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Accounting Policies of Tanfac Industries Ltd. Company

Mar 31, 2023

SIGNIFICANT ACCOUNTING POLICIES

a. Statement of Compliance:

These financial statements are prepared in accordance with
the Indian Accounting Standards (‘Ind AS’) notified under
the Companies (Indian Accounting Standards) Rules, 2015 as
amended from time to time, the relevant provisions of the
Companies Act, 2013 (‘the Act’) and guidelines issued by the
Securities and Exchange Board of India (‘SEBI’), as applicable.
The financial statements are approved by the Board of Directors
of the Company at their meeting held on 21st April, 2023.

b. Basis for Preparation and Presentation of
Financial Statements:

Basis of Preparation:

The financial statements have been prepared on a going
concern basis and a historical cost basis, except for the
following assets and liabilities:

(i) Certain financial assets and liabilities measured at fair value;

(ii) Employee’s Defined Benefit Plan measured as per
Actuarial Valuation;

(iii) Derivative Financial Instruments measured at fair value.

Fair value is the price that would be received to sell an asset or
paid to transfer a liability in an orderly transaction between
market participants at the measurement date under current
market conditions, regardless of whether that price is directly
observable or estimated using another valuation technique. In
determining the fair value of an asset or a liability, the Company
takes into account the characteristics of the asset or liability if
market participants would take those characteristics into account
when pricing the asset or liability at the measurement date.

Functional and Presentation Currency:

The financial statements are presented in Indian Rupees,
which is the functional currency of the Company and the
currency of the primary economic environment in which the
Company operates, and all values are rounded to the nearest
Lakhs, except as stated otherwise.

Classification of Assets and Liabilities into Current/Non-Current:

All assets and liabilities are classified as current or non-current
as per the Company’s normal operating cycle, and other criteria
set out in Schedule III of the Companies Act, 2013. Based on the

nature of products and the time lag between the acquisition
of assets for processing and their realisation in cash and cash
equivalents, 12 months period has been considered by the
Company as its normal operating cycle

c. Property, Plant and Equipment (PPE)

Property, plant and equipment are stated at acquisition
or construction cost less accumulated depreciation and
impairment loss. Cost comprises the purchase price and
any attributable cost of bringing the asset to its location and
working condition for its intended use, including relevant
borrowing costs and any expected costs of decommissioning.

The cost of an item of PPE is recognised as an asset if, and only
if, it is probable that the economic benefits associated with the
item will flow to the Company in future periods and the cost of
the item can be measured reliably. Expenditure incurred after
the PPE have been put into operations, such as repairs and
maintenance expenses are charged to the Statement of Profit
and Loss during the period in which they are incurred.

Items such as spare parts, standby equipment and servicing
equipment are recognised as PPE when it is held for use in the
production or supply of goods or services, or for administrative
purpose, and are expected to be used for more than one year.
Otherwise such items are classified as inventory

An item of PPE is de-recognised upon disposal or when no
future economic benefits are expected to arise from the
continued use of the assets. Any gain or loss arising on the
disposal or retirement of an item of PPE, is determined as
the difference between the sales proceeds and the carrying
amount of the asset and is recognised in the Statement of
Profit and Loss.

If significant parts of an item of PPE have different useful
lives, then they are accounted for as separate items (major
components) of PPE. Capital work-in-progress includes cost
of property, plant and equipment under installation/under
development as at the reporting date

d. Expenditure during construction period

Expenditure, net of income earned, during construction
(including financing cost related to borrowed funds for
construction or acquisition of qualifying PPE) period is included
under capital work-in-progress, and the same is allocated to the
respective PPE on the completion of construction. Advances
given towards acquisition or construction of PPE outstanding
at each reporting date are disclosed as Capital Advances under
“Other Non-Current Assets”.

e. Depreciation

Depreciation is the systematic allocation of the depreciable
amount over its useful life. Depreciation on Buildings and
Plant & Machinery is provided on a straight-line basis over such
useful lives as prescribed under Schedule II to the Companies
Act, 2013. Depreciation on all other assets other than Buildings
and Plant & Machinery has been provided on Written Down
Value method.

