Accounting Policies of Maharashtra Polybutenes Ltd. Company

Mar 31, 2015

A. General

Accounts are prepared under the historical cost basis in accordance with Generally Accepted Accounting Principles (GAAP), Accounting Standards notified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules 2014 and the relevant provisions of the Companies Act 2013 All Income and expenditure having material bearing are recognized on accrual basis, except where otherwise stated.

B. Use of estimates

The presentation of financial statements is in conformity with generally accepted accounting principles and it requires management to make estimates and assumptions that affects the reported amounts of assets and liabilities, and the disclosure of contingent liabilities on the date of financial statements. Actual results could differ from those estimates. Any revision to accounting estimates is recognized prospectively in current and future periods.

C. Fixed Assets

Fixed assets are stated at cost which is inclusive of freight, duties, taxes and all other incidental expenses related thereto. The diminution, if any, in the book value of these assets is provided for in the year of such determination of diminution.

D. Depreciation / Amortization

I) Depreciation / amortization on the original cost of fixed assets is provided as under :

a) Leasehold land premium is being amortized from the commencement of commercial production over the remaining period of the lease.

b) In respect of other items of fixed assets, However consequent to the enactment of the Companies Act 2013 (The Act) and its applicability for accounting periods commencing after 1 April 2014 ,the company has re-worked depreciation with reference to the estimated economic lives of fixed assets in the manner prescribed by Schedule II to the Act as against past practice of providing depreciation at the rates prescribed in Schedule XIV of the Companies Act,1956.In case of any assets whose useful life has completed at the beginning of the year ,the carrying value ,net of the residual value, as at 1-4-2014 has been adjusted to the retained earnings and in other cases the carrying value has been depreciated over the remaining useful life of the assets and recognized in the Statement of Profit and Loss Account .As a result of this change ,the charge of depreciation in the statement of Profit and Loss Account is lower by Rs 18.50 Lacs and retained earning has been reduced by Rs.198.85 lakhs.

E. Revenue:

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.

Sale of Goods

Revenue is recognized when the significant risks and rewards of ownership of the goods have passed to the buyer.

Interest

Revenue is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

Expenditure

Expenses are accounted on accrual basis and the provisions are made for all known liabilities.

F. Investments:

Current investments are carried at lower of cost and quoted/fair value, computed category wise. Long Term Investments are stated at cost. Provision for diminution in the value of long- term investments is made only if such a decline is other than temporary.

G. Leased Assets:

a) Operating Leases: Rentals are expensed with reference to lease terms and other considerations.

b) Finance leases: The lower of the fair value of the assets and present value of the minimum lease rentals is capitalized as fixed assets with corresponding amount shown as lease liability. The principal component in the lease rental is adjusted against the lease liability and the interest component is charged to Profit and Loss account.

c) All assets given on finance lease are shown as receivables at an amount equal to net investment in the lease. Initial direct costs in respect of lease are expensed in the year in which such costs are incurred.

H. Earnings per Share

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes, if any) by the weighted average number of equity shares outstanding during the period. Partly paid equity shares are treated as a fraction of an equity share to the extent that they were entitled to participate in dividends relative to a fully paid equity share during the reporting period. For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

I. Impairment of Assets:

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the Profit and Loss Account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

J. Valuation of Inventories

Finished goods, Stores, spares, process chemicals, packing materials and fuel are valued at the lower of cost and net realizable value. Cost is assigned on FIFO basis. Obsolete, defective and unserviceable stocks are provided for.

K. Borrowing Cost:

Borrowing costs attributable to acquisition and reconstruction of assets are capitalized as a part of the cost of such asset up to the date when such asset is ready for its intended use. Other borrowing costs are charged to Profit and Loss Account.

L. Retirement and other Benefits

Contributions to the Provident Funds are made in accordance with the rules of the funds.

Liability in respect of gratuity is provided for on the basis of valuation, as worked out at the year end by the Company according to provisions of the Payment of Gratuity Act, 1972.

