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Accounting Policies of Savita Oil Technologies Ltd. Company

Mar 31, 2015

(a) Basis of Accounting:

These financial statements have been prepared in accordance with the generally accepted accounting principles in India, on the accrual and going concern basis under the historical cost convention except revaluation of certain Fixed Assets. The Company has prepared these financial statements to comply, in all material aspects, with the Accounting Standards notified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013. In accordance with first proviso to section 129(1) of the Companies Act, 2013, the items contained in these financial statements are in accordance with the Accounting Standards as referred to therein.

(b) Basis of preparation of financial statements:

All assets and liabilities have been classified as current or non-current as per the Company's normal operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013. For the above purposes, the Company has determined the operating cycle based on the nature of products and the time between the acquisition of inputs for manufacturing and their realisation in cash and cash equivalents.

(c) Use of Estimates:

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

(d) Fixed Assets, Capital Work-in-progress, Depreciation and Amortisation:

i) Fixed Assets are shown at cost (net of Cenvat and Value Added Tax set off) or at revalued amount less accumulated depreciation. Projects under construction are carried at costs comprising of direct costs, related pre-operational incidental expenses and attributable interest.

ii) a) Leasehold land is amortised over the residual lease period.

b) Depreciation on tangible assets is provided as per written down value method based on useful life prescribed under Schedule II to the Companies Act, 2013.

c) Intangible assets are amortised over the estimated period of future economic benefit of the asset or a period of ten years, whichever is lower.

(e) Borrowing Costs:

Borrowing costs are charged to Statement of Profit and Loss except to the extent attributable to acquisition/construction of qualifying assets.

(f) Impairment of Assets:

At each Balance Sheet date, the Company assesses whether there is any indication that the asset may be impaired. If any such indication exists, the Company estimates the recoverable amount. If the carrying amount of the asset exceeds its recoverable amount / value in use, an impairment loss is recognised in the Statement of Profit and Loss to the extent the carrying amount exceeds recoverable amount. In assessing the value in use, the estimated future cash flows are discounted at present value at the weighted average cost of capital.

(g) Investments:

Long-term Investments are stated at cost less provision for diminution other than temporary, if any, in value. Current investments are stated at lower of cost and net realisable value.

(h) Inventories:

Inventories are valued at lower of cost and net realisable value, on weighted average basis. The cost includes cost of conversion and other costs incurred in bringing them to present location and condition.

(i) Recognition of Income and Expenditure:

i) Income and expenditure are accounted on accrual basis. Income in respect of insurance / other claims, interest, commission, etc. is recognised when it is reasonably certain that the ultimate collection will be made.

ii) Domestic sales are accounted on dispatch of goods to customers. Export sales are accounted on the basis of date of bill of lading. Gross Sales include Excise duty but exclude Value Added Tax / Central Sales Tax and are net of trade discounts.

iii) Incentives for renewable energy generation are recognised as income on sale of such incentives.

iv) Purchases are net of Value Added Tax set off and Cenvat wherever applicable, but include inward freight. Import purchases are accounted on the basis of date of bill of lading.

(j) Expenditure on Research and Development:

Revenue expenditure on Research and Development is charged to Statement of Profit and Loss under the appropriate heads of expenses. Capital expenditure is accounted as fixed assets.

(k) Foreign Currency Transactions:

i) Foreign currency transactions are accounted at the exchange rate prevailing on the date of transaction. Monetary assets and liabilities are translated at year end rate of exchange. The difference on account of fluctuation in the rate of exchange is dealt within the Statement of Profit and Loss.

ii) In case of forward contracts, the difference between the year end rate of exchage and the spot rate at the inception of these contracts is recognised as income or expenditure in the Statement of Profit and Loss. Net mark to market losses on outstanding option / derivative contracts are recognised in the Statement of Profit and Loss and gains, if any, are ignored. The premium / discounts on these contracts are accounted in the Statement of Profit and Loss over the life of the contracts.

iii) Profit or loss arising on cancellation or renewal of forward / option contracts is accounted as income or expenditure for the period.

