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Accounting Policies of Mangalore Refinery And Petrochemicals Ltd. Company

Mar 31, 2015

1 Accounting Conventions and Basis of Presentation / Accounting

1.1 The financial statements are prepared under the historical cost convention, in accordance with the Generally Accepted Accounting Principles (GAAP), the provisions of the Companies Act, 2013 including the Accounting Standards specified under Section 133 of the Act , read with Rule 7 of the Companies (Accounts) Rules,2014.

1.2 All income and expenses to the extent considered receivable / payable with reasonable certainty are accounted for on accrual basis.

2 Use of Estimates

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

3 Cash Flow Statement

Cash Flow Statement has been prepared under Indirect Method as set out in the Accounting Standard - 3 specified in Section 133 of the Companies Act,2013 read with Rule 7 of the Companies (Accounts) Rules, 2014 and as required by the Securities and Exchange Board of India.

4 Fixed Assets

4.1 Land is stated at historical cost less amortisation wherever applicable.

4.2 Other Fixed assets are stated at historical cost less accumulated depreciation/ amortisation and impairment.

4.3 Spares received along with the Plant or Equipment and those purchased subsequently for specific machinery and having irregular use are capitalised.

4.4 During the period of construction, directly identifiable expenses are capitalised at the first instance and all other allocable expenses are capitalised proportionately on the basis of the value of the assets.

4.5 Cost for this purpose includes purchase prices, taxes and duties (net of cenvat), incidental expenses, erection / commissioning expenses, technical knowhow fee, professional fee, interest upto the date the asset is put to use and exchange rate differences arising on long term foreign currency monetary items in so far as they relate to the acquisition of depreciable assets etc.

5 Impairment

Impairment of cash generating units / assets is ascertained and considered where the carrying cost exceeds the recoverable amount being the higher of net realisable amount and value in use.

6 Depreciation / Amortisation

6.1 Depreciation on Fixed Assets (including those taken on lease) is provided on Straight Line Method, at the rates and in the manner specified in Schedule II to the Companies Act, 2013.

6.2 Cost of leasehold land is amortised over the lease period. Cost of leasehold lands where the transfer of ownership to the company on expiry of the lease period is eventually certain are not amortised.

6.3 Depreciation on amounts capitalised on account of foreign exchange fluctuation is provided prospectively over residual life of the assets.

6.4 Depreciation on spares, having irregular use and purchased subsequent to the installation of specific machinery is provided prospectively over residual life of the specific machinery and written down value of the spare is charged to statement of Profit and Loss as and when replaced.

7 Intangible Assets

Cost incurred on intangible asset, resulting in future economic benefits are capitalised as intangible assets and amortised on equated basis over the estimated useful life of such assets.

8 Investments

8.1 Long term investments are valued at cost. Provision is made in the accounts for any diminution, other than temporary in nature.

8.2 Current Investments are valued at lower of cost and fair value.

9 Inventories

Inventories are valued at lower of cost or net realisable value. Cost of inventories comprises of purchase cost and other costs incurred in bringing inventories to their present location and condition. The cost has been determined as under:

9.1 Raw material - on First in First out (FIFO) basis.

9.2 Finished Products - at Raw material ,Conversion cost

and excise duty.

9.3 Stock-in-Process - at Raw material and

Proportionate Conversion cost.

9.4 Stores, Spares and

other trading Goods - on weighted average cost basis

10 Revenue Recognition

10.1 Sales are recognised on transfer of custody of goods to customers and includes all statutory levies except Value Added Tax (VAT) and is net of discounts.

10.2 Dividend income is recognised when the right to receive the dividend is established.

10.3 Interest income is recognised on a time proportion basis

10.4 Revenue from sale of scrap are recognised on transfer of custody of goods to customers.

10.5 Revenue in respect of Liquidated Damages from contractors/ suppliers is recognised when determined as not payable.

10.6 Excise duty recovery from customer is deducted from Turnover (gross). Excise duty differential between closing and opening stock of excisable goods is included under other expenses.

11 Claims

11.1 Claims/Surrenders on/to Petroleum Planning and Analysis Cell, Government of India are booked on ''in principle acceptance'' thereof on the basis of

available instructions/clarifications subject to final adjustments, as stipulated.

11.2 Insurance Claims

11.2.1 In case of total loss of asset, on intimation to the insurer, either the carrying cost of the asset or insurance value (subject to deductible excess) whichever is lower is treated as claims recoverable from insurance company. In case insurance claim is less than the carrying cost of the asset, the difference is charged to statement of Profit and Loss .

11.2.2 In case of partial or other losses, expenditure incurred / payments made to put such assets back into use, to meet the third party or other liabilities (Less deductible excess) if any, are accounted for as claims receivable from insurance company. Insurance Policy deductible excess are expensed in the year of corresponding expenditure is incurred''

11.2.3 As and when claims are finally received from the insurance company, the difference, if any, between the claim receivable from insurance company and claims received is adjusted to statement of Profit and Loss

11.3 All other claims and provisions are booked on the merits of each case.

12 Foreign Currency Transactions

12.1 Foreign Currency Transactions are accounted for at the exchange rates prevailing on the date of the transactions.

12.2 The foreign currency assets / liabilities of monetary items are translated using the exchange rates prevailing on the reporting date.

12.3 The exchange differences on translation of foreign currency transacations on the reporting date are recognised as income or expense and adjusted to the statement of profit and loss except exchange differences arising on reporting of long term foreign currency monetary items in so far as they relate to the acquisition of depreciable capital assets are added to /or deducted from cost of the assets.

12.4 The mark to market losses (net) in respect of un- expired forward contracts entered into to hedge the risk of changes in foreign currency exchange rates on future export sales against the existing contract are recognised in the statement of profit and loss .