Liability in respect of Leave encashment is provided on the basis of valuation, as worked out according to company policy

M. Foreign Currency Transactions

a. Transactions in foreign currency are recorded at the rate of exchange prevailing at the date of transaction.

b. Liabilities and assets in foreign currency outstanding as at the year end other than for financing fixed assets are converted at the rate prevailing at the year end and difference, if any, is adjusted in the profit and loss account.

N. Research and Development Expenses

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

O. Accounting for Taxes on Income

Current tax is determined as the amount of tax payable in respect of taxable income for the period. Deferred tax is recognized, for all timing differences, subject to the consideration of prudence applying the tax rates that have been substantively enacted by the balance sheet date. Deferred tax assets has been recognized on carry forward losses of earlier years , for which relief has been granted by BIFR order .However an application has been submitted to the CBDT for their approval.

P. Provisions, Contingent Liabilities and Contingent Assets

I. 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 outflow of resources.

II. Contingent Liabilities (excluding those, liability whereof is not ascertainable) are not recognized but are disclosed in the notes forming part of accounts.

III. Contingent Assets are neither recognized nor disclosed in the financial statements.

Q. Segment Reporting Policies

Primary segment is identified based on the nature of products and services. Secondary segment is identified based on geography in which major operating division of the company operate.

For primary segment, the segment revenue, segment expenses, segment assets and segment liabilities have been identified to segment on the basis of their relationship to the operating activities of the segment. Revenue, expenses, assets and liabilities which relate to the group as a whole and are not allocable to segment on reasonable basis, have been included under 'Unallocated revenue/expenses/assets/liabilities"

R. Cash and Cash equivalents

Cash and cash equivalents in the balance sheet comprise cash at bank and in hand and short?term investments with an original maturity of three months or less.

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Mar 31, 2014

A. General

Accounts are prepared under the historical cost basis in accordance with Generally Accepted Accounting Principles (GAAP), accounting standards issued by the Institute of Chartered Accountants of India and the relevant provisions of the Companies Act 1956. All Income and expenditure having material bearing are recognized on accrual basis, except where otherwise stated.

B. Use of estimates

The presentation of financial statements is in conformity with generally accepted accounting principles and it requires management to make estimates and assumptions that affects the reported amounts of assets and liabilities, and the disclosure of contingent liabilities on the date of financial statements. Actual results could differ from those estimates. Any revision to accounting estimates is recognized prospectively in current and future periods.

C. Fixed Assets

Fixed assets are stated at cost which is inclusive of freight, duties, taxes and all other incidental expenses related thereto. The diminution, if any, in the book value of these assets is provided for in the year of such determination of diminution.

D. Depreciation / Amortization

I) Depreciation / amortization on the original cost of fixed assets is provided as under :

a) Leasehold land premium is being amortized from the commencement of commercial production over the remaining period of the lease.

b) In respect of other items of fixed assets, depreciation is provided on straight line method at the rates and in the manner as specified in Schedule XIV to the Companies Act, 1956.

c) Depreciation / amortization on the incremental amount added to the cost of fixed assets on the revaluation is provided on the basis of the estimated useful life.

d) No depreciation is being provided wherein the written down value of individual asset has attained 95% of its actual cost.

E. Revenue:

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.

Sale of Goods

Revenue is recognized when the significant risks and rewards of ownership of the goods have passed to the buyer.

Interest

Revenue is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

Expenditure

Expenses are accounted on accrual basis and the provisions are made for all known liabilities.

F. Investments:

Current investments are carried at lower of cost and quoted/fair value, computed category wise. Long Term Investments are stated at cost. Provision for diminution in the value of long- term investments is made only if such a decline is other than temporary.

