Accounting Policies of NEPC India Ltd. Company

Mar 31, 2014

1. Accounting Convention

a) The Financial Statements have been prepared under Historical Cost Convention on going concern basis and in accordance with the provisions of the Companies Act, 1956 and comply with the Accounting Standards issued by the Institute of Chartered Accountants of India, to the extent applicable to the Company.

b) The Company generally follows mercantile system of accounting and recognises income and expenditure on accrual basis except in respect of the insurance claims, Interest on overdue debts, discounts & rebates, dividend received and gratuity payments, leave encashment which are consistently accounted for on cash basis.

2. Fixed Assets

Fixed assets are stated at cost less accumulated depreciation. Cost comprises of capital costs and incidental expenses attributable to bringing the asset to working condition for its intended use. Fixed assets acquired under finance lease are accounted as per the Accounting Standard – 19 Leases issued by The Institute of Chartered Accountants of India. Borrowing costs directly attributable to acquisition or construction of those fixed assets which necessarily take a substantial period of time to get ready for their intended use are capitalised.

3. Depreciation:

Depreciation on fixed assets on Written Down Value Method at the rates prescribed under the Income Tax Act 1961 mentioned here below:

4. Investments: Long Term:

Long-term investments are carried at cost of acquisition. Provision is made only when in management's opinion there is a decline, in the carrying value of such investments.

5. Borrowing Costs:

Borrowing costs attributable to the acquisition or construction of assets are capitalised as part of cost of such asset up to the date when such asset is ready for its intended use. Other borrowing costs are charged to revenue.

6. Revenue Recognition:

Sales of materials & spares:

The revenue in respect of sales of materials & spares is accounted for on dispatch of goods to the customers.

7 Inventories

Inventories of raw material, consumables and work in progress are valued at lower of the cost or estimated net realisable value. The Company consistently follows the policy of not recognising as inventory the goods in transit until the goods are tested and accepted. Cost of work-in- progress includes conversion and other costs incurred in bringing the inventories to their present location and condition. Obsolete, defective and unserviceable stocks are duly provided for.

8. Foreign Currency Transactions

a) Transactions in foreign currency are recorded at the rates of exchange in force at the time of occurrence of the transactions.

b) Assets and outstanding liabilities in foreign currency at the period end are stated at the rates of exchange prevailing at the close of the period and resultant gains/losses are adjusted to:

i) Carrying cost of fixed assets, if they relate to fixed assets and

ii) Profit and Loss Account in other case.

9. Taxation:

Income-tax expense comprises current tax expense, fringe benefit tax and deferred tax expense or credit.

9.1 Current tax provision, as per the Income tax Act, 1961, is made based on the tax liability computed after considering tax allowances and exemptions at the Balance sheet date.

9.2 Deferred tax liability or asset is recognized for timing differences between the profits/losses offered for income taxes and profits/losses as per the financial statements. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted at the Balance sheet date.

Deferred tax assets are recognised only to the extent there is reasonable certainty that the assets can be realized in future; however, where there is unabsorbed depreciation or carried forward loss under taxation laws, deferred tax assets are recognised only if there is a virtual certainty of realisation of such assets. Deferred tax assets are reviewed as at each Balance sheet date and written down or written up to reflect the amount that is reasonably/virtually certain to be realized. (Also refer Note II.11.1)

10. Retirement Benefits:

Gratuity benefits, which are defined benefits, provide a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee's last drawn salary and the tenure of employment. Liabilities with regard to gratuity benefits are accounted on actual payment basis.

Leave encashment benefits as per Company's rules are accounted for on actual payment basis.

11. Research and Development Expenditure:

Revenue expenditure on Research and Development is charged to the Profit and Loss Account in the year in which it is incurred.

12. Earnings per share

In determining earnings per share, the Company considers the net profit after tax and includes the post tax effect of any extraordinary items. The number of shares used in computing basic earnings per share is the weighted average number of shares outstanding during the period. The number of shares used in computing diluted earnings per share comprises the weighted average shares considered for deriving basic earnings per share and also the weighted average number of Equity Shares, which have been subsequently allotted against share application money.

13. Contingencies

Contingencies arising from claims, litigation, assessment, fines, penalties, etc are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. However the contingent Liabilities are disclosed by way of notes.

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Mar 31, 2013

1. Accounting Convention

a) The Financial Statements have been prepared under Historical Cost Convention on going concern basis and in accordance with the provisions of the Companies Act, 1956 and comply with the Accounting Standards issued by the Institute of Chartered Accountants of India, to the extent applicable to the Company.

b) The Company generally follows mercantile system of accounting and recognises income and expenditure on accrual basis except in respect of the insurance claims, Interest on overdue debts, discounts & rebates, dividend received and gratuity payments, leave encashment which are consistently accounted for on cash basis.

