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Accounting Policies of Sahyadri Industries Ltd. Company

Mar 31, 2016

1. CORPORATE INFORMATION :

The company is engaged in the production of Fibre Cement Sheets and Accessories, trading of steel doors & in generation of wind power electricity. The company presently has five manufacturing units situated at Maharashtra, Tamilnadu, Gujarat and Andhra Pradesh. The company has set up Wind Turbine Generators in Maharashtra, Rajasthan & Tamilnadu.

2. BASIS OF PREPARATION :

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respect with the accounting standards as prescribed under section 133 of the Companies Act, 2013 read with Rule 7 of the companies (Accounts) Rules 2014. The financial statements have been prepared on an accrual basis and under the historical cost convention.

2.1 : SIGNIFICANT ACCOUNTING POLICIES FOLLOWED :

2.1.1 Fixed Assets :

Fixed assets are stated at cost less accumulated depreciation. Cost of acquisition is inclusive of freight, non refundable duties and taxes, incidental expenses if any. Fixed assets exclude assets individually costing '' 15000 or less which are not capitalized except when they are part of a larger capital investment program.

2.1.2 Intangible assets:

Intangible assets are stated at cost of acquisition less accumulated amortization. Intangible assets exclude assets individually costing Rs. 15000 or less which are not capitalized except when they are part of a larger capital investment program.

2.1.3 Depreciation/ Amortization :

i) Depreciation on fixed assets has been provided to the extent of depreciable assets on written down value method at the rates and in the manner prescribed in schedule II of the Companies Act, 2013 over their useful life except on fixed assets installed at Gujarat factory & Windmills installed at Chavaneshwar wherein depreciation is provided on straight line method in the manner prescribed in schedule II of Companies Act,2013 over their useful life.

ii) Lease hold land is amortized over the period of lease.

iii) Computer software are amortized over period of 5 years.

iv) Windmill rights are amortized over period of 10 years.

2.1.4 Provision for Taxation & Deferred Tax :

i) Provision for current income tax is made on the assessable income at the tax rate applicable to the relevant assessment year, net off Minimum Alternate Tax credit available u/s 115JB of the Income Tax Act, 1961.

ii) Deferred income taxes are recognized for the future tax consequences attributable to timing differences between the financial statement determination of income and their recognition for the tax purpose. The effect on deferred tax assets and liabilities of a change in tax rates is recognized as income / expense using the tax rates and the tax laws that have been enacted or substantively enacted by the balance sheet date. Deferred tax assets are recognized and carried forward only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

iii) MAT Credit is recognized as an asset only when & to the extent there is convincing evidence that the Company will pay normal income tax during the specified years. In the year in which the Minimum Alternative Tax(MAT) credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in the Guidance Note issued by the Institute of Chartered Accountants of India, the said asset is created by way of credit to the Profit & Loss account & shown as MAT credit entitlement. The Company reviews the same at each balance Sheet date & drags down the carrying amount of MAT Credit entitlement to the extent there is no longer convincing evidence to the effect that the company will pay normal income tax during the specified period.

2.1.5 Retirement and other employees Benefits :

i) Retirement benefit in the form of provident fund & super annunation /pension schemes, are defined contributions scheme and are charged to Profit & Loss account of the year when the contributions to the respective funds are due.

ii) Gratuity Liability is a defined benefit obligation. The Company has taken an insurance policy under Group Gratuity Scheme with Life Insurance Corporation of India to cover the gratuity liability of the employees and amount paid / payable in respect of present value of liability for past services is charged to Profit & Loss account on the basis of actuarial valuation on the projected unit credit method made at the end of the financial year.

iii) Long term compensated absences are provided for based on actuarial valuation at the end of the financial year. The actuarial valuation is done as per projected unit credit method.

iv) Actuarial gains / losses are immediately taken to Profit & Loss Account and are not deferred.

2.1.6 Investments :

Investments are stated at cost of acquisition less provision for diminution in value if any.

2.1.7 Foreign Currency Transactions :

i) Foreign Currency transactions are accounted at exchange rates prevailing on the date of transactions. Monetary items denominated in foreign currency & outstanding at the balance sheet date are translated at the exchange rate prevailing on that date. In case of forward exchange contracts, the difference between the year end rate & rate on the date of the contract is recognized as exchange difference & the premium paid on forward contracts is recognized as expense over the life of the contract. Exchange differences arising on foreign currency transactions are accounted in the period in which they arise.

ii) Derivative instruments & hedge accounting :

The company uses foreign currency forward contracts and currency options to hedge its risk associated with foreign currency fluctuations relating to certain firm commitments and forecasted transactions. The Company designates these hedging instruments as cash flow hedges applying the recognition and measurement principles set out in the Accounting Standard 30 "Financial Instruments : Recognition and Measurement" (AS 30).

The use of hedging instruments is governed by the Company''s policy approved by the Board of Directors. The Company does not use Derivative financial instruments for speculative purposes. Hedging instruments are initially measured at fair value, and are re-measured at subsequent reporting dates. Changes in fair value of these derivatives that are designated and effective as hedges of future cash flow are recognized directly in shareholder''s fund and the ineffective portion, if any is recognized immediately in the Profit and Loss Account.

Changes in the fair value of derivative financial instruments that do not qualify for hedge accounting are recognized in the profit and loss account as they arise.

Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or no longer qualifies for hedge accounting. At the time for forecasted transaction any cumulative gain or loss on the hedging instrument recognized in shareholder''s fund is retained there until, the forecasted transaction occurs. If a hedge transaction is no longer expected to occur, the net cumulative gain or loss recognized in reserves is transferred to the Profit and Loss Account.

2.1.8 Borrowing Costs :-

The interest on working capital borrowed is charged against the profits for the year in which it is incurred.

Interest on borrowing for capital asset is capitalized till the date of commencement of commercial use of the asset. Borrowing Cost also includes exchange differences arising from foreign currency borrowings to the extent that they are relating to interest component.

2.1.9 Valuation of Inventory :

i) Raw material is valued at lower of moving weighted average cost(Net off Cenvat) & net realizable value. However material held for use in the production of inventories are not written down below cost, if the finished product in which they will be incorporated are expected to be sold at or above cost.

ii) Work in Progress is valued at weighted average cost.

iii) Finished goods are valued at lower of weighted average cost and net realizable value. Cost for this purpose includes direct cost, attributable overheads and excise duty. Doors are valued at moving weighted average cost or net realizable value whichever is lower. Pipes & other items meant for resale are valued at cost or net realizable value whichever is lower.

iv) Stores & spares are valued at moving weighted average cost.

v) In the opinion of the management the value of scrap and rejected material is nil and hence the same is not taken in inventories.

2.1.10 Revenue recognition

i) Sale: The sale of product is accounted for net of Sales Tax but including excise duty recovered. The sale is accounted on transfer of title of goods to the customer.

ii) Export incentive receivable are accounted as accrued as and when finally quantified by appropriate authorities.

iii) Debit / Credit arising out of revisions in prices of supplies, breakages and other claims are accounted for, in the year of its acceptance.

iv) Carbon credit entitlement :- In the process of generation of wind power the company also generate carbon emission reduction units which may be negotiated for price in international market under Clean Development Mechanism(CDM) subject to completing formalities and obtaining certificate of Carbon Emission Reduction(CER) as per Kyoto Protocol. In addition company also explore the possibilities of negotiating Voluntary Emission Reduction (VER) in respect of some ot the Company''s wind power generation projects. Revenue from CER and VER is accounted on its realization.