(l) Employee benefits:

i) Short-term employee benefits (benefits which are payable within twelve months after the end of the period in which employees render service) are measured at cost.

ii) Long-term employee benefits (benefits which are payable after the end of twelve months, after the end of the period in which employees render service) and post employment benefits (benefits which are payable on completion of employment) are measured on a discounted basis by the Projected Unit Credit Method on the basis of actuarial valuation annually.

iii) Contributions to Provident Fund, a defined contribution plan, are made in accordance with the statute, and are recognised as an expense when employees have rendered service entitling them to the contributions.

iv) The eligible employees can accumulate un-availed privilege leave and are entitled to encash the same either while in employment, on termination or on retirement in accordance with the Company's policy. The present value of such un-availed leave is measured using the Projected Unit Credit Method, with actuarial valuations being carried out at each Balance Sheet date.

v) The cost of providing gratuity, a defined benefit plan, is determined using the Projected Unit Credit Method, on the basis of actuarial valuation at each Balance Sheet date. The gratuity benefit obligation recognised in Balance Sheet represents the present value of the obligation as reduced by the fair value of plan assets. Actuarial gains and losses are recognised in the Statement of Profit and Loss.

(m) Leases:

Leases, where the lessor effectively retains substantially all the rights and benefits of ownership of the leased assets, are classified as operating leases. Lease payments under operating leases are recognised as an expense in the Statement of Profit and Loss.

(n) Taxation:

i) Current tax is determined as the amount of tax payable in respect of taxable income for the year.

ii) Deferred tax is recognised on timing difference between accounting income and the taxable income for the year and quantified using tax rates and laws enacted or substantively enacted as at the Balance Sheet date. Deferred tax assets are recognised subject to consideration of prudence.

(o) Segment Reporting:

The Company prepares segment information in conformity with its accounting policies. Segment revenue and expenditure directly identifiable with / allocable to respective segments are considered for determining segment results. Income and expenditure not allocable to segments is reported under 'Other unallocated revenue / expenditure'. Segment assets and liabilities include those directly identifiable with the respective segments. Unallocable assets and liabilities are included under 'Unallocated capital employed'.

(p) Earnings Per Share:

Basic earnings per share is calculated by dividing the net profit or loss for the year after tax attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. The weighted average number of equity shares outstanding during the year is adjusted for events, if any, such as bonus issue, bonus elements in a rights issue to existing shareholders, shares split and reverse shares split (consolidation of shares). For the purpose of calculating diluted earnings per share, the net profit or loss for the year after tax attributable to equity shareholders and the weighted average number of equity shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

(q) Provisions:

Provisions are recognised when the Company has a present obligation as a result of past events, for which it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate of the amount can be made. Contingent liability is disclosed when the Company has a possible or a present obligation where it is not probable that an outflow of resources will be required to settle it. Contingent assets are neither recognised nor disclosed.


Mar 31, 2013

(a) Basis of Accounting:

The accounts are prepared under historical cost convention on an accrual basis except revaluation of certain Fixed Assets and are in conformity with the requirements of Accounting Standards prescribed by the Companies (Accounting Standards) Rules, 2006 and the provisions of the Companies Act, 1956.

(b) Basis of preparation of fnancial statements:

All assets and liabilities have been classifed as current or non-current as per the Company''s normal operating cycle and other criteria set out in the Schedule VI to the Companies Act, 1956. For the above purposes, the Company has determined the operating cycle based on the nature of products and the time between the acquisition of inputs for manufacturing and their realisation in cash and cash equivalents.

(c) Use of Estimates:

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

(d) Fixed Assets, Capital Work-in-progress, Depreciation and Amortisation: (Refer Note 10)

i) Fixed Assets are shown at cost (net of Cenvat and Value Added Tax set off) or at revalued amount less accumulated depreciation. Projects under construction are carried at costs comprising of direct costs, related pre-operational incidental expenses and attributable interest.

ii) a) Leasehold land is amortised over the residual lease period.

b) Depreciation on tangible assets is provided as per written down value method at the rates prescribed under Schedule XIV to the Companies Act, 1956.

c) Intangible assets are amortised over the estimated period of future economic beneft of the asset or a period of ten years, whichever is lower.

(e) Borrowing Costs: (Refer Note 26)

Borrowing costs are charged to Statement of Proft and Loss except to the extent attributable to acquisition/construction of qualifying assets.

(f) Impairment of Assets:

At each Balance Sheet date, the Company assesses whether there is any indication that the asset may be impaired. If any such indication exists, the Company estimates the recoverable amount. If the carrying amount of the asset exceeds its recoverable amount / value in use, an impairment loss is recognised in the Statement of Proft and Loss to the extent the carrying amount exceeds recoverable amount. In assessing the value in use, the estimated future cash fows are discounted at present value at the weighted average cost of capital.