13 Employee Benefits

13.1 All short term employee benefits are recognised at their undiscounted amount in the accounting period in which they are incurred. Employee Benefits under defined contribution plans comprising provident fund and superannuation fund are recognised on the undiscounted obligations of the company to contribute to the plan. The same is paid to Provident Fund Trust authorities and to Life Insurance Corporation of India respectively, which are expensed during the year

13.2 Employee benefits under defined benefit plans comprising of Gratuity, leave encashment, long

service emblem, post retirement medical benefits and other long term retirement benefits are recognised based on the present value of defined benefit obligation, which is computed on the basis of actuarial valuation using the Projected Unit Credit Method. Actuarial liability in excess of respective plan assets in respect of gratuity is recognised during the year.

13.3 Actuarial gains and losses are recognised in the statement of Profit and Loss as income or expenses.

13.4 Undiscounted amount of short-term liability on account of un-availed leave is determined and provided for at the year end.

13.5 Provision for Gratuity as per actuarial valuation is funded with a separate trust.

14 Leases

14.1 Lease rentals in respect of finance lease are segregated into cost of assets and interest component by applying the implicit rate of return.

14.2 Assets acquired on lease where a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Lease rentals are charged to the statement of Profit and Loss on accrual basis.

15 Borrowing Costs

Borrowing costs that are attributable to acquisition, construction or production of qualifying assets, are capitalised as part of the cost of such assets. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for intended use. All other borrowing costs are charged to the statement of Profit and Loss.

16 Research and Development expenditure

Capital expenditure on Research and Development is capitalised under the respective fixed assets. Revenue expenditure thereon is charged to statement of Profit and Loss.

17 Taxes on Income

17.1 Current tax is determined on the basis of taxable income computed in accordance with the provisions of the Income Tax Act, 1961.

17.2 Deferred tax is recognised on timing differences between taxable and accounting income/expenditure that originates in one period and are capable of reversal in one or more subsequent period(s). Deferred Tax Asset is recognised on the basis of virtual/reasonable certainty about its realisability, as applicable.

17.3 The Carrying amount of Deferred tax assets are reviewed at each balance Sheet date.

18 Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities, if material, are disclosed by way of notes. Contingent Assets are neither recognised nor disclosed in the financial statements. .

Notes:

a The interest rate for ECB are based on 6 month LIBOR plus spread. Effective Interest rates are 3.2247%, 3.7019%, 2.7957%, 2.4157% and 2.8641% on Rs 6,250.50 Miilion, Rs 9,375.75 Million, Rs 18,751.50 Million, Rs 3,125.25 Million and Rs 3,125.25 Million respectively.

b The interest rate for OIDB term loan are 8.89 %,9.04%, 8.73%, 8.98%, 8.94%, 9.27%, 9.06% and 9.15% on Rs 1,825.00 Million, Rs 175.00 Million, Rs 937.50 Million, Rs 2,062.50 Million, Rs 87.90 Million, Rs 2,230.00 Million, Rs 399.60 Million and Rs 282.50 Million respectively.

c Deferred Payment liability representing Sales Tax deferment is with Nil Interest rate .

d The interest rate on Term loan from related Parties i.e ONGC is 10.90 % (SBAR minus 3.85%) on Rs 39,428.50 Million .

e Rs 11,569.39 Million - Secured and Unsecured (Previous year Rs 9,391.54 Million only unsecured) is repayable within one year and the same has been shown as "Current Maturities of Long Term Debts" under Note 10.

e Represents consideration for purchase of business (Nitrogen Plant) in excess of book value of net assets acquired.

f The Company capitalises the borrowing cost and Exchange differences in the capital work in Progress (CWIP) and the amount capitalised during the year ended 31st March, 2015 are Rs 1,686.27 Million (Previous year Rs 3,778.55 Million) and Rs 1,680.25 Million (Previous year Rs 1,710.35 Million) respectively. Borrowing cost and Exchange differences capitalised are disclosed in the " Additions/ adjustments during the year" column of different class of Assets. Asset-wise details of the same are included in the cost of Major heads of fixed Assets as given below:

a Above includes Rs 515.50 Million (Previous year Rs 733.78 Million) backed by Bank Guarantee. Trade Receivable stated above include debts due by:

Notes

a The deposits maintained by the company with banks can be withdrawn by the company at any point without prior notice or penalty on the principal.

b Includes Gold Coins valued Rs 0.94 Million (Previous year Rs 0.59 Million)

a Includes an amount of Nil (Previous Year 2,367.70 Million) as Inter Corporate Deposit to Public Sector Undertakings


Mar 31, 2014

1 Accounting Conventions and Basis of Presentation / Accounting

1.1 The financial statements are prepared under the historical cost convention, in accordance with the Generally Accepted Accounting Principles (GAAP), the provisions of the Companies Act, 1956 and the Accounting Standards issued under the Companies (Accounting Standards) Rules, 2006

1.2 All income and expenses to the extent considered receivable / payable with reasonable certainty are accounted for on accrual basis.

2 Use of Estimates

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

3 Cash Flow Statement

Cash Flow Statement has been prepared in accordance with the indirect method prescribed in Accounting Standard - 3 issued under the Companies (Accounting Standards) Rules, 2006 and as required by the Securities and Exchange Board of India.

4 Fixed Assets

4.1 Land is stated at historical cost less amortisation wherever applicable.

4.2 Other Fixed assets are stated at historical cost less accumulated depreciation/ amortisation and impairment.

4.3 Spares received along with the Plant or Equipment and those purchased subsequently for Specific machinery and having irregular use are capitalised.

4.4 During the period of construction, directly identifable expenses are capitalised at the frst instance and all other allocable expenses are capitalised proportionately on the basis of the value of the assets.

4.5 Cost for this purpose includes purchase prices, taxes and duties (net of cenvat), incidental expenses, erection / commissioning expenses, technical knowhow fee, professional fee, interest upto the date the asset is put to use and exchange rate differences arising on long term foreign currency monetary items in so far as they relate to the acquisition of depreciable assets etc.

5 Impairment

Impairment of cash generating units / assets is ascertained and considered where the carrying cost exceeds the recoverable amount being the higher of net realisable amount and value in use.

6 Depreciation / Amortisation

6.1 Depreciation on Fixed Assets (including those taken on lease) is provided on Straight Line Method, at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956.