2.1.11 Government Grants and Subsidies

a) The Company''s manufacturing facility at village Narsimhama Palam, Krishna District, Andhra Pradesh is eligible for Industrial Promotion - Incentives for the establishment of Industrial Enterprises in Andhra Pradesh under the New categories within the framework of the Industrial Development Policy (IDP) 2015-20.

b) Government grants and subsidies are recognized when there is reasonable assurance that the conditions attached to them will be complied, and grant/subsidy will be received.

c) Where the Government grants / subsidies relates to revenue, it is recognized as income on a systematic basis in the statement of profit and loss over the periods necessary to match them with the related costs/ outflow, which they are intended to compensate. Government grants and subsidies receivable against an expense are deducted from such expense.

d) Grants and subsidies receivable against a specific fixed asset is deducted from cost of the relevant fixed asset at the time of recognition. "

2.1.12 Provisions :-

A provision is recognized when there is a present obligation as a result of past event & it is probable that an outflow of resources will be required to settle the obligation & in respect of which a reliable estimate can be made. These are reviewed at each Balance sheet date & adjusted to reflect the current best estimates.

2.1.13 Lease :-

Operating lease - Leases where lessor effectively retains substantially all the risks & benefits of ownership of the leased assets are classified as Operating leases. Operating lease charges are recognized as an expenses in the Profit & Loss account on a straight line basis over the lease term.

Finance lease - Leases under which the Company assumes substantially all the risks and rewards of ownership are classified as finance leases. The lower of fair value of asset and present minimum lease rentals is capitalized as fixed assets with corresponding amounts shown as lease liability. The principle component in the lease rentals is adjusted against lease liability and interest component is charged to Profit & Loss account.

2.1.14 Impairment of Assets :-

The carrying amount of assets are reviewed at each Balance Sheet date for impairment based on internal / external factors. An asset is impaired when the carrying amount of the asset exceeds the recoverable amount. An impairment loss is charged to the Profit & Loss account in the year in which an asset is identified as impaired. An impairment loss recognized in prior accounting periods is reversed if there has been change in the estimate of the recoverable amount.

2.1.15 Use of Estimates :-

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates & assumptions that affect the reported amounts of assets & liabilities at the date of the financial statements and the reported amounts of revenues and the expenses during the reporting period. Differences between actual results and estimates are recognized in the period in which the results are known/materialized.


Mar 31, 2015

1.1.1 Fixed Assets:

Fixed assets are stated at cost less accumulated depreciation. Cost of acquisition is inclusive of freight, non refundable duties and taxes, incidental expenses if any.

2.1.2 Intangible assets:

Intangible assets are stated at cost of acquisition less accumulated amortization.

2.1.3 Depreciation/ Amortization :

i) Depreciation on fixed assets put to commercial use has been provided to the extent of depreciable assets on written down value method at the rates and in the manner prescribed in schedule II of the Companies Act, 2013 over their useful life except on fixed assets installed at Gujarat factory & Windmills installed at Chavaneshwar wherein depreciation is provided on straight line method in the manner prescribed in schedule II of Companies Act,2013 over their useful life.

ii) Lease hold land is amortized overthe period of lease.

iii) Computer software are amortized over period of 5 years.

iv) Windmill rights are amortized over period of 10 years.

2.1.4 Provision forTaxation& Deferred Tax:

i) Provision for current income tax is made on the assessable income at the tax rate applicable to the relevant assessment year, net off Minimum Alternate Tax credit available u/s 115JBof the Income Tax Act, 1961.

ii) Deferred income taxes are recognized for the future tax consequences attributable to timing differences between the financial statement determination of income and their recognition for the tax purpose. The effect on deferred tax assets and liabilities of a change in tax rates is recognized as income using the tax rates and the tax laws that have been enacted or substantively enacted by the balance sheet date. Deferred tax assets are recognized and carried forward only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

iii) MAT Credit is recognized as an asset only when & to the extent there is convincing evidence that the Company will pay normal income tax during the specified years. In the year in which the Minimum Alternative Tax(MAT) credit becomes eligible to be recognised as an asset in accordance with the recommendations contained in the Guidance Note issued by the Institute of Chartered Accountants of India, the said asset is created byway of credit to the Profit & Loss account & shown as MAT credit entitlement. The Company reviews the same at each balance Sheet date & drags down the carrying amount of MAT Credit entitlement to the extent there is no longer convincing evidence to the effect that the company will pay normal income tax during the specified period.

2.1.5 Retirement and other employees Benefits:

i) Retirement benefit in the form of provident fund & super annunation /pension schemes, are defined contributions scheme and are charged to Profit & Loss account of the year when the contributions to the respective funds are due.

ii) Gratuity Liability is a defined benefit obligation. The Company has taken an insurance policy under Group Gratuity Scheme with Life Insurance Corporation of India to cover the gratuity liability of the employees and amount paid / payable in respect of present value of liability for past services is charged to Profit & Loss account on the basis of actuarial valuation on the projected unit credit method made at the end of the financial year.

iii) Long term compensated absences are provided for based on actuarial valuation at the end of the financial year. The actuarial valuation is done as per projected unit credit method.

iv) Actuarial gains / losses areimmediatelytaken to Profit & Loss Account and are not deferred.

2.1.6 Investments

Investments are stated at cost of acquisition less provision for diminution in value if any.

2.1.7 Foreign CurrencyTransactions:

i) Foreign Currency transactions are accounted at exchange rates prevailing on the date of transactions. Monetary items denominated in foreign currency & outstanding at the balance sheet date are translated at the exchange rate prevailing on that date. In case of forward exchange contracts, the difference between the year end rate & rate on the date of the contract is recognised as exchange difference & the premium paid on forward contracts is recognised as expense over the life of the contract. Exchange differences arising on foreign currency transactions are accounted in the period in which they arise.

ii) Derivative instruments & hedge accounting:

The company uses foreign currency forward contracts and currency options to hedge its risk associated with foreign currency fluctuations relating to certain firm commitments and forecasted transactions. The Company designates these hedging instruments as cash flow hedges applying the recognition and measurement principles set out in the Accounting Standard 30 "Financial Instruments: Recognition and Measurement" (AS 30).

The use of hedging instruments is governed by the Company's policy approved by the Board of Directors. The Company does not use Derivative financial instruments for speculative purposes.

Hedging instruments are initially measured at fair value, and are re-measured at subsequent reporting dates. Changes in fair value of these derivatives that are designated and effective as hedges of future cash flow are recognized directly in shareholder's fund and the ineffective portion, ifany is recognized immediately in the Profit and Loss Account.

Changes in the fair value of derivative financial instruments that do not qualify for hedge accounting are recognized in the profit and loss account as they arise.

Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or no longer qualifies for hedge accounting. At the time for forecasted transaction any cumulative gain or loss on the hedging instrument recognized in shareholder's fund is retained there until, the forecasted transaction occurs. If a hedge transaction is no longer expected to occur, the net cumulative gain or loss recognized in reserves is transferred to the Profit and Loss Account.