(g) Investments: (Refer Note 11 and 15)

Long-term Investments are stated at cost less provision for diminution other than temporary, if any, in value. Current investments are stated at lower of cost and net realisable value.

(h) Inventories: (Refer Note 16 and 22)

Inventories are valued at lower of cost and net realisable value, on weighted average basis. The cost includes cost of conversion and other costs incurred in bringing them to present location and condition.

(i) Recognition of Income and Expenditure:

i) Income and expenditure are accounted on accrual basis. Income in respect of insurance / other claims, interest, commission, etc. is recognised when it is reasonably certain that the ultimate collection will be made.

ii) Domestic sales are accounted on dispatch of goods to customers. Export sales are accounted on the basis of date of bill of lading. Gross Sales include Excise duty but exclude Value Added Tax/ Central Sales Tax and are net of trade discounts.

iii) Incentives for renewable energy generation are recognised as income on sale of such incentives.

iv) Purchases are net of Value Added Tax set off and Cenvat wherever applicable, but include inward freight. Import purchases are accounted on the basis of date of bill of lading.

(j) Expenditure on Research and Development:

Revenue expenditure on Research and Development is charged to Statement of Proft and Loss under the appropriate heads of expenses. Capital expenditure is accounted as fxed assets.

(k) Foreign Currency Transactions:

i) Foreign currency transactions are accounted at the exchange rate prevailing on the date of transaction.

ii) Monetary assets and liabilities are translated at year end rate of exchange.

iii) In case of forward and option contracts, premium is accounted in the Statement of Proft and Loss over the life of the contracts.

iv) Proft or loss arising on cancellation or renewal of forward / option exchange contracts is accounted as income or expenditure for the period

v) The difference on account of fuctuation in the rate of exchange is dealt within the Statement of Proft and Loss.

(l) Employee benefts:

i) Short-term employee benefts (benefts which are payable within twelve months after the end of the period in which employees render service) are measured at cost.

ii) Long-term employee benefts (benefts which are payable after the end of twelve months in which employees render service) and post employment benefts (benefts which are payable on completion of employment) are measured on a discounted basis by the Projected Unit Credit Method on the basis of actuarial valuation annually.

iii) Contributions to Provident Fund, a defned contribution plan, are made in accordance with the statute, and are recognised as an expense when employees have rendered service entitling them to the contributions.

iv) The eligible employees can accumulate un-availed privilege leave and are entitled to encash the same either while in employment, on termination or on retirement in accordance with the Company''s policy. The present value of such un-availed leave is measured using the Projected Unit Cost Method, with actuarial valuations being carried out at each Balance Sheet date.

v) The cost of providing gratuity, a defned beneft plan, is determined using the Projected Unit Credit Method, on the basis of actuarial valuation at each Balance Sheet date. The gratuity beneft obligation recognised in Balance Sheet represents the present value of the obligation as reduced by the fair value of plan assets. Actuarial gains and losses are recognised in the Statement of Proft and Loss.

(m) Leases:

Leases where the lessor effectively retains substantially all the rights and benefts of ownership of the leased assets are classifed as operating leases. Lease payments under operating leases are recognised as an expense in the Statement of Proft and Loss.

(n) Taxation:

i) Current tax is determined as the amount of tax payable in respect of taxable income for the year.

ii) Deferred tax is recognised on timing difference between accounting income and the taxable income for the year and quantifed using tax rates and laws enacted or substantively enacted as at the Balance Sheet date. Deferred tax assets are recognised subject to consideration of prudence.

(o) Segment Reporting:

The Company prepares segment information in conformity with its accounting policies. Segment revenue and expenditure directly identifable with / allocable to respective segments are considered for determining segment results. Income and expenditure not allocable to segments is reported under ''Other unallocated revenue / expenditure''. Segment assets and liabilities include those directly identifable with the respective segments. Unallocable assets and liabilities are included under ''Unallocated capital employed''.