Also,

i) Where a significant component (in terms of cost) of an
asset has an estimated economic useful life shorter
than that of its corresponding asset, the component is
depreciated over its shorter life.

ii) Depreciation on additions is being provided on Pro rata
basis from the date of such additions.

iii) Depreciation on sale or disposal is provided on Pro rata
basis till the date of such sale or disposal.

iv) Depreciation on assets sold, discarded or demolished
during the year is being provided up to the month in
which such assets are sold, discarded or demolished.

v) Depreciation and amortization methods, useful lives and
residual values are reviewed at each financial year end
and adjusted prospectively.

vi) Leasehold lands are amortized over the period of the
lease.

Depreciable amount for PPE is the cost of PPE less its estimated
residual value. The useful life of PPE is the period over which
PPE is expected to be available for use by the Company, or the
number of production or similar units expected to be obtained
from the asset by the Company

f. Intangible Assets and Amortization:

Intangible assets are recognized only if it is probable that the
future economic benefits attributable to asset will flow to the
Company and the cost of asset can be measured reliably. The
Company determines the useful life as the period over which
the future economic benefits will flow to the Company after
taking into account all relevant facts and circumstances.

Intangible assets are measured at cost. Following initial
recognition, intangible asset is carried at acquisition/
development cost less accumulated amortization and
accumulated impairment loss if any. Cost of Intangible asset
includes purchase price including non-refundable taxes and
duties, borrowing cost directly attributable to the qualifying
asset and any directly attributable expenditure on making the
asset ready for its intended use.

Intangible assets with finite lives are amortised over the useful
economic life and assessed for impairment whenever there
is an indication that the intangible asset may be impaired.
The amortisation period and the amortisation method for an
intangible asset with a finite useful life are reviewed at least
at the end of each reporting period. Changes in the expected
useful life or the expected pattern of consumption of future
economic benefits embodied in the asset are considered to
modify the amortisation period or method, as appropriate,
and are treated as changes in accounting estimates. The
amortisation expense on intangible assets with finite lives is
recognised in the Statement of Profit and Loss unless such
expenditure forms part of carrying value of another asset.
Intangible assets are amortised on a straight-line basis over
their estimated useful lives.

Gains or losses arising from de-recognition of an intangible
asset are measured as the difference between the net disposal
proceeds and the carrying amount of the asset and are
recognised in the Statement of Profit and Loss when the asset
is recognised.

g. Impairment of Non-Financial Assets:

At the end of each reporting period, the Company reviews the
carrying amounts of non-financial assets to determine whether
there is any indication that those assets have suffered an
impairment loss. If any such indication exists, the recoverable
amount of the asset is estimated in order to determine the
extent of the impairment loss (if any). When it is not possible
to estimate the recoverable amount of an individual asset,
the Company estimates the recoverable amount of the cash¬
generating unit to which the asset belongs.

When a reasonable and consistent basis of allocation can be
identified, corporate assets are also allocated to individual
cash-generating units, or otherwise they are allocated to the
smallest group of cash-generating units for which a reasonable
and consistent allocation basis can be identified. Intangible
assets with indefinite useful lives and intangible assets not yet
available for use are tested for impairment at least annually,
and whenever there is an indication that the asset may be
impaired.

Recoverable amount is the higher of fair value less costs
of disposal and value in use. In assessing value in use, the
estimated future cash flows are discounted to their present

value using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific
to the asset for which the estimates of future cash flows have
not been adjusted.

If the recoverable amount of an asset (or cash-generating unit)
is estimated to be less than its carrying amount, the carrying
amount of the asset (or cash-generating unit) is reduced to
its recoverable amount. An impairment loss is recognised
immediately in Statement of Profit and Loss, unless the
relevant asset is carried at a revalued amount, in which case
the impairment loss is treated as a revaluation decrease.

When an impairment loss subsequently reverses, the
carrying amount of the asset (or a cash-generating unit) is
increased to the revised estimate of its recoverable amount,
but so that the increased carrying amount does not exceed
the carrying amount that would have been determined had
no impairment loss been recognised for the asset (or cash¬
generating unit) in prior years. A reversal of an impairment
loss is recognised immediately in the Statement of Profit
and Loss, unless the relevant asset is carried at a revalued
amount, in which case the reversal of the impairment loss is
treated as a revaluation increase.

h. Non-Current assets (or disposal Company)
classified as held for disposal:

Assets are classified as held for disposal and stated at the
lower of carrying amount and fair value less costs to sell. To
classify any Asset as “Asset held for disposal” the asset must
be available for immediate sale and its sale must be highly
probable. Such assets or Company of assets are presented
separately in the Balance Sheet, in the line “Assets held for
disposal”. Once classified as held for disposal, intangible assets
and PPE are no longer amortised or depreciated.

