulting on capital account.

(xii) Export Benefits

Consideration/Benefits for transfer of DEPB licences and benefits (including for entitlements in hand as on the close of the year and to be received) are accounted for on accrual basis and are being valued at estimated and or net estimated realizable value. Adjustments for short/excess realizations, if any, are to be made on actual dates of realizations.

(xiii) Borrowing Costs

Interest and other costs on borrowed funds used to finance the acquisition of fixed assets, upto date the assets are ready for use, are estimated and capitalised under respective fixed assets.

Other interest and costs incurred on borrowed funds are recognised as expense in the year in which they are incurred.

(xiv) Taxation

a) (i) Provision for taxation (this year MAT) Rs.115 lacs (P.Y. Rs.59 lacs) made in accounts is as estimated.

The final tax liability is to be determined only on filing of Tax returns.

(ii) The Company is entitled to credit in respect of Minimum Alternate Tax (MAT) under the provisions of the Income Tax Act, 1961. However, read with Note 3(v)below and keeping in view the consideration of prudence and the probability of availability/availing the MAT Credit (which is based on convincing evidence of realization as envisaged by the Guidance Note issued by ICAI), MAT Credits (including for earlier years), the amount, whereof is not presently ascertainable, has not been considered by the Company.

b) The deferred tax liabilities or assets are recognised using current tax rates, to the extent the management feels that there is virtual certainty that sufficient future taxable income will be available against which such deferred tax assets/liabilities can be realised. Such assets/liabilities are reviewed as at each balance sheet date, to reassess realization / liabilities.

(xv) Research and Development

Routine expenditure considered as of revenue nature are charged to revenue under the natural heads of account in the year in which it is incurred. The Expenditure of capital nature, if any, is capitalized as fixed assets.

(xvi) Intangible Assets

Intangible assets (Computer Software) are recognized at cost and amortized over a period of five years (read also para (viii)(c) above).

(xvii) Impairment of Assets

As required by AS-28 issued by the Institute of Chartered Accountants of India, provision for impairment loss of Assets is not required to be made as in view of the management, the estimated realizable value of such assets will be more or equal to the carrying amount stated in the Balance Sheet and the Auditors have relied on the certificate of the management in this regard.

(xviii) Provisions, Contingent Liabilities and Contingent Assets

a) Provisions are recognised in respect of obligations where, based on the evidences available and their existence at the Balance Sheet date are considered probable.

b) Contingent liabilities are shown by way of Notes on Accounts in respect of obligations where, based on the evidences available, their existence at the balance sheet date are considered not probable.

c) Contingent Assets are neither recognized nor disclosed in Accounts.

 
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