(p) Earnings Per Share:

Basic earnings per share is calculated by dividing the net proft or loss for the year after tax attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. The weighted average number of equity shares outstandings during the year is adjusted for events, if any, such as bonus issue, bonus elements in a rights issue to existing shareholders, shares split and reverse shares split (consolidation of shares). For the purpose of calculating diluted earnings per share, the net proft or loss for the year after tax attributable to equity shareholders and the weighted average number of equity shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

(q) Provisions:

Provisions are recognised when the Company has a present obligation as a result of past events, for which it is probable that an outfow of resources will be required to settle the obligation and a reliable estimate of the amount can be made. Contingent liability is disclosed when a Company has a possible or a present obligation where it is not probable that an outfow of resources will be required to settle it. Contingent assets are neither recognised nor disclosed.


Mar 31, 2012

(a) Basis of Accounting:

The accounts are prepared under historical cost convention on an accrual basis except revaluation of certain Fixed Assets and are in conformity with the requirements of Accounting Standards prescribed by the Companies (Accounting Standards) Rules, 2006 and the provisions of the Companies Act, 1956.

(b) Basis of preparation of financial statements:

All assets and liabilities have been classified as current or non-current as per the Company's normal operating cycle and other criteria set out in the Schedule VI to the Companies Act, 1956. For the above purposes, the Company has determined the operating cycle based on the nature of products and the time between the acquisition of inputs for manufacturing and their realisation in cash and cash equivalents.

(c) Use of Estimates:

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

(d) Fixed Assets, Depreciation and Amortisation: (Refer Note 10)

i) Fixed Assets are shown at cost (net of Cenvat and Value Added Tax set off) or at revalued amount less accumulated depreciation.

ii) a) Leasehold land is amortised over the residual lease period.

b) Intangible assets are amortised over the estimated period of future economic benefit of the asset or a period of ten years, whichever is lower.

c) Depreciation on assets other than stated at a) and b) above, is provided as per written down value method at the rates prescribed under Schedule XIV to the Companies Act, 1956.

(e) Borrowing Costs: (Refer Note 26)

Borrowing costs are charged to Statement of Profit and Loss except to the extent attributable to acquisition/construction of qualifying assets.

(f) Impairment of Assets:

At each Balance Sheet date, the Company assesses whether there is any indication that the asset may be impaired. If any such indication exists, the Company estimates the recoverable amount. If the carrying amount of the asset exceeds its recoverable amount / value in use, an impairment loss is recognised in the Statement of Profit and Loss to the extent the carrying amount exceeds recoverable amount. In assessing the value in use, the estimated future cash flows are discounted at present value at the weighted average cost of capital.

(g) Investments: (Refer Note 11 and 15)

Long - term Investments are stated at cost less provision for diminution other than temporary, if any, in value. Current investments are stated at lower of cost and net realisable value.

(h) Inventories: (Refer Note 16 and 22)

Inventories are valued at lower of cost and net realisable value, on weighted average basis. The cost includes cost of conversion and other costs incurred in bringing them to present location and condition.

(i) Recognition of Income and Expenditure:

i) Income and expenditure are accounted on accrual basis. Income in respect of insurance / other claims, interest, commission, etc. is recognised when it is reasonably certain that the ultimate collection will be made.

ii) Domestic sales are accounted on dispatch of goods to customers. Export sales are accounted on the basis of date of bill of lading. Gross Sales include excise duty but exclude Value Added Tax/ Central Sales Tax and are net of trade discounts.

iii) Incentives for renewable energy generation are recognised as income on sale of such incentives.

iv) Purchases are net of Value Added Tax set off and cenvat wherever applicable, but include inward freight. Import purchases are accounted on the basis of date of bill of lading.

(j) Expenditure on Research and Development:

Revenue expenditure on Research and Development is charged to revenue under the appropriate heads of expenses.

Capital expenditure is accounted as fixed assets.

(k) Foreign Currency Transactions:

i) Foreign currency transactions are accounted at the exchange rate prevailing on the date of transaction.

ii) Monetary assets and liabilities are translated at year end rate of exchange.

iii) In case of forward contracts, the difference between the rate at which the transactions are accounted and the contracted rate is spread over the life of the contract.

iv) The difference on account of fluctuation in the rate of exchange is dealt with in the Statement of Profit and Loss.