G. Leased Assets:

a) Operating Leases: Rentals are expensed with reference to lease terms and other considerations.

b) Finance leases: The lower of the fair value of the assets and present value of the minimum lease rentals is capitalized as fixed assets with corresponding amount shown as lease liability. The principal component in the lease rental is adjusted against the lease liability and the interest component is charged to Profit and Loss account.

c) All assets given on finance lease are shown as receivables at an amount equal to net investment in the lease. Initial direct costs in respect of lease are expensed in the year in which such costs are incurred.

H. Earnings per Share

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes, if any) by the weighted average number of equity shares outstanding during the period. Partly paid equity shares are treated as a fraction of an equity share to the extent that they were entitled to participate in dividends relative to a fully paid equity share during the reporting period. For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

I. Impairment of Assets:

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the Profit and Loss Account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

J. Valuation of Inventories

Finished goods, Stores, spares, process chemicals, packing materials and fuel are valued at the lower of cost and net realizable value. Cost is assigned on FIFO basis. Obsolete, defective and unserviceable stocks are provided for.

K. Borrowing Cost:

Borrowing costs attributable to acquisition and reconstruction of assets are capitalized as a part of the cost of such asset up to the date when such asset is ready for its intended use. Other borrowing costs are charged to Profit and Loss Account.

L. Retirement and other Benefits

Contributions to the Provident Funds are made in accordance with the rules of the funds.

Liability in respect of gratuity is provided for on the basis of valuation, as worked out at the year end by the Company according to provisions of the Payment of Gratuity Act, 1972.

Liability in respect of Leave encashment is provided on the basis of valuation, as worked out according to company policy

M. Foreign Currency Transactions

a. Transactions in foreign currency are recorded at the rate of exchange prevailing at the date of transaction.

b. Liabilities and assets in foreign currency outstanding as at the year end other than for financing fixed assets are converted at the rate prevailing at the year end and difference, if any, is adjusted in the profit and loss account.

N. Research and Development Expenses

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

O. Accounting for Taxes on Income

Current tax is determined as the amount of tax payable in respect of taxable income for the period. Deferred tax is recognized, for all timing differences, subject to the consideration of prudence applying the tax rates that have been substantively enacted by the balance sheet date. Deferred tax assets has been recognized on carry forward losses of earlier years, for which relief has been granted by BIFR order .However an application has been submitted to the CBDT for their approval.

P. Provisions, Contingent Liabilities and Contingent Assets

I. 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 outflow of resources.

II. Contingent Liabilities (excluding those, liability whereof is not ascertainable) are not recognized but are disclosed in the notes forming part of accounts.

III. Contingent Assets are neither recognized nor disclosed in the financial statements.

Q. Segment Reporting Policies

Primary segment is identified based on the nature of products and services. Secondary segment is identified based on geography in which major operating division of the company operate.

For primary segment, the segment revenue, segment expenses, segment assets and segment liabilities have been identified to segment on the basis of their relationship to the operating activities of the segment. Revenue, expenses, assets and liabilities which relate to the group as a whole and are not allocable to segment on reasonable basis, have been included under ''Unallocated revenue/expenses/assets/liabilities"

R. Cash and Cash equivalents

Cash and cash equivalents in the balance sheet comprise cash at bank and in hand and short term investments with an original maturity of three months or less.

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Mar 31, 2013

A. General

Accounts are prepared under the historical cost basis in accordance with Generally Accepted Accounting Principles (GAAP), accounting standards issued by the Institute of Chartered Accountants of India and the relevant provisions of the Companies Act 1956. All Income and expenditure having material bearing are recognized on accrual basis, except where otherwise stated.

B. Use of estimates

The presentation of financial statements is in conformity with generally accepted accounting principles and it requires management to make estimates and assumptions that affects the reported amounts of assets and liabilities, and the disclosure of contingent liabilities on the date of financial statements. Actual results could differ from those estimates. Any revision to accounting estimates is recognized prospectively in current and future periods.