6.2 Cost of leasehold land is amortised over the lease period. Cost of leasehold lands where the transfer of ownership to the company on expiry of the lease period is eventually certain are not amortised.

6.3 Depreciation on amounts capitalised on account of foreign exchange fuctuation is provided prospectively over residual life of the assets.

6.4 Depreciation on spares, having irregular use and purchased subsequent to the installation of Specific machinery is provided prospectively over residual life of the Specific machinery and written down value of the spare is charged to statement of profit and Loss as and when replaced.

7 Intangible Assets

Cost incurred on intangible asset, resulting in future economic benefits are capitalised as intangible assets and amortised on equated basis over the estimated useful life of such assets.

8 Investments

8.1 Long term investments are valued at cost. Provision is made in the accounts for any diminution, other than temporary in nature.

8.2 Current Investments are valued at lower of cost and fair value.

9 Inventories

Inventories are valued at lower of cost or net realisable value. Cost of inventories comprises of purchase cost and other costs incurred in bringing inventories to their present location and condition. The cost has been determined as under:

9.1 Raw material - on First in First out (FIFO) basis.

9.2 Finished Products - at Raw material ,Conversion cost and excise duty.

9.3 Stock-in-Process - at Raw material and Proportionate Conversion cost.

9.4 Stores, Spares and other trading Goods - on weighted average cost basis

10 Revenue Recognition

10.1 Sales are recognised on transfer of custody of goods to customers and includes all statutory levies except Value Added Tax (VAT) and is net of discounts.

10.2 Dividend income is recognised when the right to receive the dividend is established.

10.3 Interest income is recognised on a time proportion basis

10.4 Revenue from sale of scrap are recognised on transfer of custody of goods to customers.

10.5 Revenue in respect of Liquidated Damages from contractors/ suppliers is recognised when determined as not payable.

10.6 Excise duty recovery from customer is deducted from Turnover (gross). Excise duty differential between closing and opening stock of excisable goods is included under other expenses.

11 Claims

11.1 Claims/Surrenders on/to Petroleum Planning and Analysis Cell, Government of India are booked on ''in principle acceptance'' thereof on the basis of available instructions/clarifcations subject to final adjustments, as stipulated.

11.2 Insurance Claims

11.2.1 In case of total loss of asset, on intimation to the insurer, either the carrying cost of the asset or insurance value (subject to deductible excess) whichever is lower is treated as claims recoverable from insurance company. In case insurance claim is less than the carrying cost of the asset, the difference is charged to statement of profit and Loss .

11.2.2 In case of partial or other losses, expenditure incurred / payments made to put such assets back into use, to meet the third party or other liabilities (Less deductible excess) if any, are accounted for as claims receivable from insurance company. Insurance Policy deductible excess are expensed in the year of corresponding expenditure is incurred''

11.2.3 As and when claims are finally received from the insurance company, the difference, if any, between the claim receivable from insurance company and claims received is adjusted to statement of profit and Loss

11.3 All other claims and provisions are booked on the merits of each case.

12 Foreign Currency Transactions

12.1 Foreign Currency Transactions are accounted for at the exchange rates prevailing on the date of the transactions.

12.2 The foreign currency assets / liabilities of monetary items are translated using the exchange rates prevailing on the reporting date.

12.3 The exchange differences on translation of foreign currency transacations on the reporting date are recognised as income or expense and adjusted to the statement of profit and loss except exchange differences arising on reporting of long term foreign currency monetary items in so far as they relate to the acquisition of depreciable capital assets are added to /or deducted from cost of the assets.

12.4 The mark to market losses (net) in respect of un-expired forward contracts entered into to hedge the risk of changes in foreign currency exchange rates on future export sales against the existing contract are recognised in the statement of profit and loss .

13 Employee benefits

13.1 All short term employee benefits are recognised at their undiscounted amount in the accounting period in which they are incurred. Employee benefits under Defined contribution plans comprising provident fund and superannuation fund are recognised on the undiscounted obligations of the company to contribute to the plan. The same is paid to Provident Fund Trust authorities and to Life Insurance Corporation of India respectively, which are expensed during the year

13.2 Employee benefits under Defined benefit plans comprising of Gratuity, leave encashment, long service emblem, post retirement medical benefits and other long term retirement benefits are recognised based on the present value of Defined benefit obligation, which is computed on the basis of actuarial valuation using the Projected Unit Credit Method. Actuarial liability in excess of respective plan assets in respect of gratuity is recognised during the year.

13.3 Actuarial gains and losses are recognised in the statement of profit and Loss as income or expenses.

13.4 Undiscounted amount of short-term liability on account of un-availed leave is determined and provided for at the year end.

13.5 Provision for Gratuity as per actuarial valuation is funded with a separate trust.

14 Leases

14.1 Lease rentals in respect of finance lease are segregated into cost of assets and interest component by applying the implicit rate of return.

14.2 Assets acquired on lease where a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Lease rentals are charged to the statement of profit and Loss on accrual basis.

15 Borrowing Costs

Borrowing costs that are attributable to acquisition, construction or production of qualifying assets, are capitalised as part of the cost of such assets. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for intended use. All other borrowing costs are charged to the statement of profit and Loss.

16 Research and Development expenditure

Capital expenditure on Research and Development is capitalised under the respective fixed assets. Revenue expenditure thereon is charged to statement of profit and Loss.

17 Taxes on Income

17.1 Current tax is determined on the basis of taxable income computed in accordance with the provisions of the Income Tax Act, 1961.

17.2 Deferred tax is recognised on timing differences between taxable and accounting income/expenditure that originates in one period and are capable of reversal in one or more subsequent period(s). Deferred Tax Asset is recognised on the basis of virtual/reasonable certainty about its realisability, as applicable.

17.3 The Carrying amount of Deferred tax assets are reviewed at each balance Sheet date.

18 Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities, if material, are disclosed by way of notes. Contingent Assets are neither recognised nor disclosed in the financial statements. .