2. Fixed Assets

Fixed assets are stated at cost less accumulated depreciation. Cost comprises of capital costs and incidental expenses attributable to bringing the asset to working condition for its intended use. Fixed assets acquired under finance lease are accounted as per the Accounting Standard -19 Leases issued by The Institute of Chartered Accountants of India. Borrowing costs directly attributable to acquisition or construction of those fixed assets which necessarily take a substantial period of time to get ready for their intended use are capitalised.

3. Depreciation:

Depreciation on fixed assets on Written Down Value Method at the rates prescribed under the Income Tax Act 1961 mentioned here below:

4. Investments: Long Term:

Long-term investments are carried at cost of acquisition. Provision is made only when in management''s opinion there is a decline, in the carrying value of such investments.

5. Borrowing Costs:

Borrowing costs attributable to the acquisition or construction of assets are capitalised as part of cost of such asset up to the date when such asset is ready for its intended use. Other borrowing costs are charged to revenue.

6. Revenue Recognition:

Sales of materials & spares:

The revenue in respect of sales of materials & spares is accounted for on dispatch of goods to the customers.

7 Inventories

Inventories of raw material, consumables and work in progress are valued at lower of the cost or estimated net realisable value. The Company consistently follows the policy of not recognising as inventory the goods in transit until the goods are tested and accepted. Cost of work-in- progress includes conversion and other costs incurred in bringing the inventories to their present location and condition. Obsolete, defective and unserviceable stocks are duly provided for.

8. Foreign Currency Transactions

a) Transactions in foreign currency are recorded at the rates of exchange in force at the time of occurrence of the transactions.

b) Assets and outstanding liabilities in foreign currency at the period end are stated at the rates of exchange prevailing at the close of the period and resultant gains/losses are adjusted to:

i) Carrying cost of fixed assets, if they relate to fixed assets and

ii) Profit and Loss Account in other case.

9. Taxation:

Income-tax expense comprises current tax expense, fringe benefit tax and deferred tax expense or credit

9.1 Current tax provision, as per the Income tax Act, 1961, is made based on the tax liability computed after considering tax allowances and exemptions at the Balance sheet date.

9.2 Deferred tax liability or asset is recognized for timing differences between the profits/losses offered for income taxes and profits/losses as per the financial statements. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted at the Balance sheet date.

Deferred tax assets are recognised only to the extent there is reasonable certainty that the assets can be realized in future; however, where there is unabsorbed depreciation or carried forward loss under taxation laws, deferred tax assets are recognised only if there is a virtual certainty of realisation of such assets. Deferred tax assets are reviewed as at each Balance sheet date and written down or written up to reflect the amount that is reasonably/virtually certain to be realized. (Also refer Note II.ll.l)

10. Retirement Benefits:

Eligible employees receive benefits from a provident fund, which is a defined contribution scheme. Both, the employees and the Company make monthly contributions to this scheme equal to a specified percentage of the covered employee''s salary. Contributions to provident fund are made to the Government administered provident fund schemes and charged to the Profit and loss account. The Company has no further obligations under the provident fund plan beyond its monthly contributions.

Gratuity benefits, which are defined benefits, provide a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee''s last drawn salary and the tenure of employment Liabilities with regard to gratuity benefits are accounted on actual payment basis.

Leave encashment benefits as per Company''s rules are accounted for on actual payment basis.

11. Research and Development Expenditure:

Revenue expenditure on Research and Development is charged to the Profit and Loss Account in the year in which it is incurred.

12. Earnings per share

In determining earnings per share, the Company considers the net profit after tax and includes the post tax effect of any extraordinary items. The number of shares used in computing basic earnings per share is the weighted average number of shares outstanding during the period. The number of shares used in computing diluted earnings per share comprises the weighted average shares considered for deriving basic earnings per share and also the weighted average number of Equity Shares, which have been subsequently allotted against share application money.

13. Contingencies

Contingencies arising from claims, litigation, assessment, fines, penalties, etc are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. However the contingent Liabilities are disclosed by way of notes.

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Mar 31, 2012

1. Accounting Convention

a) The Financial Statements have been prepared under Historical Cost Convention on going concern basis and in accordance with the provisions of the Companies Act, 1956 and comply with the Accounting Standards issued by the Institute of Chartered Accountants of India, to the extent applicable to the Company.

b) The Company generally follows mercantile system of accounting and recognises income and expenditure on accrual basis except in respect of the insurance claims, Interest on overdue debts, discounts & rebates, dividend received and gratuity payments, leave encashment which are consistently accounted for on cash basis.