C. Fixed Assets

Fixed assets are stated at cost which is inclusive of freight, duties, taxes and all other incidental expenses related thereto. The diminution, if any, in the book value of these assets is provided for in the year of such determination of diminution.

D. Depreciation / Amortization

I) Depreciation / amortization on the original cost of fixed assets is provided as under :

a) Leasehold land premium is being amortized from the commencement of commercial production over the remaining period of the lease.

b) In respect of other items of fixed assets, depreciation is provided on straight line method at the rates and in the manner as specified in Schedule XIV to the Companies Act, 1956.

c) Depreciation / amortization on the incremental amount added to the cost of fixed assets on the revaluation is provided on the basis of the estimated useful life.

E. Revenue:

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.

Sale of Goods:

Revenue is recognized when the significant risks and rewards of ownership of the goods have passed to the buyer.

Interest:

Revenue is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

Expenditure:

Expenses are accounted on accrual basis and the provisions are made for all known liabilities.

F. Investments:

Current investments are carried at lower of cost and quoted/fair value, computed category wise. Long Term Investments are stated at cost. Provision for diminution in the value of long-term investments is made only if such a decline is other than temporary.

G. Leased Assets:

a) Operating Leases: Rentals are expensed with reference to lease terms and other considerations.

b) Finance leases: The lower of the fair value of the assets and present value of the minimum lease rentals is capitalized as fixed assets with corresponding amount shown as lease liability. The principal component in the lease rental is adjusted against the lease liability and the interest component is charged to Profit and Loss account.

c) All assets given on finance lease are shown as receivables at an amount equal to net investment in the lease. Initial direct costs in respect of lease are expensed in the year in which such costs are incurred.

H. Earnings per Share

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes, if any) by the weighted average number of equity shares outstanding during the period. Partly paid equity shares are treated as a fraction of an equity share to the extent that they were entitled to participate in dividends relative to a fully paid equity share during the reporting period. For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

I. Impairment of Assets:

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the Profit and Loss Account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

J. Valuation of Inventories

Finished goods, Stores, spares, process chemicals, packing materials and fuel are valued at the lower of cost and net realizable value. Cost is assigned on FIFO basis. Obsolete, defective and unserviceable stocks are provided for.

K. Borrowing Cost:

Borrowing costs attributable to acquisition and reconstruction of assets are capitalized as a part of the cost of such asset up to the date when such asset is ready for its intended use. Other borrowing costs are charged to Profit and Loss Account.

L. Retirement and other Benefits

Contributions to the Provident Funds are made in accordance with the rules of the funds.

Liability in respect of gratuity is provided for on the basis of valuation, as worked out at the year end by the Company according to provisions of the Payment of Gratuity Act, 1972.

Liability in respect of Leave encashment is provided on the basis of valuation, as worked out according to company policy

M. Foreign Currency Transactions

a. Transactions in foreign currency are recorded at the rate of exchange prevailing at the date of transaction.

b. Liabilities and assets in foreign currency outstanding as at the year end other than for financing fixed assets are converted at the rate prevailing at the year end and difference, if any, is adjusted in the profit and loss account.

N. Research and Development Expenses

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

O. Accounting for Taxes on Income

Current tax is determined as the amount of tax payable in respect of taxable income for the period. Deferred tax is recognized, for all timing differences, subject to the consideration of prudence applying the tax rates that have been substantively enacted by the balance sheet date. Deferred tax assets has been recognized on carry forward losses of earlier years , for which relief has been granted by BIFR order .However an application has been submitted to the CBDT for their approval.

P. Provisions, Contingent Liabilities and Contingent Assets

I. 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 outflow of resources.

II. Contingent Liabilities (excluding those, liability whereof is not ascertainable) are not recognized but are disclosed in the notes forming part of accounts.

III. Contingent Assets are neither recognized nor disclosed in the financial statements.

Q. Segment Reporting Policies

Primary segment is identified based on the nature of products and services. Secondary segment is identified based on geography in which major operating division of the company operate.