2.4 Shares held by holding or ultimate holding company or its subsidiaries or associates 1,255,354,097 Equity Shares (1,255,354,097 Equity Shares ) are held by ONGC Limited, the holding company.


Mar 31, 2013

1 Accounting Conventions and Basis of Presentation / Accounting

1.1 The fi nancial statements are prepared under the historical cost convention, in accordance with the Generally Accepted Accounting Principles (GAAP), the provisions of the Companies Act, 1956 and the Accounting Standards issued under the Companies (Accounting Standards) Rules, 2006

1.2 All income and expenses to the extent considered receivable / payable with reasonable certainty are accounted for on accrual basis.

2 Use of Estimates

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

3 Cash Flow Statement

Cash Flow Statement has been prepared in accordance with the indirect method prescribed in Accounting Standard - 3 issued under the Companies (Accounting Standards) Rules, 2006 and as required by the Securities and Exchange Board of India.

4 Fixed Assets

4.1 Land is stated at historical cost less amortisation wherever applicable.

4.2 Other Fixed assets are stated at historical cost less accumulated depreciation/ Amortisation and impairment.

4.3 Spares received along with the Plant or Equipment and those purchased subsequently for specifi c machinery and having irregular use are capitalised.

4.4 During the period of construction, directly identifi able expenses are capitalised at the fi rst instance and all other allocable expenses are capitalised proportionately on the basis of the value of the assets.

4.5 Cost for this purpose includes purchase prices, duties (net of cenvat), taxes, incidental expenses, erection / commissioning expenses, technical knowhow fee, professional fee, interest upto the date the asset is put to use and exchange rate differences arising on long term foreign currency monetary items in so far as they relate to the acquisition of depreciable assets etc.

5 Impairment

Impairment of cash generating units / assets is ascertained and considered where the carrying cost exceeds the recoverable amount being the higher of net realisable amount and value in use.

6 Depreciation / Amortisation

6.1 Depreciation on Fixed Assets (including those taken on lease) is provided on Straight Line Method, at the rates and in the manner specifi ed in Schedule XIV to the Companies Act, 1956.

6.2 Cost of leasehold land is amortised over the lease period. Cost of leasehold lands where the transfer of ownership to the company on expiry of the lease period is eventually certain are not amortised.

6.3 Depreciation on amounts capitalised on account of foreign exchange fl uctuation is provided prospectively over residual life of the assets.

6.4 Depreciation on spares, having irregular use and purchased subsequent to the installation of specifi c machinery is provided prospectively over residual life of the specifi c machinery and written down value of the spare is charged to Profi t and Loss Account as and when replaced.

7 Intangible Assets:

Cost incurred on intangible asset, resulting in future economic benefi ts are capitalised as intangible assets and amortised on equated basis over the estimated useful life of such assets.

8 Investments

8.1 Long term investments are valued at cost. Provision is made for any diminution, other than temporary in the accounts.

8.2 Current Investments are valued at lower of cost and fair value.

9 Inventories

Inventories are valued at lower of cost and net realisable value. Cost of inventories comprises of purchase cost and other costs incurred in bringing inventories to their present location and condition. The cost has been determined as under:

9.1 Raw material - on First in First out (FIFO) basis.

9.2 Finished Products - at Raw material ,Conversion cost and excise duty.

9.3 Stock-in-Process - at Raw material and Proportionate Conversion cost.

9.4 Stores, Spares and other trading Goods- on weighted average cost basis

10 Revenue Recognition

10.1 Sales are recognised on transfer of custody to customers and includes all statutory levies except Value Added Tax (VAT) and is net of discounts.

10.2 Dividend income is recognised when the right to receive the dividend is established.

10.3 Interest income is recognised on a time proportion basis

10.4 Revenue from sale of scrap are recognised on transfer of custody to customers.

10.5 Revenue in respect of Liquidated Damages from contractors/ suppliers is recognised when determined as not payable.

10.6 Excise duty recovery from customer is deducted from Turnover (gross). Excise duty differential between closing and opening stock of excisable goods is included under other expenses.

11 Claims

11.1 Claims/Surrenders on/to Petroleum Planning and Analysis Cell, Government of India are booked on ''in principle acceptance’ thereof on the basis of available instructions/clarifi cations subject to fi nal adjustments, as stipulated.

11.2 Insurance Claims

11.2.1 In case of total loss of asset, on intimation to the insurer, either the carrying cost of the asset or insurance value (subject to deductible excess) whichever is lower is treated as claims recoverable from insurance company. In case insurance claim is less than the carrying cost of the asset, the difference is charged to Profi t and Loss account.

11.2.2 In case of partial or other losses, expenditure incurred / payments made to put such assets back into use, to meet the third party or other liabilities (Less deductible excess) if any, are accounted for as claims receivable from insurance company. Insurance Policy Deductible Excess are expensed in the year the corresponding expenditure is incurred’.

11.2.3 As and when claims are fi nally received from the insurance company, the difference, if any, between the claim receivable from insurance company and claims received is adjusted to Profi t and Loss account

11.3 All other claims and provisions are booked on the merits of each case.

12 Foreign Currency Transactions

12.1 Foreign Currency Transactions are accounted for at the exchange rates prevailing on the date of the transactions.

12.2 The foreign currency assets / liabilities of monetary items are translated using the exchange rates prevailing on the reporting date.

12.3 The exchange differences on translation of foreign currency transacations on the reporting date are recognised as income or expense and adjusted to the profi t and loss account except exchange differences arising on reporting of long term foreign currency monetary items in so far as they relate to the acquisition of depreciable capital assets are added to /or deducted from cost of the assets.

12.4 The mark to market losses (net) in respect of un-expired forward contracts entered into to hedge the risk of changes in foreign currency exchange rates on future export sales against the existing contract are recognised in the profi t and loss account.