2. Fixed Assets

Fixed assets are stated at cost less accumulated depreciation. Cost comprises of capital costs and incidental expenses attributable to bringing the asset to working condition for it's intended use. Fixed assets acquired under finance lease are accounted as per the Accounting Standard -19 Leases issued by The Institute of Chartered Accountants of India. Borrowing costs directly attributable to acquisition or construction of those fixed assets which necessarily take a substantial period of time to get ready for their intended use are capitalised.

3. Depreciation:

Depreciation on fixed assets on Written Down Value Method at the rates prescribed under the Income Tax Act 1961 mentioned here below:

4. Investments: Long Term:

Long-term investments are carried at cost of acquisition. Provision is made only when in management's opinion there is a decline, in the carrying value of such investments.

5. Borrowing Costs:

Borrowing costs attributable to the acquisition or construction of assets are capitalised as part of cost of such asset up to the date when such asset is ready for its intended use. Other borrowing costs are charged to revenue.

6. Revenue Recognition:

Sales of materials & spares:

The revenue in respect of sales of materials & spares is accounted for on dispatch of goods to the customers.

7 Inventories

Inventories of raw material, consumables and work in progress are valued at lower of the cost or estimated net realisable value. The Company consistently follows the policy of not recognising as inventory the goods in transit until the goods are tested and accepted. Cost of work-in- progress includes conversion and other costs incurred in bringing the inventories to their present location and condition. Obsolete, defective and unserviceable stocks are duly provided for.

8. Foreign Currency Transactions

a) Transactions in foreign currency are recorded at the rates of exchange in force at the time of occurrence of the transactions.

b) Assets and outstanding liabilities in foreign currency at the period end are stated at the rates of exchange prevailing at the close of the period and resultant gains/losses are adjusted to:

i) Carrying cost of fixed assets, if they relate to fixed assets and

ii) Profit and Loss Account in other case.

9. Taxation:

Income-tax expense comprises current tax expense, fringe benefit tax and deferred tax expense or credit

9.1 Current tax provision, as per the Income tax Act, 1961, is made based on the tax liability computed after considering tax allowances and exemptions at the Balance sheet date.

9.2 Deferred tax liability or asset is recognized for timing differences between the profits/losses offered for income taxes and profits/losses as per the financial statements. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted at the Balance sheet date.

Deferred tax assets are recognised only to the extent there is reasonable certainty that the assets can be realized in future; however, where there is unabsorbed depreciation or carried forward loss under taxation laws, deferred tax assets are recognised only if there is a virtual certainty of realisation of such assets. Deferred tax assets are reviewed as at each Balance sheet date and written down or written up to reflect the amount that is reasonably/virtually certain to be realized. (Also refer Note II.ll.l)

10. Retirement Benefits:

Eligible employees receive benefits from a provident fund, which is a defined contribution scheme. Both, the employees and the Company make monthly contributions to this scheme equal to a specified percentage of the covered employee's salary. Contributions to provident fund are made to the Government administered provident fund schemes and charged to the Profit and loss account. The Company has no further obligations under the provident fund plan beyond its monthly contributions.

Gratuity benefits, which are defined benefits, provide a lump Sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee's last drawn salary and the tenure of employment Liabilities with regard to gratuity benefits are accounted on actual payment basis.

Leave encashment benefits as per Company's rules are accounted for on actual payment basis.

11. Research and Development Expenditure:

Revenue expenditure on Research and Development is charged to the Profit and Loss Account in the year in which it is incurred.

12. Earnings per share ,

In determining earnings per share, the Company considers the net profit after tax and includes the post tax effect of any extraordinary items. The number of shares used in computing basic earnings per share is the weighted average number of shares outstanding during the period. The number of shares used in computing diluted earnings per share comprises the weighted average shares considered for deriving basic earnings per share and also the weighted average number of Equity Shares, which have been subsequently allotted against share application money.

13. Contingencies

Contingencies arising from claims, litigation, assessment, fines, penalties, etc are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. However the contingent Liabilities are disclosed by way of notes.

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Mar 31, 2010

1. Accounting Convention

a) The Financial Statements have been prepared under Historical Cost Convention on going concern basis and in accordance with the provisions of the Companies Act, 1956 and comply with the Accounting Standards issued by the Institute of Chartered Accountants of India, to the extent applicable to the Company.

b) The Company generally follows mercantile system of accounting and recognises income and expenditure on accrual basis except in respect of the insurance claims, Interest on overdue debts, discounts & rebates, dividend received and gratuity payments, leave encashment which are consistently accounted for on cash basis.