(l) Employee benefits:

i) Short-term employee benefits (benefits which are payable within twelve months after the end of the period in which employees render service) are measured at cost.

ii) Long-term employee benefits (benefits which are payable after the end of twelve months in which employees render service) and post employment benefits (benefits which are payable on completion of employment) are measured on a discounted basis by the Projected Unit Credit Method on the basis of actuarial valuation annually.

iii) Contributions to Provident Fund, a defined contribution plan, are made in accordance with the statute, and are recognised as an expense when employees have rendered service entitling them to the contributions.

iv) The eligible employees can accumulate un-availed privilege leave and are entitled to encash the same either while in employment, on termination or on retirement in accordance with the Company's policy. The present value of such un-availed leave is measured using the Projected Unit Cost Method, with actuarial valuations being carried out at each Balance Sheet date.

v) The cost of providing gratuity, a defined benefit plan, is determined using the Projected Unit Credit Method, on the basis of actuarial valuation at each Balance Sheet date. The gratuity benefit obligation recognised in Balance Sheet represents the present value of the obligation as reduced by the fair value of plan assets. Actuarial gains and losses are recognised in the Statement of Profit and Loss.

(m) Leases:

Leases where the lessor effectively retains substantially all the rights and benefits of ownership of the leased assets are classified as operating leases. Lease payments under operating leases are recognised as an expense in the Statement of Profit and Loss.

(n) Taxation:

i) Current tax is determined as the amount of tax payable in respect of taxable income for the year.

ii) Deferred tax is recognised on timing difference between accounting income and the taxable income for the year and quantified using tax rates and laws enacted or substantively enacted as at the Balance Sheet date. Deferred tax assets are recognised subject to consideration of prudence.

(o) Segment Reporting:

The Company prepares segment information in conformity with its accounting policies. Segment revenue and expenditure directly identifiable with / allocable to respective segments are considered for determining segment results. Income and expenditure not allocable to segments is reported under 'Other unallocated revenue / expenditure'. Segment assets and liabilities include those directly identifiable with the respective segments. Unallocable assets and liabilities are included under 'Unallocated capital employed'.

(p) Earnings Per Share:

Basic earnings per share is calculated by dividing the net profit or loss for the year after tax attributable to equity shareholders by the weighted average number of equity shares outstanding during the year .The weighted average number of equity shares outstandings during the year is adjusted for events, if any, such as bonus issue, bonus elements in a rights issue to existing shareholders, shares split and reverse shares split (consolidation of shares). For the purpose of calculating diluted earnings per share, the net profit or loss for the year after tax attributable to equity shareholders and the weighted average number of equity shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

(q) Provisions:

Provisions are recognised when the Company has a present obligation as a result of past events, for which it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate of the amount can be made. Contingent liability is disclosed when a company has a possible or a present obligation where it is not probable that an outflow of resources will be required to settle it. Contingent assets are neither recognised nor disclosed.


Mar 31, 2011

(a) Basis of Accounting:

The accounts are prepared under historical cost convention on an accrual basis except revaluation of certain Fixed Assets and are in conformity with the requirements of Accounting Standards prescribed by the Companies (Accounting Standards) Rules, 2006 and the provisions of the Companies Act, 1956.

(b) Use of Estimates:

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

(c) Fixed Assets and Depreciation:

i) Fixed Assets are shown at cost (net of Cenvat and Value Added Tax set off) or at revalued amount less accumulated depreciation.

ii) a) Leasehold land is amortised over the residual lease period from the financial year 2000-2001.

b) Intangible assets are amortised over the estimated period of future economic benefit of the asset or a period of ten years, whichever is lower.

c) Depreciation on assets other than stated at a) and b) above, is provided as per written down value method at the rates prescribed under Schedule XIV to the Companies Act, 1956.

(d) Borrowing Costs:

Borrowing costs are charged to Profit and Loss Account except to the extent attributable to acquisition/construction of qualifying assets.

(e) Impairment of Assets:

At each Balance Sheet date, the Company assesses whether there is any indication that the asset may be impaired. If any such indication exists, the Company estimates the recoverable amount. If the carrying amount of the asset exceeds its recoverable amount / value in use, an impairment loss is recognised in the Profit and Loss Account to the extent the carrying amount exceeds recoverable amount. In assessing the value in use, the estimated future cash flows are discounted at present value at the weighted average cost of capital.

(f) Investments:

Long term Investments are stated at cost less provision for permanent diminution, if any, in value. Current investments are stated at lower of cost or net realisable value.