The management must be committed to the sale/distribution
expected within one year from the date of classification.

i. Inventories:

Raw materials, fuel, stores & spare parts and packing materials

Valued at lower of cost and net realisable value (NRV).
However, these items are considered to be realisable at
cost, if the finished products, in which they will be used, are
expected to be sold at or above cost. The cost is computed on
weighted average basis which includes expenditure incurred
for acquiring inventories like purchase price, import duties,
taxes (net of tax credit) and other costs incurred in bringing the
inventories to their present location and condition.

Work-in- progress (WIP), finished goods, stock-in-trade
and trial run inventories:

Valued at lower of cost and NRV. Cost of Finished goods and
WIP includes cost of raw materials, cost of conversion and
other costs incurred in bringing the inventories to their present
location and condition. Cost of inventories is computed on
weighted average basis.

Waste/Scrap:

Waste/Scrap inventory is valued at NRV. Net realisable value is
the estimated selling price in the ordinary course of business,
less the estimated costs of completion and the estimated costs
necessary to make the sale.

Obsolete, defective, slow moving and unserviceable
inventories, if any, are duly provided for.

j. Borrowing Costs:

Borrowing costs that are directly attributable to the
acquisition, construction or development of a qualifying asset
are capitalized as part of the cost of the respective asset till
such time the asset is ready for its intended use. A qualifying
asset is an asset which necessarily takes a substantial period of
time to get ready for its intended use. All other borrowing costs
are expensed in the period in which they occur.

Borrowing costs consist of interest, amortization of discounts,
hedge related cost incurred in connection with foreign
currency borrowings and exchange difference arising from
foreign currency borrowings to the extent they are treated as
an adjustment to the borrowing cost and other costs that an
entity incurs in connection with the borrowing of funds.

Investment income earned on the temporary investment of
specific borrowings pending their expenditure on qualifying
assets is deducted from the borrowing costs eligible for
capitalisation. All other borrowing costs are recognised in
the Statement of Profit and Loss in the period in which they
are incurred.

k. Government Grant:

Government Grants are recognised where there is reasonable
assurance that the grant will be received and all attached
conditions will be complied with. When the grant relates to
an asset, it is recognised as income in equal amounts over the
expected useful life of the related asset. When the Company
receives grants of non-monetary assets, the asset and the grant
are recorded at fair value amounts and released to Statement
of Profit & loss over the expected useful life in a pattern of
consumption of the benefit of the underlying asset. When
loans or similar assistance are provided by the government
or related institutions, with an interest rate below the current
applicable market rate, the effect of this favourable interest
is regarded as a government grant. The loan or assistance
is initially recognised and measured at fair value and the
government grant is measured as the difference between
initial carrying value of the loan and the proceeds received.
The loan is subsequently measured as per the accounting
policy applicable to financial liabilities.


Mar 31, 2018

Note 1: SIGNIFICANT ACCOUNTING POLICIES a. Statement of Compliance:

These Financial Statements are prepared in accordance with the Indian Accounting Standards (''Ind AS'') notified under the Companies (Indian Accounting Standards) Rules, 2015 as amended from time to time, the relevant provisions of the Companies Act, 2013 (''the Act'') and guidelines issued by the Securities and Exchange Board of India (''SEBI''), as applicable.

The Financial Statements for the year ended March 31, 2018 are the Company''s first Ind AS Financial Statements. The date of transition to Ind AS is April 1, 2016. Accordingly, the Company has prepared an Opening Ind AS Balance Sheet as on April 1, 2016 and comparative figures for the year ended March 31, 2017 are also in compliance with Ind AS. An explanation of how the transition to Ind AS has affected the previously reported Balance sheet, Statement of Profit and Loss and Statement of Cash Flows of the Company is provided in Note 28.

b. Basis for Preparation and Presentation of Financial Statements:

Basis of Preparation:

The Financial Statements have been prepared on a historical cost basis, except for the following assets and liabilities:

i Certain financial assets and liabilities (refer accounting policy regarding financial instruments).

ii Employee''s Defined Benefit Plan as per Actuarial Valuation

iii Derivative Financial Instruments measured at fair value

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions, regardless of whether that price is directly observable or estimated using another valuation technique. In determining the fair value of an asset or a liability, the Company takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date.

Functional and Presentation Currency

The Financial Statements are presented in Indian Rupees, which is the functional currency of the Company and the currency of the primary economic environment in which the Company operates.