13 Employee Benefits

13.1 All short term employee benefi ts are recognised at their undiscounted amount in the accounting period in which they are incurred. Employee Benefi ts under defi ned contribution plans comprising provident fund and superannuation fund are recognised on the undiscounted obligations of the company to contribute to the plan. The same is paid to Provident Fund Trust authorities and to Life Insurance Corporation of India respectively, which are expensed during the year

13.2 Employee benefi ts under defi ned benefi t plans comprising of Gratuity, leave encashment, long service emblem, post retirement medical benefi ts and other long term retirement benefi ts are recognised based on the present value of defi ned benefi t obligation, which is computed on the basis of actuarial valuation using the Projected Unit Credit Method. Actuarial liability in excess of respective plan assets in respect of gratuity is recognised during the year.

13.3 Actuarial gains and losses are recognised in the Profi t and Loss account as income or expenses.

13.4 Undiscounted amount of short-term liability on account of un-availed leave is determined and provided for at the year end.

13.5 Provision for Gratuity as per actuarial valuation is funded with a separate trust.

14 Leases

14.1 Lease rentals in respect of fi nance lease are segregated into cost of assets and interest component by applying the implicit rate of return.

14.2 Assets acquired on lease where a signifi cant portion of the risks and rewards of ownership are retained by the lessor are classifi ed as operating leases. Lease rentals are charged to the Profi t and Loss Account on accrual basis.

15 Borrowing Costs

Borrowing costs that are attributable to acquisition, construction or production of qualifying assets, are capitalised as part of the cost of such assets. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for intended use. All other borrowing costs are charged to the Profi t and Loss Account.

16 Research and Development expenditure

Capital expenditure on Research and Development is capitalised under the respective fi xed assets. Revenue expenditure thereon is charged to Profi t and Loss account.

17 Taxes on Income

17.1 Current tax is determined on the basis of taxable income computed in accordance with the provisions of the Income Tax Act, 1961.

17.2 Deferred tax is recognised on timing differences between taxable and accounting income/expenditure that originates in one period and are capable of reversal in one or more subsequent period(s). Deferred Tax Asset is recognised on the basis of virtual/reasonable certainty about its realisability, as applicable.

17.3 The Carrying amount of Deferred tax assets are reviewed at each balance Sheet date.

18 Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outfl ow of resources. Contingent liabilities, if material, are disclosed by way of notes. Contingent Assets are neither recognised nor disclosed in the fi nancial statements. .


Mar 31, 2012

1 Accounting Conventions and Basis of Presentation / Accounting

1.1 The financial statements are prepared under the historical cost convention, in accordance with the Generally Accepted Accounting Principles (GAAP), the provisions of the Companies Act, 1956 and the Accounting Standards issued under the Companies (Accounting Standards) Rules, 2006

1.2 All income and expenses to the extent considered receivable / payable with reasonable certainty are accounted for on accrual basis.

2 Use of Estimates

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

3 Cash Flow Statement

Cash Flow Statement has been prepared in accordance with the indirect method prescribed in Accounting Standard - 3 issued under the Companies (Accounting Standards) Rules, 2006 and as required by the Securities and Exchange Board of India.

4 Fixed Assets

4.1 Land is stated at historical cost less amortisation wherever applicable.

4.2 Other Fixed assets are stated at historical cost less accumulated depreciation/ Amortisation and impairment.

4.3 Spares received along with the Plant or Equipment and those purchased subsequently for specific machinery and having irregular use are capitalised.

4.4 During the period of construction, directly identifiable expenses are capitalised at the first instance and all other allocable expenses are capitalised proportionately on the basis of the value of the assets.

4.5 Cost for this purpose includes purchase prices, duties (net of cenvat), taxes, incidental expenses, erection / commissioning expenses, technical knowhow fee, professional fee, interest upto the date the asset is put to use and exchange rate differences arising on long term foreign currency monetary items in so far as they relate to the acquisition of depreciable assets etc.

5 Impairment

Impairment of cash generating units / assets is ascertained and considered where the carrying cost exceeds the recoverable amount being the higher of net realisable amount and value in use.

6 Depreciation / Amortisation

6.1 Depreciation on Fixed Assets (including those taken on lease) is provided on Straight Line Method, at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956.

6.2 Cost of leasehold land is amortised over the lease period. Cost of leasehold lands where the transfer of ownership to the company on expiry of the lease period is eventually certain are not amortised.

6.3 Depreciation on amounts capitalised on account of foreign exchange fluctuation is provided prospectively over residual life of the assets.

6.4 Depreciation on spares, having irregular use and purchased subsequent to the installation of specific machinery is provided prospectively over residual life of the specific machinery and written down value of the spare is charged to Profit and Loss Account as and when replaced.

7 Intangible Assets:

Cost incurred on intangible asset, resulting in future economic benefits are capitalised as intangible assets and amortised on equated basis over the estimated useful life of such assets.

8 Investments

8.1 Long term investments are valued at cost. Provision is made for any diminution, other than temporary in the accounts.

8.2 Current Investments are valued at lower of cost and fair value.

9 Inventories

Inventories are valued at lower of cost and net realisable value. Cost of inventories comprises of purchase cost and other costs incurred in bringing inventories to their present location and condition. The cost has been determined as under:

9.1 Raw material - on First in First out (FIFO) basis.

9.2 Finished Products - at Raw material ,Conversion cost and excise duty.

9.3 Stock-in-Process - at Raw material and Proportionate Conversion cost.

9.4 Stores, Spares and other trading Goods - on weighted average cost basis

10 Revenue Recognition

10.1 Sales are recognised on transfer of custody to customers and includes all statutory levies except Value Added Tax (VAT) and is net of discounts.

10.2 Dividend income is recognised when the right to receive the dividend is established.

10.3 Interest income is recognised on a time proportion basis

10.4 Revenue from sale of scrap are recognised on transfer of custody to customers.

10.5 Revenue in respect of Liquidated Damages from contractors/ suppliers is recognised when determined as not payable.

10.6 Excise duty recovery from customer is deducted from Turnover (gross). Excise duty differential between closing and opening stock of excisable goods is included under other expenses.

11 Claims

11.1 Claims/Surrenders on/to Petroleum Planning and Analysis Cell, Government of India are booked on 'in principle acceptance' thereof on the basis of available instructions/clarifications subject to final adjustments, as stipulated.