(g) Inventories:

Inventories are valued at lower of cost and net realisable value, on weighted average basis. The cost includes cost of conversion and other costs incurred in bringing them to present location and condition.

(h) Recognition of Income and Expenditure:

i) Income and expenditure are accounted on accrual basis. Income in respect of insurance / other claims, interest, commission etc. is recognised when it is reasonably certain that the ultimate collection will be made.

ii) Domestic sales are accounted on dispatch of goods to customers. Export sales are accounted on the basis of date of bill of lading. Gross Sales include excise duty and exchange differences arising out of sales transactions but exclude Value Added Tax/ Central Sales Tax and are net of trade discounts.

iii) Carbon Credit i.e. Certified Carbon Emission Reductions (CERs) is certified and issued by the ultimate certifying authority viz. United Nations Framework Convention on Climate Change (UNFCCC) and recognised as income on delivery and sale of CERs.

iv) Purchases are net of Value Added Tax set off and cenvat wherever applicable, but include inward freight and exchange differences arising out of purchase transactions. Import purchases are accounted on the basis of date of bill of lading.

(i) Expenditure on Research and Development:

Revenue expenditure on Research and Development is charged to revenue under the appropriate heads of expenses. Capital expenditure is accounted as fixed assets.

(j) Foreign Currency Transactions:

i) Foreign currency transactions are accounted at the exchange rate prevailing on the date of transaction.

ii) The difference between the rate at which the transactions are accounted as stated above and the contracted rate is spread over the life of the contract. The difference on account of fluctuation in the rate of exchange is dealt with in the Profit and Loss Account.

iii) Year end monetary assets and liabilities are translated at year end rate of exchange.

(k) Employee benefits:

i) Short term employee benefits (benefits which are payable within twelve months after the end of the period in which employees render service) are measured at cost.

ii) Long term employee benefits (benefits which are payable after the end of twelve months in which employees render service) and post employment benefits (benefits which are payable on completion of employment) are measured on a discounted basis by the Projected Unit Credit Method on the basis of actuarial valuation, annually.

iii) Contributions to Provident Fund, a defined contribution plan, are made in accordance with the statute, and are recognised as an expense when employees have rendered service entitling them to the contributions.

iv) The eligible employees can accumulate un-availed privilege leave and are entitled to encash the same either while in employment, on termination or on retirement in accordance with the Company's policy. The present value of such un-availed leave is measured using the Projected Unit Cost Method, with actuarial valuations being carried out at each Balance Sheet date.

v) The cost of providing gratuity, a defined benefit plan, is determined using the Projected Unit Credit Method, on the basis of actuarial valuation at each Balance Sheet date. The gratuity benefit obligation recognised in Balance Sheet represents the present value of the obligation as reduced by the fair value of plan assets. Actuarial gains and losses are recognised in the Profit and Loss Account.

(l) Leases:

Leases where the lessor effectively retains substantially all the rights and benefits of ownership of the leased assets are classified as operating leases. Lease payments under operating leases are recognised as an expense in the Profit and Loss Account.

(m) Taxation:

i) Current tax is determined as the amount of tax payable in respect of taxable income for the year.

ii) Deferred tax is recognised on timing difference between accounting income and the taxable income for the year and quantified using tax rates and laws enacted or substantively enacted as at the Balance Sheet date. Deferred tax assets are recognised subject to consideration of prudence.

(n) Provisions:

Provisions are recognised when the Company has a present obligation as a result of past events, for which it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate of the amount can be made.


Mar 31, 2010

(a) Basis of Accounting:

The accounts are prepared under historical cost convention on an accrual basis except revaluation of certain Fixed Assets and are in conformity with the requirements of Accounting Standards prescribed by the Companies (Accounting Standards) Rules, 2006 and the provisions of the Companies Act, 1956.

(b) Use of Estimates:

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

(c) Fixed Assets and Depreciation:

i) Fixed Assets are shown at cost (net of Cenvat and Value Added Tax set off) or at revalued amount less accumulated depreciation.

ii) a) Leasehold land is amortised over the residual lease period from the financial year 2000-2001.

b) Intangible assets are amortised over the estimated period of future economic benefit of the asset or a period of ten years, whichever is lower.

c) Depreciation on assets other than stated at a) and b) above, is provided as per written down value method at the rates prescribed under Schedule XIV to the Companies Act, 1956.