For primary segment, the segment revenue, segment expenses, segment assets and segment liabilities have been identified to segment on the basis of their relationship to the operating activities of the segment. Revenue, expenses, assets and liabilities which relate to the group as a whole and are not allocable to segment on reasonable basis, have been included under "Unallocated revenue/expenses/assets/liabilities"

R. Cash and Cash equivalents

Cash and cash equivalents in the balance sheet comprise cash at bank and in hand and short-term investments with an original maturity of three months or less.

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Mar 31, 2012

A. General

Accounts are prepared under the historical cost basis in accordance with Generally Accepted Accounting Principles (GAAP), accounting standards issued by the Institute of Chartered Accountants of India and the relevant provisions of the Companies Act 1956. All Income and expenditure having material bearing are recognized on accrual basis, except where otherwise stated.

B. Use of estimates

The presentation of financial statements is in conformity with generally accepted accounting principles and it requires management to make estimates and assumptions that affects the reported amounts of assets and liabilities, and the disclosure of contingent liabilities on the date of financial statements. Actual results could differ from those estimates. Any revision to accounting estimates is recognized prospectively in current and future periods.

C. Fixed Assets

Fixed assets are stated at cost which is inclusive of freight, duties, taxes and all other incidental expenses related thereto. The diminution, if any, in the book value of these assets is provided for in the year of such determination of diminution.

D. Depreciation / Amortization

I) Depreciation / amortization on the original cost of fixed assets is provided as under:

a) Leasehold land premium is being amortized from the commencement of commercial production over the remaining period of the lease.

b) In respect of other items of fixed assets, depreciation is provided on straight line method at the rates and in the manner as specified in Schedule XIV to the Companies Act, 1956.

c) Depreciation / amortization on the incremental amount added to the cost of fixed assets on the revaluation is provided on the basis of the estimated useful life.

E. Revenue:

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.

Sale of Goods

Revenue is recognized when the significant risks and rewards of ownership of the goods have passed to the buyer.

Interest

Revenue is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

Expenditure:

Expenses are accounted on accrual basis and the provisions are made for all known liabilities.

F. Investments:

Current investments are carried at lower of cost and quoted/fair value, computed category wise. Long Term Investments are stated at cost. Provision for diminution in the value of long-term investments is made only if such a decline is other than temporary.

G. Leased Assets:

a) Operating Leases: Rentals are expensed with reference to lease terms and other considerations.

b) Finance leases: The lower of the fair value of the assets and present value of the minimum lease rentals is capitalized as fixed assets with corresponding amount shown as lease liability. The principal component in the lease rental is adjusted against the lease liability and the interest component is charged to Profit and Loss account.

c) All assets given on finance lease are shown as receivables at an amount equal to net investment in the lease. Initial direct costs in respect of lease are expensed in the year in which such costs are incurred.

H. Earnings Per Share

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes, if any) by the weighted average number of equity shares outstanding during the period. Partly paid equity shares are treated as a fraction of an equity share to the extent that they were entitled to participate in dividends relative to a fully paid equity share during the reporting period. For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

I. Impairment of Assets:

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the Profit and Loss Account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

J. Valuation of Inventories

Finished goods, Stores, spares, process chemicals, packing materials and fuel are valued at the lower of cost and net realizable value. Cost is assigned on FIFO basis. Obsolete, defective and unserviceable stocks are provided for.

K. Borrowing Cost:

Borrowing costs attributable to acquisition and reconstruction of assets are capitalized as a part of the cost of such asset up to the date when such asset is ready for its intended use. Other borrowing costs are charged to Profit and Loss Account.

L. Retirement and other Benefits

Contributions to the Provident Funds are made in accordance with the rules of the funds.

Liability in respect of gratuity is provided for on the basis of valuation, as worked out at the year end by the Company according to provisions of the Payment of Gratuity Act, 1972.