2.1.8 Borrowing Costs:-

The interest on working capital borrowed is charged against the profits for the year in which it is incurred. Interest on borrowing for capital asset is capitalized till the date of commencement of commercial use of the asset. Borrowing Cost also includes exchange differences arising from foreign currency borrowings to the extent that they are relating to interest component.

2.1.9 Valuation of Inventory:

i) Raw material is valued at lower of moving weighted average cost(Net off Cenvat) & net realizable value. However material held for use in the production of inventories are not written down below cost, if the finished product in which they will be incorporated are expected to be sold at or above cost.

ii) Work in Progress is valuedat weighted average cost.

iii) Finished goods are valued at lower of weighted average cost and net realizable value. Cost for this purpose includes direct cost, attributable overheads and excise duty. Doors are valued at moving weighted average cost. Other items meant for resale are valued at cost or net realizable value whichever is lower.

iv) Stores & spares are valued at moving weighted average cost.

v) In the opinion of the management the value of scrap and rejected material is nil and hence the same is not taken in inventories.

2.1.10 Revenue recognition

i) Sale: The sale of product is accounted for net of Sales Tax but including excise duty recovered. The sale is accounted on transfer of title of goods to the customer.

ii) Export incentive receivableare accounted as accrued as and when finally quantified by appropriate authorities.

iii) Debit / Credit arising out of revisions in prices of supplies, breakages and other claims are accounted for, in the yearof its acceptance.

iv) Carbon credit entitlement :- In the process of generation of wind power the company also generate carbon emission reduction units which may be negotiated for price in international market under Clean Development Mechanism(CDM) subject to completing formalities and obtaining certificate of Carbon Emission Reduction(CER) as per Kyoto Protocol. In addition company also explore the possibilities of negotiating Voluntary Emission Reduction (VER) in respect of some of the Company's wind power generation projects. Revenue from CER and VER is accounted on its realization.

2.1.11 Provisions:-

A provision is recognized when there is a present obligation as a result of past event & it is probable that an outflow of resources will be required to settle the obligation & in respect of which a reliable estimate can be made. These are reviewed at each Balance sheet date & adjusted to reflect the current best estimates.

2.1.12 Lease:-

Operating lease - Leases where lessor effectively retains substantially all the risks & benefits of ownership of the leased assets are classified as Operating leases. Operating lease charges are recognized as an expenses in the Profit & Loss account on a straight line basis overthe lease term.

Finance lease - Leases under which the Company assumes substantially all the risks and rewards of ownership are classified as finance leases. The lower of fair value of asset and present minimum lease rentals is capitalized as fixed assets with corresponding amounts shown as lease liability. The principle component in the lease rentals is adjusted against lease liability and interest component is charged to Profit & Loss account.

2.1.13 Use ofEstimates:-

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates & assumptions that affect the reported amounts of assets & liabilities at the date of the financial statements and the reported amounts of revenues and the expenses during the reporting period. Differences between actual results and estimates are recognized in the period in which the results are known/materialized.

2.1.14 Impairment of Assets:-

The carrying amount of assets are reviewed at each Balance Sheet date for impairment based on internal / external factors. An asset is impaired when the carrying amount of the asset exceeds the recoverable amount. An impairment loss is charged to the Profit & Loss account in the year in which an asset is identified as impaired. An impairment loss recognized in prior accounting periods is reversed if there has been change in the estimate of the recoverable amount.


Mar 31, 2014

1.1.1 Fixed Assets:

Fixed assets are stated at cost less accumulated depreciation. Cost of acquisition is inclusive of freight, non refundable duties and taxes, incidental expenses if any.

1.1.2 Intangible assets:

Intangible assets are stated at cost of acquisition less accumulated amortization.

1.1.3 Depreciation/Amortization :

i) Depreciation on fixed assets has been provided to the extent of depreciable assets on written down value method at the rates and in the manner prescribed in schedule XIV of the Companies Act, 1956 over their useful life except on fixed assets installed at Gujarat factory & Windmills installed at Chavaneshwar wherein depreciation is provided on straight line method in the manner prescribed in schedule XIV of Companies Act,1956 over their useful life.

ii) Lease hold land is amortized over the period of lease.

iii) Computer software are amortized over period of 5 years.

iv) Windmill rights are amortized over period of 10 years.

1.1.4 Provision for Taxation & Deferred Tax:

i) Provision for current income tax is made on the assessable income at the tax rate applicable to the relevant assessment year, net off Minimum Alternate Tax credit available u/s 115 JB of the Income Tax Act, 1961.

ii) Deferred income taxes are recognized for the future tax consequences attributable to timing differences between the financial statement determination of income and their recognition for the tax purpose. The effect on deferred tax assets and liabilities of a change in tax rates is recognized as income using the tax rates and the tax laws that have been enacted or substantively enacted by the balance sheet date. Deferred tax assets are recognized and carried forward only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

iii) MAT Credit is recognized as an asset only when & to the extent there is convincing evidence that the Company will pay normal income tax during the specified years. In the year in which the Minimum Alternative Tax(MAT) credit becomes eligible to be recognised as an asset in accordance with the recommendations contained in the Guidance Note issued by the Institute of Chartered Accountants of India,the said asset is created by way of credit to the Profit & Loss account & shown as MAT credit entitlement. The Company reviews the same at each balance Sheet date & drags down the carrying amount of MAT Credit entitlement to the extent there is no longer convincing evidence to the effect that the company will pay normal income tax during the specified period.

1.1.5 Retirement and other employees Benefits:

i) Retirement benefit in the form of provident fund & super annunation /pension schemes, are defined contributions scheme and are charged to Profit & Loss account of the year when the contributions to the respective funds are due.

ii) Gratuity Liability is a defined benefit obligation. The Company has taken an insurance policy under Group Gratuity Scheme with Life Insurance Corporation of India to cover the gratuity liability of the employees and amount paid / payable in respect of present value of liability for past services is charged to Profit & Loss account on the basis of actuarial valuation on the projected unit credit method made at the end of the financial year.

iii) Long term compensated absences are provided for based on actuarial valuation at the end of the financial year. The actuarial valuation is done as per projected unit credit method.

iv) Actuarial gains / losses are immediately taken to Profit & Loss Account and are not deferred.

1.1.6 Investments

Investments are stated at cost of acquisition less provision for diminution in value if any.

1.1.7 Foreign Currency Transactions:

i) Foreign Currency transactions are accounted at exchange rates prevailing on the date of transactions. Monetary items denominated in foreign currency & outstanding at the balance sheet date are translated at the exchange rate prevailing on that date. In case of forward exchange contracts, the difference between the year end rate & rate on the date of the contract is recognised as exchange difference & the premium paid on forward contracts is recognised as expense over the life of the contract. Exchange differences arising on foreign currency transactions are accounted in the period in which they arise.

ii) Derivative instruments & hedge accounting:

The company uses foreign currency forward contracts and currency options to hedge its risk associated with foreign currency fluctuations relating to certain firm commitments and forecasted transactions. The Company designates these hedging instruments as cash flow hedges applying the recognition and measurement principles set out in the Accounting Standard 30 "Financial Instruments: Recognition and Measurement" (AS 30).