11.2 Insurance Claims

11.2.1 In case of total loss of asset, on intimation to the insurer, either the carrying cost of the asset or insurance value (subject to deductible excess) whichever is lower is treated as claims recoverable from insurance company. In case insurance claim is less than the carrying cost of the asset, the difference is charged to Profit and Loss account.

11.2.2 In case of partial or other losses, expenditure incurred / payments made to put such assets back into use, to meet the third party or other liabilities (Less deductible excess) if any, are accounted for as claims receivable from insurance company. Insurance Policy Deductible Excess are expensed in the year the corresponding expenditure is incurred

11.2.3 As and when claims are finally received from the insurance company, the difference, if any, between the claim receivable from insurance company and claims received is adjusted to Profit and Loss account

11.3 All other claims and provisions are booked on the merits of each case.

12 Foreign Currency Transactions

12.1 Foreign Currency Transactions are accounted for at the exchange rates prevailing on the date of the transactions.

12.2 The foreign currency assets liabilities of monetary items are translated using the exchange rates prevailing on the reporting date.

12.3 The exchange differences on translation of foreign currency transactions on the reporting date are recognised as income or expense and adjusted to the profit and loss account except exchange differences arising on reporting of long term foreign currency monetary items in so far as they relate to the acquisition of depreciable capital assets are added to /or deducted from cost of the assets.

12.4 The mark to market losses (net) in respect of un-expired forward contracts entered into to hedge the risk of changes in foreign currency exchange rates on future export sales against the existing contract are recognised in the profit and loss account.

13 Employee Benefits

13.1 All short term employee benefits are recognised at their undiscounted amount in the accounting period in which they are incurred. Employee Benefits under defined contribution plans comprising provident fund and superannuation fund are recognised on the undiscounted obligations of the company to contribute to the plan. The same is paid to Provident Fund Trust authorities and to Life Insurance Corporation of India respectively, which are expensed during the year

13.2 Employee benefits under defined benefit plans comprising of Gratuity, leave encashment, long service emblem, post retirement medical benefits and other long term retirement benefits are recognised based on the present value of defined benefit obligation, which is computed on the basis of actuarial valuation using the Projected Unit Credit Method. Actuarial liability in excess of respective plan assets in respect of gratuity is recognised during the year.

13.3 Actuarial gains and losses are recognised in the Profit and Loss account as income or expenses.

13.4 Undiscounted amount of short-term liability on account of un-availed leave is determined and provided for at the year end.

13.5 Provision for Gratuity as per actuarial valuation is funded with a separate trust.

14 Leases

14.1 Lease rentals in respect of finance lease are segregated into cost of assets and interest component by applying the implicit rate of return.

14.2 Assets acquired on lease where a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Lease rentals are charged to the Profit and Loss Account on accrual basis.

15 Borrowing Costs

Borrowing costs that are attributable to acquisition, construction or production of qualifying assets, are capitalised as part of the cost of such assets. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for intended use. All other borrowing costs are charged to the Profit and Loss Account.

16 Research and Development expenditure

Capital expenditure on Research and Development is capitalised under the respective fixed assets. Revenue expenditure thereon is charged to Profit and Loss account.

17 Taxes on Income

17.1 Current tax is determined on the basis of taxable income computed in accordance with the provisions of the Income Tax Act, 1961.

17.2 Deferred tax is recognised on timing differences between taxable and accounting income/expenditure that originates in one period and are capable of reversal in one or more subsequent period(s). Deferred Tax Asset is recognised on the basis of virtual/reasonable certainty about its realisability, as applicable.

18 Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities, if material, are disclosed by way of notes. Contingent Assets are neither recognised nor disclosed in the financial statements.


Mar 31, 2011

1. Accounting Conventions and Basis of Presentation / Accounting

1.1. The financial statements are prepared under the historical cost convention, in accordance with the Generally Accepted Accounting Principles (GAAP), the provisions of the Companies Act, 1956 and the Accounting Standards issued under the Companies (Accounting Standards) Rules, 2006.

1.2. All income and expenses to the extent considered receivable / payable with reasonable certainty are accounted for on accrual basis.

2. Use of Estimates

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

3. Cash Flow Statement

3.1. Cash Flow Statement has been prepared in accordance with the indirect method prescribed in Accounting Standard - 3 issued under the Companies (Accounting Standards) Rules, 2006 and as required by the Securities and Exchange Board of India.

4. Fixed Assets

4.1. Land is stated at historical cost less amortisation wherever applicable.

4.2. Other Fixed assets are stated at historical cost less accumulated depreciation/ Amortisation and impairment.

4.3. Spares received along with the Plant or Equipment and those purchased subsequently for specific machinery and having irregular use are capitalised.

4.4. During the period of construction, directly identifable expenses are capitalised at the first instance and all other allocable expenses are capitalised proportionately on the basis of the value of the assets.

4.5. Historical Cost for this purpose includes purchase prices, duties (net of cenvat), taxes, incidental expenses, erection / commissioning expenses, technical knowhow fee, professional fee and interest etc., up to the date, the asset is put to use

5. Impairment

5.1. Impairment of cash generating units / assets is ascertained and considered where the carrying cost exceeds the recoverable amount being the higher of net realisable amount and value in use.

6. Depreciation / Amortisation

6.1. Depreciation on Fixed Assets (including those taken on lease) is provided on Straight Line Method, at the rates and in the manner specifed in Schedule XIV to the Companies Act, 1956.

6.2. Cost of leasehold land is amortised over the lease period. Cost of leasehold lands where the transfer of ownership to the Company on expiry of the lease period is eventually certain are not amortised.

6.3. Depreciation on amounts capitalised on account of foreign exchange fuctuation is provided prospectively over residual life of the assets.

6.4. Depreciation on spares, having irregular use and purchased subsequent to the installation of specific machinery is provided prospectively over residual life of the specific machinery and written down value of the spare is charged to Profit and Loss Account as and when replaced.

7. Intangible Assets:

7.1. Cost incurred on intangible asset, resulting in future economic benefits are capitalised as intangible assets and amortised on equated basis over the estimated useful life of such assets.