Liability in respect of Leave encashment is provided on the basis of valuation, as worked out according to company policy

M. Foreign Currency Transactions

a. Transactions in foreign currency are recorded at the rate of exchange prevailing at the date of transaction.

b. Liabilities and assets in foreign currency outstanding as at the year end other than for financing fixed assets are converted at the rate prevailing at the year end and difference, if any, is adjusted in the profit and loss account.

N. Research and Development Expenses

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

O. Accounting for Taxes on Income

Current tax is determined as the amount of tax payable in respect of taxable income for the period. Deferred tax is recognized, for all timing differences, subject to the consideration of prudence applying the tax rates that have been substantively enacted by the balance sheet date. Deferred tax assets has been recognized on carry forward losses of earlier years, for which relief has been granted by BIFR order. However an application has been submitted to the CBDT for their approval.

P. Provisions, Contingent Liabilities and Contingent Assets

I. 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 outflow of resources.

II. Contingent Liabilities (excluding those, liability whereof is not ascertainable) are not recognized but are disclosed in the notes forming part of accounts.

III. Contingent Assets are neither recognized nor disclosed in the financial statements.

Q. Segment Reporting Policies

Primary segment is identified based on the nature of products and services. Secondary segment is identified based on geography in which major operating division of the company operate.

For primary segment, the segment revenue, segment expenses, segment assets and segment liabilities have been identified to segment on the basis of their relationship to the operating activities of the segment. Revenue, expenses, assets and liabilities which relate to the group as a whole and are not allocable to segment on reasonable basis, have been included under 'Unallocated revenue/expenses/assets/liabilities"

R. Cash and Cash equivalents

Cash and cash equivalents in the balance sheet comprise cash at bank and in hand and short term investments with an original maturity of three months or less.

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Mar 31, 2011

A. General Accounts are prepared under the historical cost basis in accordance with Generally Accepted Accounting Principles (GAAP), accounting standards issued by the Institute of Chartered Accountants of India and the relevant provisions of the Companies Act 1956. All Income and expenditure having material bearing are recognized on accrual basis, except where otherwise stated.

B. Use of estimates

The presentation of financial statements is in conformity with generally accepted accounting principles and it requires management to make estimates and assumptions that affects the reported amounts of assets and liabilities, and the disclosure of contingent liabilities on the date of financial statements. Actual results could differ from those estimates. Any revision to accounting estimates is recognized prospectively in current and future periods.

C. Fixed Assets

Fixed assets are stated at cost which is inclusive of freight, duties, taxes and all other incidental expenses related thereto. The diminution, if any, in the book value of these assets is provided for in the year of such determination of diminution.

D. Depreciation / Amortization

I) Depreciation / amortization on the original cost of fixed assets is provided as under:

a) Leasehold land premium is being amortized from the commencement of commercial production over the remaining period of the lease.

b) In respect of other items of fixed assets, depreciation is provided on straight line method at the rates and in the manner as specified in Schedule XIV to the Companies Act, 1956.

II) Depreciation / amortization on the incremental amount added to the cost of fixed assets on the revaluation is provided on the basis of the estimated useful life.

E. Valuation of Inventories

Finished goods, Stores, spares, process chemicals, packing materials and fuel are valued at the lower of cost and net realizable value. Cost is assigned on FIFO basis. Obsolete, defective and unserviceable stocks are provided for.

F. Borrowing Cost:

Borrowing costs attributable to acquisition and reconstruction of assets are capitalized as a part of the cost of such asset up to the date when such asset is ready for its intended use. Other borrowing costs are charged to Profit and Loss Account.

G. Retirement and other Benefits

Contributions to the Provident Funds are made in accordance with the rules of the funds. Liability in respect of gratuity is provided for on the basis of valuation, as worked out at the year end by the Company according to provisions of the Payment of Gratuity Act, 1972. Liability in respect of Leave encashment is provided on the basis of valuation, as worked out according to company policy

H. Foreign Currency Transactions

I. Transactions in foreign currency are recorded at the rate of exchange prevailing at the date of transaction.

II. Liabilities and assets in foreign currency outstanding as at the year end other than for financing fixed assets are converted at the rate prevailing at the year end and difference, if any, is adjusted in the profit and loss account.