The use of hedging instruments is governed by the Company''s policy approved by the Board of Directors. The Company does not use Derivative financial instruments for speculative purposes.

Hedging instruments are initially measured at fair value, and are re-measured at subsequent reporting dates. Changes in fair value of these derivatives that are designated and effective as hedges of future cash flow are recognized directly in shareholder''s fund and the ineffective portion, if any is recognized immediately in the Profit and Loss Account.

Changes in the fair value of derivative financial instruments that do not qualify for hedge accounting are recognized in the profit and loss account as they arise.

Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or no longer qualifies for hedge accounting. At the time for forecasted transaction any cumulative gain or loss on the hedging instrument recognized in shareholder''s fund is retained there until, the forecasted transaction occurs. If a hedge transaction is no longer expected to occur, the net cumulative gain or loss recognized in reserves is transferred to the Profit and Loss Account.

1.1.8 Borrowing Costs:-

The interest on working capital borrowed is charged against the profits for the year in which it is incurred. Interest on borrowing for capital asset is capitalized till the date of commencement of commercial use of the asset. Borrowing Cost also includes exchange differences arising from foreign currency borrowings to the extent that they are relating to interest component.

1.1.9 Valuation of Inventory:

i) Raw material is valued at lower of moving weighted average cost(Net off Cenvat) & net realizable value. However material held for use in the production of inventories are not written down below cost, if the finished product in which they will be incorporated are expected to be sold at or above cost.

ii) Work in Progress is valued at weighted average cost.

iii) Finished goods are valued at lower of weighted average cost and net realizable value. Cost for this purpose includes direct cost, attributable overheads and excise duty. Doors are valued at moving weighted average cost. Pipes & other items meant for resale are valued at cost or net realizable value whichever is lower.

iv) Stores & spares are valued at moving weighted average cost.

v) In the opinion of the management the value of scrap and rejected material is nil and hence the same is not taken in inventories.

1.1.10 Revenue recognition

i) Sale: The sale of product is accounted for net of Sales Tax but including excise duty recovered. The sale is accounted on transfer of title of goods to the customer.

ii) Export incentive receivable are accounted as accrued as and when finally quantified by appropriate authorities.

iii) Debit / Credit arising out of revisions in prices of supplies,breakages and other claims are accounted for,in the year of its acceptance.

iv) Carbon credit entitlement :- In the process of generation of wind power the company also generate carbon emission reduction units which may be negotiated for price in international market under Clean Development Mechanism(CDM) subject to completing formalities and obtaining certificate of Carbon Emission Reduction(CER) as per Kyoto Protocol. In addition company also explore the possibilities of negotiating Voluntary Emission Reduction (VER) in respect of some of the Company''s wind power generation projects. Revenue from CER and VER is accounted on its realization.

1.1.11 Provisions:-

A provision is recognized when there is a present obligation as a result of past event & it is probable that an outflow of resources will be required to settle the obligation & in respect of which a reliable estimate can be made. These are reviewed at each Balance sheet date & adjusted to reflect the current best estimates.

1.1.12 Lease:-

Operating lease - Leases where lessor effectively retains substantially all the risks & benefits of ownership of the leased assets are classified as Operating leases. Operating lease charges are recognized as an expenses in the Profit & Loss account on a straight line basis over the lease term.

Finance lease - Leases under which the Company assumes substantially all the risks and rewards of ownership are classified as finance leases. The lower of fair value of asset and present minimum lease rentals is capitalized as fixed assets with corresponding amounts shown as lease liability. The principle component in the lease rentals is adjusted against lease liability and interest component is charged to Profit & Loss account.

1.1.13 Use of Estimates:-

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates & assumptions that affect the reported amounts of assets & liabilities at the date of the financial statements and the reported amounts of revenues and the expenses during the reporting period. Differences between actual results and estimates are recognized in the period in which the results are known/materialized.

1.1.14 Impairment of Assets:-

The carrying amount of assets are reviewed at each Balance Sheet date for impairment based on internal / external factors. An asset is impaired when the carrying amount of the asset exceeds the recoverable amount. An impairment loss is charged to the Profit & Loss account in the year in which an asset is identified as impaired. An impairment loss recognized in prior accounting periods is reversed if there has been change in the estimate of the recoverable amount.


Mar 31, 2013

1.1.1 Fixed Assets :

Fixed assets are stated at cost less accumulated depreciation. Cost of acquisition is inclusive of freight, non refundable duties and taxes, incidental expensesifany.

1.1.2 Intangible assets:

Intangible assets arestatedatcostofacquisition less accumulated amortization.

1.1.3 Depreciation/ Amortization :

i) Depreciation on fixed assets has been provided to the extent of depreciable assets on written down value method at the rates and in the manner prescribed in schedule XIV of the Companies Act, 1956 over their useful life except on fixed assets installed at Gujarat factory & Windmills installed at Chavaneshwar wherein depreciation is provided on straight line method in the manner prescribed in schedule XIV of Companies Act,1956 over their useful life.

ii) Lease hold land is amortized over the period of lease.

iii) Computersoftware are amortized over period of 5 years.

iv) Windmill rights are amortized over period of 10 years.

1.1.4 Provision for Taxation & Deferred Tax :

i) Provision for current income tax is made on the assessable income at the tax rate applicable to the relevant assessment year,netoff Minimum Alternate Taxcreditavailableu/s 115J Bofth eIncome Tax Act,1961.

ii) Deferred income taxes are recognized for the future tax consequences attributabletotiming differences between the financial statementdeterminationofincome and their recognition for the tax purpose. The effectondeferred tax assets and liabilities of a change in tax rates is recognized as income using the tax rates and the tax laws that have been enacted or substantively enacted by the balance sheet date. Deferred tax assets are recognized and carried forward onlyto the extent that there isa reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets canberealized.

iii) MAT Credit is recognized as an asset only when & to the extent there is convincing evidence that the Company will pay normal income tax during the specified years. In the year in which the Minimum Alternative Tax(MAT) credit becomes eligible to be recognised as an asset in accordance with the recommendations contained in the Guidance Note issued by the Institute of Chartered Accountants of India, the said asset is created by way of credit to theProfit&Lossaccount &shownasMATcredit entitlement. The Company reviews the sameateachbalance Sheet date & drags down the carrying amount of MAT Credit entitlement to the extent there is no longer convincingevidencetothe effect that the company will pay normal income tax during the specified period.

1.1.5 Retirement and other employees Benefits:

i) Retirement benefit in the form of provident fund & super annunation /pension schemes, are defined contributions scheme and are charged to Profit & Loss account of the year when the contributions to the respective funds are due.

ii) Gratuity Liabilityisadefined benefit obligation. The Company has takenaninsurance policy under Group Gratuity Scheme with Life Insurance Corporation of India to cover the gratuity liability of the employees and amount paid

/ payable in respect of present value of liability for past services is charged to Profit & Loss account on the basis of actuarial valuationontheprojected unit credit method madeatthe endoffinancial year.

iii) Long term compensated absences are provided for based on actuarial valuation at the end of the financial year. The actuarial valuationisdoneasper projected unit credit method.

iv) Actuarial gains/losses are immediatelytakentoProfit&Loss Account andare not deferred.

1.1.6 Investments

Investments are stated atcost of acquisitionless provision for diminution in value if any.