2. Fixed Assets

Fixed assets are stated at cost less accumulated depreciation. Cost comprises of capital costs and incidental expenses attributable to bringing the asset to working condition for its intended use. Fixed assets acquired under finance lease are accounted as per the Accounting Standard -19 Leases issued by The Institute of Chartered Accountants of India. Borrowing costs directly attributable to acquisition or construction of those fixed assets which necessarily take a substantial period of time to get ready for their intended use are capitalised.

4. Investments:

Long Term:

Long-term investments are carried at cost of acquisition. Provision is made only when in managements opinion there is a decline, in the carrying value of such investments.

5. Borrowing Costs:

Borrowing costs attributable to the acquisition or construction of assets are capitalised as part of cost of such asset up to the date when such asset is ready for its intended use. Other borrowing costs are charged to revenue.

6. Revenue Recognition:

Sales of materials & spares:

The revenue in respect of sales of materials & spares is accounted for on dispatch of goods to the customers.

7 Inventories

Inventories of raw material, consumables and work in progress are valued at lower of the cost or estimated net realisable value. The Company consis tently follows the policy of not recognising as inventory the goods in transit until the goods are tested and accepted. Cost of work-in- progress includes conversion and other costs incurred in bringing the inventories to their present location and condition. Obsolete, defective and unserviceable stocks are duly provided for.

8. Foreign Currency Transactions

a) Transactions in foreign currency are recorded at the rates of exchange in force at the time of occurrence of the transactions.

b) Assets and outstanding liabilities in foreign currency at the period end are stated at the rates of exchange prevailing at the close of the period and resultant gains/losses are adjusted to:

i) Carrying cost of fixed assets, if they relate to fixed assets and

ii) Profit and Loss Account in other case.

9. Taxation:

Income-tax expense comprises current tax expense, fringe benefit tax and deferred tax expense or credit.

9.1 Current tax provision, as per the Income tax Act, 1961, is made based on the tax liability computed after considering tax allowances and exemptions at the Balance sheet date.

9.2 Deferred tax liability or asset is recognized for timing differences between the profits/losses offered for income taxes and profits/losses as per the financial statements. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted at the Balance sheet date.

Deferred tax assets are recognised only to the extent there is reasonable certainty that the assets can be realized in future; however, where there is unabsorbed depreciation or carried forward loss under taxation laws, deferred tax assets are recognised only if there is a virtual certainty of realisation of such assets. Deferred tax assets are reviewed as at each Balance sheet date and written down or written up to reflect the amount that is reasonably/virtually certain to be realized. (Also refer Note II.12.2)

10. Retirement Benefits:

Eligible employees receive benefits from a provident fund, which is a defined contribution scheme. Both, the employees and the Company make monthly contributions to this scheme equal to a specified percentage of the covered employees salary. Contributions to provident fund are made to the Government administered provident fund schemes and charged to the Profit and loss account. The Company has no further obligations under the provident fund plan beyond its monthly contributions.

Gratuity benefits, which are defined benefits, provide a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employees last drawn salary and the tenure of employment. Liabilities with regard to gratuity benefits are accounted on actual payment basis.

Leave encashment benefits as per Companys rules are accounted for on actual payment basis. (Also Refer Note 11.11)

11. Research and Development Expenditure:

Revenue expenditure on Research and Development is charged to the Profit and Loss Account in the year in which it is incurred.

12. Earnings per share

In determining earnings per share, the Company considers the net profit after tax and includes the post tax effect of any extraordinary items. The number of shares used in computing basic earnings per share is the weighted average number of shares outstanding during the period. The number of shares used in computing diluted earnings per share comprises the weighted average shares considered for deriving basic earnings per share and also the weighted average number of Equity Shares, which have been subsequently allotted against share application money.

13. Contingencies

Contingencies arising from claims, litigation, assessment, fines, penalties, etc are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. However the contingent Liabilities are disclosed by way of notes.

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Mar 31, 2001

ACCOUTING CONVENTIONS AND CONCEPTS

A. The Company generally follows the Mercantile System of Accounting recognizing both Income and Expenditure on accrual basis

B. The accounts are prepared on historical cost basis and as a going concern, accounting policies not specifically referred to otherwise are consistent with generally accepted accounting principles.

C. Fixed Assets

Fixed Assets are stated at cost of acquisition less depreciation. The Depreciation on Fixed Assets are provided at the rates specified in Schedule XIV of the Companies Act, 1956, under Straight Line Method on prorata basis.

D. Investments

Investments are valued at cost of acquisition and dividends/Income on the same will be accounted at the time of receipt.