8. Investments

8.1. Long term investments are valued at cost. Provision is made for any diminution, other than temporary in the accounts.

8.2. Current Investments are valued at lower of cost and fair value.

9. Inventories

Inventories are valued at lower of cost and net realisable value. Cost of inventories comprises of purchase cost and other costs incurred in bringing inventories to their present location and condition. The cost has been determined as under:

9.1. Raw material - on First in First out (FIFO) basis.

9.2. Finished Products - at Raw material, Conversion cost and excise duty.

9.3. Stock-in-Process - at Raw material and Proportionate Conversion cost.

9.4. Stores, Spares and other trading Goods

- on weighted average cost basis

10. Revenue Recognition

10.1. Sales are recognised on transfer of custody to customers and includes all statutory levies except Value Added Tax (VAT) and is net of discounts.

10.2. Dividend income is recognised when the right to receive the dividend is established.

10.3. Interest income is recognised on a time proportion basis

11. Claims

11.1. Claims/Surrenders on/to Petroleum Planning and Analysis Cell, Government of India are booked on 'in principle acceptance' thereof on the basis of available instructions/clarifcations subject to final adjustments, as stipulated.

11.2. Insurance Claims

In case of total loss of asset, on intimation to the insurer, either the carrying cost of the asset or insurance value (subject to deductible excess) whichever is lower is treated as claims recoverable from insurance company. In case insurance claim is less than the carrying cost of the asset, the difference is charged to Profit and Loss Account.

In case of partial or other losses, expenditure incurred / payments made to put such assets back into use, to meet the third party or other liabilities (Less deductible excess) if any, are accounted for as claims receivable from insurance company. Insurance Policy Deductible Excess are expensed in the year the corresponding expenditure is incurred'

As and when claims are finally received from the insurance company, the difference, if any, between the claim receivable from insurance company and claims received is adjusted to Profit and Loss Account

11.3. All other claims and provisions are booked on the merits of each case.

12. Foreign Currency Transactions

12.1. Foreign Currency Transactions are accounted for at the exchange rates prevailing on the date of the transactions.

12.2. The foreign currency assets / liabilities of monetary items are translated using the exchange rates prevailing on the Balance Sheet date.

12.3. The exchange differences on settlement / translation are adjusted to the Profit and Loss Account. Wherever forward contracts are entered into, the exchange differences and premium / discount are dealt with in the Profit and Loss Account over the period of the contracts.

12.4. The mark to market losses (net) in respect of un-expired forward contracts entered into to hedge the risk of changes in foreign currency exchange rates on future export sales against the existing contract are recognised in the Profit and Loss Account.

13. Employee benefits

13.1. All short term employee benefits are recognised at their undiscounted amount in the accounting period in which they are incurred. Employee benefits under defined contribution plans comprising provident fund and superannuation fund are recognised on the undiscounted obligations of the Company to contribute to the plan. The same is paid to Provident Fund Trust authorities and to Life Insurance Corporation of India respectively, which are expensed during the year.

13.2. Employee benefits under defined beneft plans comprising of Gratuity, leave encashment, long service emblem, post retirement medical benefits and other retirement benefits are recognised based on the present value of defined beneft obligation, which is computed on the basis of actuarial valuation using the Projected Unit Credit Method. Actuarial liability in excess of respective plan assets is recognised during the year.

13.3. Actuarial gains and losses are recognised in the Profit and Loss Account as income or expenses.

13.4. Undiscounted amount of short-term liability on account of un-availed leave is determined and provided for as at the year end.

13.5. Provision for Gratuity as per actuarial valuation is funded with a separate trust.

14. Leases

14.1. Lease rentals in respect of fnance lease are segregated into cost of assets and interest component by applying the implicit rate of return.

14.2. Assets acquired on lease where a significant portion of the risks and rewards of ownership are retained by the lessor are classifed as operating leases. Lease rentals are charged to the Profit and Loss Account on accrual basis.

15. Borrowing Costs

15.1. Borrowing costs that are attributable to acquisition, construction or production of qualifying assets, are capitalised as part of the cost of such assets. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for intended use. All other borrowing costs are charged to the Profit and Loss Account.

16. Research and Development expenditure

16.1. Capital expenditure on Research and Development is capitalised under the respective fixed assets. Revenue expenditure thereon is charged to Profit and Loss Account.

17. Taxes on Income

17.1. Current tax is determined on the basis of taxable income computed in accordance with the provisions of the Income Tax Act, 1961.

17.2. Deferred tax is recognised on timing differences between taxable and accounting income/expenditure that originates in one period and are capable of reversal in one or more subsequent period(s). Deferred Tax Asset is recognised on the basis of virtual/reasonable certainty about its realisability, as applicable.

18. Provisions, Contingent Liabilities and Contingent Assets

18.1. Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outfow of resources. Contingent Assets are neither recognised nor disclosed in the financial statements. Contingent liabilities, if material, are disclosed by way of notes.




Mar 31, 2010

1. Accounting Conventlona and Baals df Pffeaentatlbn / Accounting

1.1. The financial statements are prepared under the historical cost convention, in accordance with the Generally Accepted Accounting Principles (GAAP), the provisions of the Companies Act, 1956 and the Accounting Standards issued under the Companies (Accounting Standards) Rules, 2006.

1.2. All income and expenses to the extent considered receivable / payable with reasonable certainty ate accounted for on accrual basis.

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

3. Cash Flow Statement Cash Flow Statement has been prepared in accordance with the indirect method prescribed in Accounting Standard ¦ 3 issued under the Companies (Accounting Standards) Rules, 2006 and as required by the Securities and Exchange Board of India.

4.1. Land is stated at historical cost less amortisation wherever applicable.

4.2. Other Fixed assets are stated at historical cost less accumulated depreciation and impairment.

4.3. Spares received along with the Plant or Equipment and those purchased subsequently for specific machinery and having irregular use are capitalised.