1.1.7 Foreign CurrencyTransactions :

i) Foreign Currency transactions are accounted at exchange rates prevailing on the date of transactions. Monetary items denominated in foreign currency & outstanding at the balance sheet date are translated at the exchange rate prevailing on that date. In case of forward exchange contracts, the difference between the year end rate & rateon the date of the contractis recognised asexchange difference& the premium paid onforward contracts is recognised as expense over the life of the contract. Exchange differences arising on foreign currency transactions are accountedinthe periodinwhich theyarise.

ii) Derivative instruments&hedge accounting :

The company uses foreign currency forward contracts and currency options to hedge its risk associated with foreign currency fluctuations relating to certain firm commitments and forecasted transactions. The Company designates thesehedging instrumentsascash flow hedgesapplyingtherecognition andmeasurement principles The use of hedging instruments is governed by the Company''s policy approved by the Board of Directors. The Company does not use Derivative financial instruments for speculative purposes.

Hedging instruments are initially measured at fair value, and are re-measured at subsequent reporting dates. Changes in fair value of these derivatives that are designated and effective as hedges of future cash flow are recognized directly in shareholder''s fund and the ineffective portion, if any is recognized immediately in the Profit and Loss Account.

Changes in the fair value of derivative financial instruments that do not qualify for hedge accounting are recognizedintheprofit and loss accountas they arise.

Hedge accountingis discontinued when the hedging instrument expires orissold, terminated, or exercised, orno longer qualifies for hedge accounting.

At the time for forecasted transaction any cumulative gain or loss on the hedging instrument recognized in shareholder''s fund is retained there until, the forecasted transaction occurs. If a hedge transaction is no longer expectedtooccur, the net cumulative gainorloss recognizedinreservesistransferredtoProfit and Loss Account.

1.1.8 Borrowing Costs :-

The interest on working capital borrowed is charged against the profits for the year in which it is incurred. Interest on borrowing for capital asset is capitalized till the date of commencement of commercial use of the asset. Borrowing Cost also includes exchange differences arising from foreign currency borrowingsto the extent that they are relating tointerestcomponent.

1.1.9 Valuation of Inventory :

i) Raw material is valued at lower of moving weighted average cost(Net off Cenvat) & net realizable value. However material held for use in the production of inventories are not written down below cost, if the finished product in which they will be incorporated are expected to be sold at or above cost.

ii) WorkinProgressis valuedatweighted average cost.

iii) Finished goods are valued at lower of weighted average cost and net realizable value. Cost for this purpose includes direct cost, attributable overheads and excise duty. Doors are valued at moving weighted average cost . Pipes & other items meant for resale are valued at cost or net realizable value whicheveris lower.

iv) Stores & spares are valued atmoving weightedaverage cost.

v) In the opinionofthe management the valueofscrap and rejected materialis nil and hence the sameis not taken in inventories.

1.1.10 Revenuerecognition

i) Sale: The saleofproductisaccounted for net ofSales Tax but including excise duty recovered. The sale isaccounted on transferoftitleofgoodstothe customer.

ii) Export incentive receivable areaccountedasaccrued as and when finally quantifiedby appropriate authorities.

iii) Debit / Credit arising out of revisions in prices of supplies, breakages and other claims are accounted for, in the year of its acceptance.

iv)Carbon credit entitlement :- In the process of generation of wind power the company also generate carbon emission reduction units which may be negotiated for price in international market under Clean Development Mechanism(CDM) subject to completing formalities and obtaining certificate of Carbon Emission Reduction(CER) as per Kyoto Protocol. In addition company also explore the possibilities of negotiating Voluntary Emission Reduction (VER)inrespectofsomeotthe Company''s windpower generation projects.Revenuefrom CER andVERisaccounted on itsrealization.

1.1.11 Provisions:-

A provision is recognized when there is a present obligation as a result of past event & it is probable that an outflow of resources will be required to settle the obligation & in respect of which a reliable estimate can be made. These are reviewedateachBalance sheet date&adjustedtoreflect the current best estimates.

1.1.12 Lease :-

Operating lease – Leases where lessor effectively retains substantially all the risks & benefits of ownership of the leased assets are classified as Operating leases. Operating lease charges are recognized as an expenses in the Profit &Loss account on a straight line basis over the lease term.

Finance lease – Leases under which the Company assumes substantially all the risks and rewards of ownership are classified as finance leases. The lower of fair value of asset and present minimum lease rentals is capitalized as fixed assets with corresponding amounts shownaslease liability. The principle component in the lease rentals is adjusted against lease liability and interest componentis chargedto Profit&Lossaccount.

1.1.13 UseofEstimates :-

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates & assumptions that affect the reported amounts of assets & liabilities at the date of the financial statements and the reported amounts of revenues and the expenses during the reporting period. Differences between actual results and estimates are recognized in the period in which the results are known/materialized.

1.1.14 ImpairmentofAssets :-

The carrying amount of assets are reviewed at each Balance Sheet date for impairment based on internal / external factors. An asset is impaired when the carrying amount of the asset exceeds the recoverable amount. An impairment loss is charged to the Profit & Loss account in the year in which an asset is identified as impaired. An impairment loss recognized in prior accounting periods is reversed if there has been change in the estimate of the recoverable amount.


Mar 31, 2012

1.1.1 Presentation and disclosure of financial statements:

During the year ended 31 March 2012, the revised Schedule VI notified under the Companies Act 1956, has become applicable to the company, for preparation and presentation of its financial statements. The adoption of revised Schedule VI does not impact recognition and measurement principles followed for preparation of financial statements. However, it has significant impact on presentation and disclosures made in the financial statements. The company has also reclassified the previous year figures in accordance with the requirements applicable in the current year.

1.1.2 Fixed Assets:

Fixed assets are stated at cost less accumulated depreciation. Cost of acquisition is inclusive of freight, non refundable duties and taxes, incidental expenses if any.

1.1.3 Intangible assets:

Intangible assets are stated at cost of acquisition less accumulated amortization.

1.1.4 Depreciation/Amortization :

i) Depreciation on fixed assets has been provided to the extent of depreciable assets on written down value method at the rates and in the manner prescribed in schedule XIV of the Companies Act, 1956 over their useful life except on fixed assets installed at Gujrat factory & Windmills installed at Chavaneshwar wherein depreciation is provided on straight line method in the manner prescribed in schedule XIV of Companies Act, 1956 over their useful life.

ii) Lease hold land is amortized over the period of lease.

iii) Computer software are amortized over period of 5 years.

iv) Windmill rights are amortized over period of 10 years.