I. Research and Development Expenses

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

J. Accounting for Taxes on Income

Current tax is determined as the amount of tax payable in respect of taxable income for the period. Deferred tax is recognized, for all timing differences, subject to the consideration of prudence applying the tax rates that have been substantively enacted by the balance sheet date. Deferred tax assets has been recognized on carry forward losses of earlier years, for which relief has been granted by BIFR order .However an application has been submitted to the CBDT for their approval.

K. Provisions, Contingent Liabilities and Contingent Assets

I. 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 outflow of resources.

II. Contingent Liabilities (excluding those, liability whereof is not ascertainable) are not recognized but are disclosed in the notes forming part of accounts.

III. Contingent Assets are neither recognized nor disclosed in the financial statements.

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Mar 31, 2010

A. General

Accounts are prepared under the historical cost basis in accordance with Generally Accepted Accounting Principles (GAAP), accounting standards issued by the Institute of Chartered Accountants of India and the relevant provisions of the Companies Act 1956. All Income and expenditure having material bearing are recognized on accrual basis, except where otherwise stated.

B. Use of estimates

The presentation of financial statements is in conformity with generally accepted accounting principles and it requires management to make estimates and assumptions that affects the reported amounts of assets and liabilities, and the disclosure of contingent liabilities on the date of financial statements. Actual results could differ from those estimates. Any revision to accounting estimates is recognized prospectively in current and future periods.

C. Fixed Assets

Fixed assets are stated at cost which is inclusive of freight, duties, taxes and all other incidental expenses related thereto. The diminution, if any, in the book value of these assets is provided for in the year of such determination of diminution.

D. Depreciation/Amortization

I) Depreciation / amortization on the original cost of fixed assets is provided as under:

a) Leasehold land premium is being amortized from the commencement of commercial production over the remaining period of the lease.

b) In respect of other items of fixed assets, depreciation is provided on straight line method at the rates and in the manner as specified in Schedule XIV to the Companies Act, 1956.

II) Depreciation / amortization on the incremental amount added to the cost of fixed assets on the revaluation is provided on the basis of the estimated useful life.

E. Valuation of Inventories

Finished goods, Stores, spares, process chemicals, packing materials and fuel are valued at the lower of cost and net realizable value. Cost is assigned on FIFO basis. Obsolete, defective and unserviceable stocks are provided for.

F. Borrowing Cost:

Borrowing costs attributable to acquisition and reconstruction of assets are capitalized as a part of the cost of such asset up to the date when such asset is ready for its intended use. Other borrowing costs are charged to Profit and Loss Account.

G. Retirement and other Benefits

Since most of the employees of the company are on contractual basis, the management of the company is of the opinion that there will not be any liability for retirement benefits of Gratuity and leave encashment of these employees, and if any such liability is there in future, it will be provided at that time.

H. Foreign Currency Transactions

I. Transactions in foreign currency are recorded at the rate of exchange prevailing at the date of transaction.

II. Liabilities and assets in foreign currency outstanding as at the year end other than for • financing fixed assets are converted at the rate prevailing at the year end and difference, if any, is adjusted in the profit and loss account.

1. Research and Development Expenses

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

J. Accounting for Taxes on Income

Provision for Current Tax is based on the estimated taxable income computed in accordance with the Income Tax Act, 1961.

K. Provisions, Contingent Liabilities and Contingent Assets

I. 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 outflow of resources.

II. Contingent Liabilities (excluding those, liability whereof is not ascertainable) are not recognized but are disclosed in the notes forming part of accounts.

III. Contingent Assets are neither recognized nor disclosed in the financial statements.