4.4. During the period of construction, directly identifiable expenses are capitalised at the first instance and all other allocable expenses are capitalised proportionately on the basis of the value of the assets.

4.5. Historical Cost for this purpose includes purchase prices, duties (net of cenvat), taxes, incidental expenses, erection / commissioning expenses, technical knowhow fee, professional fee and interest etc., up to the date, the asset is put to use.

5. impairment

Impairment of cash generating units / assets is ascertained and considered where the carrying cost exceeds the recoverable amount being the higher of net realisable amount and value in use.

6. Deputation / Amortisation

6.1. Depreciation on Fixed Assets (including those taken on lease) is provided on Straight Line Method, at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956.

6.2. Cost of leasehold land is amortised over the lease period. Cost of leasehold lands where the transfer of ownership to the company on expiry of the lease period is eventually certain are not amortised.

6.3. Depreciation on amouftts capitalised on account of foreign exchange fluctuation is provided prospectively over residual life of the assets.

6.4. Depreciation on spares having irregular use and purchased subsequent to the installation of specific machinery is provided prospectively over residual life of the specific machinery.

7 Intangible Assets

Cost incurred on intangible asset, resulting in future economic benefits are capitalised as intangible assets and amortised on equated basis over the estimated useful life of such assets.

B Investments

8.1. Long term investments are valued at cost. Provision is made for any diminution, other than temporary in the accounts.

8.2. Current Investments are valued at lower of cost and fair value.

9 Inventories

Inventories are valued at lower of cost and net realisable value. Cost of inventories comprises of purchase cost and other costs incurred in bringing inventories to their present location and condition. The cost has been determined as under:

9.1. Raw material on First in First out (FIFO) basis.

9.2. Finished Products - at Raw material and Conversion cost.

9.3. Stock-in-Process - at Raw material and Proportionate Conversion cost.

9.4. Stores, Spares and ¦ on weighted average cost basis. other trading Goods

10 Revenue Recognition

10.1. Sales are recognised on transfer of custody to customers and includes all statutory levies except Value Added Tax (VAT) and is net of discounts.

10.2. Dividend income is recognised when the right to receive the dividend is established.

10.3. Interest income is recognised on a time proportion basis. 11. Claims

11.1. Claims/Surrenders on/to Petroleum Planning and Analysis Cell, Government of India are booked on in principle acceptance thereof on the basis of available instructions/clarifications subject to final adjustments, as stipulated.

11.2. Insurance Claims

In case of total loss of asset, on intimation to the insurer, either the carrying cost of the asset or insurance value (subject to deductible excess) whichever is lower is treated as claims recoverable from insurance company. In case insurance claim is less than the carrying cost of the asset, the difference is charged to Profit and Loss Account.

In case of partial or other losses, expenditure incurred / payments made to put such assets back into use, to meet the third party or other liabilities (Less deductible excess) if any, are accounted for as claims receivable from insurance company. Insurance Policy Deductible Excess are expensed in the year the corresponding expenditure is incurred.

As and when claims are finally received from the insurance company, the difference, if any, between the claim receivable from insurance company and claims received is adjusted to Profit and Loss Account.

11.3. All other claims and provisions are booked on the merits of each case.

12. Foreign Currency Transactions

12.1. Foreign Currency Transactions are accounted for at the exchange rates prevailing on the date of the transactions.

12.2. The foreign currency assets / liabilities of monetary items are translated using the exchange rates prevailing on the Balance Sheet date.

12.3. The exchange differences on settlement / translation are adjusted:

(i) to the cost of Fixed Assets, if the foreign currency liability relates to Fixed Assets imported from outside India , and

(ii) to the Profit and Loss Account in other cases. Wherever forward contracts are entered into, the exchange differences and premium / discount are dealt with in the Profit and Loss Account over the period of the contracts.

12.4. The mark to market losses (net) in respect of un-expired forward contracts entered into to hedge the risk of changes in foreign currency exchange rates on future export sales against the existing contract are recognised in the Profit and Loss Account.

13. Retirement Benefits

13.1. All short term employee benefits are recognised at their undiscounted amount in the accounting period in which they are incurred. Employee Benefits under defined contribution plans comprising provident fund and superannuation fund are recognised on the undiscounted obligations of the company to contribute to the plan. The same is paid to Provident Fund Trust Authorities and to Life Insurance Corporation of India respectively, which are expensed during the year.

13.2. Employee benefits under defined benefit plans comprising of Gratuity, leave encashment, long service emblem, post retirement medical benefits and other retirement benefits are

recognised based on the present value of defined benefit obligation, which is computed on the basis of actuarial valuation using the Projected Unit Credit Method. Actuarial liability in excess of respective plan assets is recognised during the year.

13.3. Actuarial gains and losses are recognised in the Profit and Loss Account as income or expenses.

13.4. Undiscounted amount of short-term liability on account of un- availed leave is determined and provided for as at the year end.

13.5. Provision for Gratuity as per actuarial valuation is funded with a separate trust.

14. Leases

14.1. Lease rentals in respect of finance lease are segregated into cost of assets and interest component by applying the implicit rate of return.

14.2. Assets acquired on lease where a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Lease rentals are charged to the Profit and Loss Account on accrual basis.

15. Borrowing Costs

Borrowing costs that are attributable to acquisition, construction or production of qualifying assets, are capitalised as part of the cost of such assets. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for intended use. All other borrowing costs are charged to the Profit and Loss Account.

16. Research and Development Expenditure

Capital expenditure on Research and Development is capitalised under the respective fixed assets. Revenue expenditure thereon is charged to Profit and Loss Account.

17. Taxes on Income

17.1. Current tax is determined on the basis of taxable income computed in accordance with the provisions of the Income Tax Act, 1961.

17.2. Deferred tax is recognised on timing differences between taxable and accounting income/expenditure that originates in one period and are capable of reversal in one or more subsequent period(s). Deferred Tax Asset is recognised on the basis of virtual/reasonable certainty about its realisability, as applicable.

18. Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Assets are neither recognised nor disclosed in the financial statements. Contingent liabilities, if material, are disclosed by way of notes.



 
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