1.1.5 Provision for Taxation & Deferred Tax:

i) Provision for current income tax is made on the assessable income at the tax rate applicable to the relevant assessment year, net off Minimum Alternate Tax credit available u/s 115JB of the Income Tax Act, 1961.

ii) Deferred income taxes are recognized for the future tax consequences attributable to timing differences between the financial statement determination of income and their recognition for the tax purpose. The effect on deferred tax assets and liabilities of a change in tax rates is recognized as income using the tax rates and tax laws that have enacted or substantively enacted by the balance sheet date. Deferred tax assets are recognized and carried forward only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

MAT Credit is recognized as an asset only when & to the extent there is convincing evidence that the Company will pay normal income tax during the specified year, in the year in which the Minimum Alternative Tax (MAT) credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in the Guidance Note issued by the Institute of Chartered Accountants of India, the said asset is created by way of credit to the Profit & Loss account & shown as MAT credit entitlement. The Company review's the same at each balance Sheet date & drags down the carrying amount of MAT Credit entitlement to the extent there is no longer convincing evidence to the effect that the company will pay normal income tax during the specified period

1.1.6 Retirement and other employees Benefits:

i) Retirement benefit in tne form of provident fund & superannunaation /pension schemes, are defined contributions scheme and are charged to Profit & Loss account of the year when the contributions to the respective funds are due.

ii) Gratuity Liability is a defined benefit obligations, The Company has taken an insurance policy under Group Gratuity Scheme with Life Insurance Corporation of India to cover the gratuity liability of the employees and amount paid / payable in respect of present value of liability for past services is charged to Profit & Loss account on the basis of actuarial valuation on the projected unit credit method made at the end of financial year.

iii) Long term compensated absences are provided for based on actuarial valuation at the end of the financial year. The actuarial valuation is done as per projected unit credit method.

iv) Actuarial gains / losses are immediately taken to Profit & Loss Account and are not deferred.

1.1.7 Investments:

Investments are stated at cost of acquisition less any provision for diminution in value.

1.1.8 Foreign Currency Transactions:

i) Foreign Currency transactions are accounted at exchange rates prevailing on the date of transactions. Monetary items denominated in foreign currency & outstanding at the balance sheet date are translated at the exchange rate prevailing on that date. In case of forward exchange contracts, the difference between the yearend rate & rate on the date of the contract is recognized as exchange difference & the premium paid on forward contracts is recognized over the life of the contract. Exchange differences arising on foreign currency transactions are accounted in the period in which they arise.

ii) Derivative instruments & hedge accounting:

The company uses foreign currency forward contracts and currency options to hedge its risk associated with foreign currency fluctuations relating to certain firm commitments and forecasted transactions. The Company designates these hedging instruments as cash flow hedges applying the recognition and measurement principles set out in the Accounting Standard 30 "Financial Instruments: Recognition and Measurement" (AS 30).

The use of hedging instruments is governed by the Company's policy approved by the Board of Directors. The Company does not use Derivative financial instruments for speculative purposes.

Hedging instruments are initially measured at fair value, and are re-measured at subsequent reporting dates. Changes in fair value of these derivatives that are designated and effective as hedges of future cash flow are recognized directly in shareholder's fund and the ineffective portion, if any is recognized immediately in Profit and Loss Account.

Changes in the fair value of derivative financial instruments that do not qualify for hedge accounting are recognized in the profit and loss account as they arise.

Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or no longer qualifies for hedge accounting. At the time for forecasted transaction any cumulative gain or loss on the hedging instrument recognized in shareholder's fund is retained there until, the forecasted transaction occurs. If a hedge transaction is no longer expected to occur, the net cumulative gain or loss recognized in reserves is transferred to Profit and Loss Account.

1.1.9 Borrowing Costs:-

The interest on working capital borrowed is charged against the profits for the year in which it is incurred. Interest on borrowing for capital asset is capitalized till the date of commencement of commercial use of the asset. Borrowing Cost also includes exchange differences arising from foreign currency borrowings to the extent that they are relating to interest component.

1.1.10 Valuation of Inventory:

i) Raw material is valued at lower of moving weighted average cost(Net off Cenvat) & net realizable value. However material held for use in the production of inventories are not written down below cost, if the finished product in which they will be incorporated are expected to be sold at or above cost.

ii) Work in Progress is valued at weighted average cost.

iii) Finished goods are valued at lower of weighted average cost and net realizable value. Cost for this purpose includes direct cost, attributable overheads and excise duty. Doors are valued at moving weighted average cost. Pipes & other items meant for resale are valued at cost or net realizable value whichever is lower.

iv) Stores & spares are valued at moving weighted average.

v) In the opinion of the management the value of scrap and rejected material is nil and hence the same is not taken in inventories.

1.1.11 Revenue recognition

I) Sale: The sale of product is accounted for net of Sales Tax but including excise duty recovered on transfer of title of goods to the customer,

II) Export incentive receivable are accounted as accrued as and when finally quantified by appropriate authorities.

III) Debit / Credit arising out of revisions in prices of supplies, breakages and other claims are accounted for, in the year of its acceptance.

IV Carbon credit entitlement In process of generation of wind power the company also generate carbon emission reduction units which may be negotiated for price in international market under Clean Development Mechanism(CDM) subject to completing formalities and obtaining certificate of Carbon Emission Reduction(CER) as per Kyoto Protocol. In addition company also explore the possibilities of negotiating Voluntary Emission Reduction (VER) in respect of some to the Company's wind power generation projects. Revenue from CER and VER is accounted on its realization.

1.1.12 Provisions

A provision is recognized when there is a present obligation as a result of past event & it is probable that an outflow of resources will be required to settle the obligation & in respect of which a reliable estimate can be made. These are reviewed at each Balance sheet date & adjusted to reflect the current best estimates.

1.1.13 Lease:-

Operating lease - Leases where lessor effectively retains substantially all the risks & benefits of ownership of the leased assets are classified as Operating leases. Operating lease charges are recognized as an expenses in the Profit & Loss account on a straight line basis over the lease term.

Finance lease - Leases under which the company assumes substantially all the risks and rewards of ownership are classified as finance leases. The lower of fair value of asset and present minimum lease rentals is capitalized as fixed assets with corresponding amounts shown as lease liability. The principle component in the lease rentals is adjusted against lease liability and interest component is charged to Profit & Loss account.

1.1.14 Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates & assumptions that affect the reported amounts of assets & liabilities at the date of the financial statements and the reported amounts of revenues and the expenses during the reporting period. Differences between actual results and estimates are recognized in the period in which the results are known/materialized.

1.1.15 Impairment of Assets

The carrying amount of assets are reviewed at each Balance Sheet date for impairment based on internal / external factors. An asset is impaired when the carrying amount of the asset exceeds the recoverable amount. An impairment loss is charged to the Profit & Loss account in the year in which an asset is identified as impaired. An impairment loss recognized in prior accounting periods is reversed if there has been change in the estimate of the recoverable amount.