(d) Borrowing Costs:

Borrowing costs are charged to Profit and Loss Account except to the extent attributable to acquisition/construction of qualifying assets.

(e) Impairment of Assets:

At each Balance Sheet date, the Company assesses whether there is any indication that the asset may be impaired. If any such indication exists, the Company estimates the recoverable amount. If the carrying amount of the asset exceeds its recoverable amount / value in use, an impairment loss is recognised in the Profit and Loss Account to the extent the carrying amount exceeds recoverable amount. In assessing the value in use, the estimated future cash flows are discounted at present value at the weighted average cost of capital.

(f) Investments:

Long term Investments are stated at cost less provision for permanent diminution, if any, in value. Current investments are stated at lower of cost or net realisable value. Investments in foreign currency are reported using the exchange rate at the date of transaction.

(g) Inventories:

Inventories are valued at lower of cost or net realisable value, on weighted average basis. The cost includes cost of conversion and other costs incurred in bringing them to present location and condition.

(h) Recognition of Income and Expenditure:

i) Income and expenditure are accounted on accrual basis. Income in respect of insurance / other claims, interest, commission, etc. is recognised when it is reasonably certain that the ultimate collection will be made.

ii) Domestic sales are accounted on dispatch of goods to customers. Export sales are accounted on the basis of date of bill of lading. Gross Sales include excise duty and exchange differences arising out of sales transactions but exclude Value Added Tax/ Central Sales Tax and are net of trade discounts.

iii) Carbon Credit i.e. Certified Carbon Emission Reductions (CERs) is recognised as entitlement upon certification and issue of CERs by the ultimate certifying authority viz. United Nations Framework Convention on Climate Change (UNFCCC) and recognised as income on delivery and sale of CERs.

iv) Purchases are net of Value Added Tax set off and cenvat wherever applicable, but include inward freight and exchange differences arising out of purchase transactions. Import purchases are accounted on the basis of date of bill of lading.

(i) Expenditure on Research and Development:

Revenue expenditure on Research and Development is charged to revenue under the respective heads of expenses. Capital expenditure is accounted as fixed assets.

(j) Foreign Currency Transactions:

i) Foreign currency transactions are accounted at the exchange rate prevailing on the date of transaction.

ii) The difference between the rate at which the transactions are accounted as stated above and the contracted rate is spread over the life of the contract. The difference on account of fluctuation in the rate of exchange is dealt with in the Profit and Loss Account.

iii) Year end monetary assets and liabilities are translated at year end rate of exchange.

(k) Employee benefits:

i) Short term employee benefits (benefits which are payable within twelve months after the end of the period in which the employee renders service) are measured at cost.

ii) Long term employee benefits (benefits which are payable after the end of twelve months in which the employee renders service) and post employment benefits (benefits which are payable on completion of employment) are measured on a discounted basis by the Projected Unit Credit Method on the basis of actuarial valuation, annually.

iii) Contributions to Provident Fund, a defined contribution plan, are made in accordance with the statute, and are recognised as an expense when employees have rendered service entitling them to the contributions.

iv) The eligible employees can accumulate un-availed privilege leave and are entitled to encash the same either while in employment, on termination or on retirement in accordance with the Companys policy. The present value of such un-availed leave is measured using the Projected Unit Cost Method, with actuarial valuations being carried out at each Balance Sheet date.

v) The cost of providing gratuity, a defined benefit plan, is determined using the Projected Unit Credit Method, on the basis of actuarial valuation at each Balance Sheet date. The gratuity benefit obligation recognised in Balance Sheet represents the present value of the obligation as reduced by the fair value of plan assets. Actuarial gains and losses are recognised in the Profit and Loss Account.

(I) Leases:

Leases where the lessor effectively retains substantially all the rights and benefits of ownership of the leased assets are classified as operating leases. Lease payments under operating leases are recognised as an expense in the profit and loss account.

(m) Taxation:

i) Current tax is determined as the amount of tax payable in respect of taxable income for the year.

ii) Deferred tax is recognised on timing difference between accounting income and the taxable income for the year and quantified using tax rates and laws enacted or substantively enacted as at the Balance Sheet date. Deferred tax assets are recognised subject to consideration of prudence.

(n) Provisions:

Provisions are recognised when the Company has a present obligation as a result of past events, for which it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate of the amount can be made.

 
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