Mar 31, 2011

A) Basis of Accounting :

The accounts are prepared under historical cost convention and on accrual basis of accounting unless otherwise stated and in accordance with normally accepted accounting principles and comply with accounting standards as notified by the Companies (Accounting Standards) Rules, 2006.

b) Fixed Assets :

Fixed assets are stated at cost less accumulated depreciation. Cost of acquisition is inclusive of freight, non refundable duties and taxes, incidental expenses if any.

c) Intangible assets:-

Intangible assets are stated at cost of acquisition less accumulated amortization

d) Depreciation/ Amortization :

i) Depreciation on fixed assets has been provided to the extent of depreciable assets on written down value method at the rates and in the manner prescribed in schedule XIV in the Company's Act, 1956 over their useful life except on fixed assets installed on Gujrat factory & Windmills installed at Chavaneshwar wherein depreciation is provided on straight line method in the manner prescribed in schedule XIV of Company's Act,1956 over their useful life.

ii) Lease hold land is amortized over the period of lease.

iii) Windmill rights are amortized over period of 10 years.

e) Provision for Taxation & Deferred Tax :

i)Provision for current income tax is made on the assessable income at the tax rate applicable to the relevant assessment year, net off Minimum Alternate Tax credit available u/s 115JB of the Income Tax Act, 1961

ii) Deferred income taxes are recognized for the future tax consequences attributable to timing differences between the financial statement determination of income and their recognition for the tax purpose. The effect on deferred tax assets and liabilities of a change in tax rates is recognized as income using the tax rates and tax laws that have enacted or substantively enacted by the balance sheet date. Deferred tax assets are recognized and carried forward only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized

MAT Credit is recognized as an asset only when & to the extent there is convincing evidence that the Company will pay normal income tax during the specified year. In the year in which the minimum alternative tax(MAT) credit becomes eligible to be recognised as an asset in accordance with the recommendations contained in the Guidance Note issued by the Institute of Chartered Accountants of India,the said asset is created by way of it credit to the Profit & Loss account & shown as MAT credit entitlement. The Company review's the same at each balance Sheet date & drags down the carrying amount of MAT Credit entitlement to the extent there is no longer convincing evidence to the effect that the company will pay normal income tax during the specified period

f) Retirement and other employees Benefits :

i) Retirement benefit in the form of provident fund & super annunciation /pension schemes, are defined contributions scheme and are charged to Profit & Loss account of the year when the contributions to the respective funds are due.

ii) Gratuity Liability is a defined benefit obligations. The Company has taken an insurance policy under Group Gratuity Scheme with Life Insurance Corporation of India to cover the gratuity liability of the employees and amount paid / payable in respect of present value of liability for past services is charged to Profit & Loss's account on the basis of actuarial valuation on the projected unit credit method made at the end of financial year.

iii) Long term compensated absences are provided for based on actuarial valuation at the end of the financial year.

The actuarial valuation is done as per projected unit credit method.

iv) Actuarial gains / losses are immediately taken to Profit & Loss Account and are not deferred.

v) Liability for employees leave encashment amounting to Rs.8,801,063/- have been provided in the account for the current year.

g) Investments :

Investments are stated at cost of acquisition less any provision for diminution in value.

h) Foreign Currency Transactions :

i) Foreign Currency transactions are accounted at exchange rates prevailing on the date of transactions. Monetary items denominated in foreign currency & outstanding at the balance sheet date are translated at the exchange rate prevailing on that date. Exchange differences arising on foreign currency transactions are accounted in the period in which they arise.

ii) Derivative instruments & hedge accounting :

The company uses foreign currency forward contracts and currency options to hedge its risk associated with foreign currency fluctuations relating to certain firm commitments and forecasted transactions. The Company designates these hedging instruments as cash flow hedges applying the recognition and measurement principles set out in the Accounting Standard 30 "Financial Instruments : Recognition and Measurement" (AS 30).

The use of hedging instruments is governed by the Company's policy approved by the Board of Directors.

The Company does not use Derivative financial instruments for speculative purposes.

Hedging instruments are initially measured at fair value, and are re-measured at subsequent reporting dates . Changes in fair value of thse derivatives that are designated and effective as hedges of future cashflow are recognized directly in shareholder's fund and the ineffective portion, if any is recognized immediately in Profit and Loss Account.

Changes in the fair value of derivative financial instruments that do not qualify for hedge accounting are recognized in the profit and loss account as they arise.

Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or no longer qualifies for hedge accounting. At the time for forecasted transaction any cumulative gain or loss on the hedging instrument recognized in shareholder's fund is retained there until, the forecasted transaction occurs If a hedge transaction is no longer expected to occur, the net cumulative gain or loss recognized in reserves is transferred to Profit and Loss Account.

i) Borrowing Costs :-

The interest on working capital borrowed is charged against the profits for the year in which it is incurred. Interest on borrowing for capital asset is capitalized till the date of commencement of commercial use of the asset. Borrowing Cost also includes exchange differences arising from foreign currency borrowings to the extent that they are relating to interest component.

j) Valuation of Inventory :

i) Raw material is valued at lower of moving weighted average cost(Net off Cenvat) & net realizable value. However material held for use in the production of inventories are not written down below cost, if the finished product in which they will be incorporated are expected to resold at or above cost.

ii) Work in Progress is valued at weighted average cost.

iii) Finished goods are valued at lower of weighted average cost and net realizable value. Cost for this purpose includes direct cost, attributable overheads and excise duty. Doors are valued at moving weighted average cost, Pipes & other items meant for resale are valued at cost or net realizable value whichever is lower.

iv) Stores,spares and promotional materials are valued at moving weighted average.

v) In the opinion of the management the value of scrap and rejected material is nil and hence the same is not taken in inventories.

k ) Revenue recognition

I) Sale: The sale of fibre sheet & products was accounted for net of Sales Tax but including excise duty recovered on transfer of title of goods to the customer.

II) Export incentive receivable are accounted as accrued as and when finally quantified by appropriate authorities.

III) Debit / Credit arising out of revisions in prices of supplies,breakages and other claims are accounted for, in the year of its acceptance.

IV)Carbon credit entitlement :- In process of generation of wind power, the company also generate carbon emission reduction units which may be negotiated for price in international market under Clean Development Mechanism(CDM) subject to completing formalities and obtaining certificate of Carbon Emission Reduction(CER) as per Kyoto Protocol. In addition company also explore the possibilities of negotiating Voluntary Emission Reduction (VER) in respect of

some of the Company's wind power generation projects. Revenue from CER and VER is accounted on its realization.

l ) Provisions :-

A provision is recognized when there is a present obligation as a result of past event. It is probable that an outflow of resources will be required to settle the obligation & in respect of which a reliable estimate can be made. These are reviewed at each Balance sheet date & adjusted to reflect the current best estimates.

m) Lease :-

Operating lease – Leases where lessor effectively retains substantially all the risks & benefits of ownership of the leased assets are classified as Operating leases. Operating lease charges are recognized as an expenses in the Profit & Loss account on a straight line basis over the lease term.

Finance lease – Leases under which the company assumes substantially all the risks and rewards of ownership are classified as finance leases. The lower of fair value of asset and present minimum lease rentals is capitalized as fixed assets with corresponding amounts shown as lease liability. The principle component in the lease rentals is adjusted against lease liability and interest component is charged to Profit & Loss account.

n) Use of Estimates :-

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates & assumptions that affect the reported amounts of assets & liabilities at the date of the financial statements and the reported amounts of revenues and the expenses during the reporting period. Differences between actual results and estimates are recognized in the period in which the results are known/materialized

o) Impairment of Assets :-

The carrying amount of assets are reviewed at each Balance Sheet date if there is any indication of impairment based on internal / external factors. An asset is impaired when the carrying amount of the asset exceeds the recoverable amount. An impairment loss is charged to the Profit & Loss account in the year in which an asset is identified as impaired. An impairment loss recognized in prior accounting periods is reversed if there has been change in the estimate of the recoverable amount.

p) No liability has been provided in respect of garlic activities for additional demand likely to be raised by MADHYA PRADESH STATE CO-OPERATIVE MARKETING FEDERATION LTD. and may not be acceptable to the company, and in the case it is made obligatory the liability to be shared by the parties to the business arrangements. Total amount of estimate of liability Rs.21,000,000/- .


Mar 31, 2010

A) Basis of Accounting :

The accounts are prepared under historical cost convention and on accrual basis of accounting unless otherwise stated and in accordance with normally accepted accounting principles and comply with accounting standards as notified by the Companies (Accounting Standards) Rules, 2006.

b) Fixed Assets :

Fixed assets are stated at cost less accumulated depreciation. Cost of acquisition is inclusive of freight, non refundable duties and taxes, incidental expenses if any.

c) Intangible assets:-

Intangible assets are stated at cost of acquisition less accumulated amortization.

d) Depreciation/ Amortization :

i) Depreciation has been provided at the rate prescribed under Schedule XIV of the Companies Act,1956 on written down value method.

ii) Lease hold land is amortized over the period of lease.

iii) Windmill rights are amortized over the period of 10 years.

e) Provision for Taxation & Deferred Tax :

i) Provision for current income tax is made on the assessable income at the tax rate applicable to the relevant assessment year, net off Minimum Alternate Tax credit available u/s 115JB of the Income Tax Act, 1961.

ii) Deferred income taxes are recognized for the future tax consequences attributable to timing differences between the financial statement determination of income and their recognition for the tax purpose. The effect on deferred tax assets and liabilities of a change in tax rates is recognized as income using the tax rates and tax laws that have enacted or substantively enacted by the balance sheet date. Deferred tax assets are recognized and carried forward only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

f) Retirement and other employees Benefits :

i) Retirement benefit in the form of provident fund & super annunciation /pension schemes, are defined contributions scheme and are charged to Profit & Loss account of the year when the contributions to the respective funds are due.

ii) Gratuity Liability is a defined benefit obligations. The Company has taken an insurance policy under Group Gratuity Scheme with Life Insurance Corporation of India to cover the gratuity liability of the employees and amount paid / payable in respect of present value of liability for past services is charged to Profit & Losss account on the basis of actuarial valuation on the projected unit credit method made at the end of financial year.

iii) Long term compensated absences are provided for based on actuarial valuation at the end if the financial year.

The actuarial valuation is done as per projected unit credit method.

iv) Actuarial gains / losses are immediately taken to Profit & Loss Account and are not deferred.

v) Liability for employees leave encasement amounting to Rs.6868790/- have been provided in the account for the current year.

g) Investments :

Investments are stated at cost of acquisition less any provision for diminution in value.

h) Foreign Currency Transactions :

i) Foreign Currency transactions are accounted at exchange rates prevailing on the date of transactions. Monetary items denominated in foreign currency & outstanding at the balance sheet date are translated at the exchange rate prevailing on that date. Exchange differences arising on foreign currency transactions are accounted in the period in which they arise.

ii) Derivative instruments & hedge accounting :

The company uses foreign currency forward contracts and currency options to hedge its risk associated with foreign currency fluctuations relating to certain firm commitments and forecasted transactions The Company designates these hedging instruments as cash flow hedges applying the recognition and measurement principles set out in the Accounting Standard 30 "Financial Instruments : Recognition and Measurement" (AS 30).

The use of hedging instruments is governed by the Companys policy approved by the Board of Directors.The Company does not use Derivative financial instruments for speculative purposes.

Hedging instruments are initially measured at fair value, and are re-measured at subsequent reporting dates. Changes in fair value of thse derivatives that are designated and effective as hedges of future cash flow are recognized directly in shareholders fund and the ineffective portion, if any is recognized immediately in Profit and Loss Account.

Changes in the fair value of derivative financial instruments that do not qualify for hedge accounting are recognized in the profit and loss account as they arise.

Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or no longer qualifies for hedge accounting. At the time for forecasted transaction any cumulative gain or loss on the hedging instrument recognized in shareholders fund is retained there until, the forecasted transaction occurs If a hedge transaction is no longer expected to occur, the net cumulative gain or or loss recognized in reserves is transferred to Profit and Loss Account.

i) Borrowing Costs :-

The interest on working capital borrowed is charged against the profits for the year in which it is incurred. Interest on borrowing for capital asset is capitalized till the date of commencement of commercial use of the asset. Borrowing Cost also includes exchange differences arising from foreign currency borrowings to the extent that they are relating to interest component.

j) Valuation of Inventory :

i) Raw material is valued at lower of moving weighted average cost(Net off Cenvat) & net realizable value. However material held for use in the production of inventories are not written down below cost, if the finished product in which they will be incorporated are expected to resold at or above cost.

ii) Work in Progress is valued at weighted average cost.

iii) Finished goods are valued at lower of weighted average cost and net realizable value. Cost for this purpose includes direct cost, attributable overheads and excise duty. Doors are valued at moving weighted average cost . Pipes & other items meant for resale are valued at cost or net realizable value whichever is lower.

iv) Stores,spares and promotional materials are valued at moving weighted average. v) In the opinion of the management the value of scrap and rejected material is nil and hence the same is not taken in inventories.

k ) Revenue recognition

i) Sale: The sale of fibre sheet & products was accounted for net of Sales Tax but including excise duty recovered o n transfer of title of goods to the customer.

ii) Export incentive receivable are accounted as accrued as and when finally quantified by appropriate authorities.

iii) Debit / Credit arising out of revisions in prices of supplies,breakages and other claims are accounted for,in the year of its acceptance.

iv) Carbon credit entitlement :- In process of generation of wind power the company also generate carbon emission reduction units which may be negotiated for price in international market under Clean Development Mechanism(CDM) subject to completing formalities and obtaining certificate of Carbon Emission Reduction(CER)as per Kyoto Protocol. In addition company also explore the possibilities of negotiating Voluntary Emission Reduction (VER) in respect of some of the Company;s wind power generation projects.

Revenue from CER and VER is accounted on its realization

l ) Provisions :-

A provision is recognized when there is a present obligation as a result of past event. It is probable that an outflow of resources will be required to settle the obligation & in respect of which a reliable estimate can be made. These are reviewed at each Balance sheet date & adjusted to reflect the current best estimates.

m ) Lease :-

Operating lease - Leases where lessor effectively retains substantially all the risks & benefits of ownership of the leased assets are classified as operating leases. Operating lease charges are recognized as an expenses in the Profit & Loss account on a straight line basis over the lease term.

Finance lease - Leases under which the company assumes substantially all the risks and rewards of ownership are classified as finance leases. The lower of fair value of asset and present minimum lease rentals is capitalized as fixed assets with corresponding amounts shown as lease liability. The principle component in the lease rentals is adjusted against lease liability and interest component is charged to Profit & Loss account.

n) Use of Estimates :-

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates & assumptions that affect the reported amounts of assets & liabilities at the date of the financial statements and the reported amounts of revenues and the expenses during the reporting period. Differences between actual results and estimates are recognized in the period in which the results are known/materialized.

o) Impairment of Assets :-

The carrying amount of assets are reviewed at each Balance Sheet date if there is any indication of impairment based on internal / external factors. An asset is impaired when the carrying amount of the asset exceeds the recoverable amount. An impairment loss is charged to the Profit & Loss account in the year in which an asset is identified as impaired. An impairment loss recognized in prior accounting periods is reversed if there has been change in the estimate of the recoverable amount.

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