Classification of Assets and Liabilities into Current/Non-Current:

All assets and liabilities are classified as current or non-current as per the Company''s normal operating cycle, and other criteria set out in Schedule III of the Companies Act, 2013. Based on the nature of products and the time lag between the acquisition of assets for processing and their realization in cash and cash equivalents, 12-month period has been considered by the Company as its normal operating cycle.

c. Property, Plant and Equipment (PPE)

Property, plant and equipment are stated at acquisition or construction cost less accumulated depreciation and impairment loss. Cost comprises the purchase price and any attributable cost of bringing the asset to its location and working condition for its intended use, including relevant borrowing costs and any expected costs of decommissioning.

The cost of an item of PPE is recognized as an asset if, and only if, it is probable that the economic benefits associated with the item will flow to the Company in future periods and the cost of the item can be measured reliably. Expenditure incurred after the PPE have been put into operations, such as repairs and maintenance expenses are charged to the Statement of Profit and Loss during the period in which they are incurred.

I tems such as spare parts, standby equipment and servicing equipment are recognized as PPE when it is held for use in the production or supply of goods or services, or for administrative purpose, and are expected to be used for more than one year. Otherwise such items are classified as inventory.

An item of PPE is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the assets. Any gain or loss, arising on the disposal or retirement of an item of PPE, is determined as the difference between the sale proceeds and the carrying amount of the asset and is recognized in the Statement of Profit and Loss.

d. Expenditure during construction period

Expenditure, net of income earned, during construction (including financing cost related to borrowed funds for construction or acquisition of qualifying PPE) period is included under capital work-in-progress, and the same is allocated to the respective PPE on the completion of construction. Advances given towards acquisition or construction of PPE outstanding at each reporting date are disclosed as Capital Advances under “Other Non-Current Assets".

e. Depreciation

Depreciation on Buildings and Plant and Machinery is the systematic allocation of the depreciable amount over its useful life and is provided on a straight-line basis over such useful lives as prescribed in Schedule II of the Act except that of useful life of IBAP plant has been considered as technically assessed which is less than the period prescribed under Schedule II to the Act. Depreciation on all other assets other than Buildings and Plant and Machinery has been provided on Written Down Value method.

i) Where a significant component (in terms of cost) of an asset has an estimated economic useful life shorter than that of its corresponding asset, the component is depreciated over its shorter life.

ii) Depreciation on additions is being provided on Pro-rata basis from the date of such additions.

iii) Depreciation on sale or disposal is provided on Pro-rata basis till the date of such sale or disposal.

iv) Depreciation on assets sold, discarded or demolished during the year is being provided up to the month in which such assets are sold, discarded or demolished.

v) Depreciation on other Assets individually costing less than Rs. 5,000/- each has been wholly depreciated in the year of acquisition/installation.

vi) Depreciation and amortization methods, useful lives and residual values are reviewed at each financial year end and adjusted prospectively.

vii) Leasehold lands are amortized over the period of the lease.

f. Intangible Assets and Amortization:

Intangible assets are recognized only if it is probable that the future economic benefits attributable to asset will flow to the Company and the cost of asset can be measured reliably. The Company determines the useful life as the period over which the future economic benefits will flow to the Company after taking into account all relevant facts and circumstances.

Intangible assets are stated at cost of acquisition/development less accumulated amortization and accumulated impairment loss if any. Cost of Intangible asset includes purchase price including non-refundable taxes and duties, borrowing cost directly attributable to the qualifying asset and any directly attributable expenditure on making the asset ready for its intended use.

Intangible assets under development comprise of cost incurred on intangible assets under development that are not yet ready for their intended use as at the Balance sheet date.

The Company has determined useful life of Software as 5 years.

Amortization methods and useful lives are reviewed at each financial year end and adjusted prospectively.

In case of assets purchased during the year, amortization on such assets is calculated on pro-rata basis from the date of such addition.

g. Impairment of Non-Financial Assets:

At the end of each reporting period, the Company reviews the carrying amounts of non-financial assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.

Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment at least annually, and whenever there is an indication that the asset may be impaired.

Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

I f the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognized immediately in Statement of Profit and Loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

When an impairment loss subsequently reverses, the carrying amount of the asset (or a cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognized immediately in the Statement of Profit and Loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

h. Non-Current assets (or disposal Company) classified as held for disposal:

Assets are classified as held for disposal and stated at the lower of carrying amount and fair value less costs to sell. To classify any Asset as “Asset held for disposal" the asset must be available for immediate sale and its sale must be highly probable. Such assets or Company of assets are presented separately in the Balance Sheet, in the line “Assets held for disposal". Once classified as held for disposal, intangible assets and PPE are no longer amortized or depreciated.

i. Inventories:

Raw materials, fuel, stores & spare parts and packing materials

Valued at lower of cost and net realizable value (NRV). However, these items are considered to be realizable at cost, if the finished products, in which they will be used, are expected to be sold at or above cost. Cost is determined on weighted average basis.

Work-in-progress (WIP), finished goods, stock-in-trade and trial run inventories:

Valued at lower of cost and NRV. Cost of Finished goods and WIP includes cost of raw materials, cost of conversion and other costs incurred in bringing the inventories to their present location and condition. Cost of inventories is computed on weighted average basis.

Waste/Scrap:

Waste/Scrap inventory is valued at NRV. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale.

j. Borrowing Costs:

Borrowing costs that are directly attributable to the acquisition, construction or development of a qualifying asset are capitalized as part of the cost of the respective asset till such time the asset is ready for its intended use. A qualifying asset is an asset which necessarily takes a substantial period of time to get ready for its intended use. All other borrowing costs are expensed in the period in which they occur.

Borrowing costs consist of interest, amortization of discounts, hedge related cost incurred in connection with foreign currency borrowings and exchange difference arising from foreign currency borrowings to the extent they are treated as an adjustment to the borrowing cost and other costs that an entity incurs in connection with the borrowing of funds.

k. Government Grant:

Government Grants are recognized where there is reasonable assurance that the grant will be received and all attached conditions will be complied with. When the grant relates to an asset, it is recognized as income in equal amounts over the expected useful life of the related asset

When the Company receives grants of non-monetary assets, the asset and the grant are recorded at
fair value amounts and released to Statement of Profit & Loss over the expected useful life in a pattern of consumption of the benefit of the underlying asset. When loans or similar assistance are provided by the government or related institutions with an interest rate below the current applicable market rate, the effect of this favorable interest is regarded as a government grant. The loan or assistance is initially recognized and measured at fair value and the government grant is measured as the difference between initial carrying value of the loan and the proceeds received. The loan is subsequently measured as per the accounting policy applicable to financial liabilities.

l. Provisions, Contingent Liabilities and Contingent Assets:

Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

I f the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects current market assessment of time value of money and, where appropriate, the risks specific to the liability. Unwinding of the discount is recognized in the Statement of Profit and Loss as a finance cost. Provisions are reviewed at each reporting date and are adjusted to reflect the current best estimate.

Contingent liabilities are also disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company.

Claims against the Company where the possibility of any outflow of resources in settlement is remote, are not disclosed as contingent liabilities.

Contingent assets are not recognized in Financial Statements since this may result in the recognition of income that may never be realized. However, when the realization of income is virtually certain, then the related asset is not a contingent asset and is recognized.

m. Revenue Recognition:

Revenue is measured at the fair value of the consideration received or receivable for goods supplied and services rendered, net of returns and discounts to customers. Revenue is recognized when

the significant risks and rewards of ownership of the goods have passed to the buyer. Sales are disclosed net of Sales tax/Value added Tax and now Goods & Service tax, discounts and Sales return.

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

Export Incentives are accounted for to the extent considered recoverable by the Management.

Rental income on assets given under operating lease arrangements is recognized on a straight-line basis over the period of the lease unless the receipts are structured to increase in line with expected general inflation to compensate for the Company''s expected inflationary cost increases.

n. Lease:

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as Operating Leases.

Operating Lease:

Lease rentals on assets obtained under operating lease arrangements are charged to the Statement of Profit and Loss on a straight-line basis over the period of the lease unless the payments are structured to increase in line with expected general inflation to compensate for the Company''s expected inflationary cost increases.

Finance Lease:

Finance leases are capitalized at the commencement of the lease at the inception date fair value of the leased property or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognized in finance costs in the Statement of Profit and Loss.

A leased asset is depreciated over the useful life of the asset. However, if there is no reasonable certainty that the Company will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life of the asset and the lease term.

o. Employee Benefit Expense:

Defined benefit plan:

The Company pays gratuity to the employees whoever has completed five years of service with the Company at the time of resignation/superannuation. The gratuity liability amount is contributed to the approved gratuity fund formed exclusively for gratuity payment to the employees.

The liability in respect of gratuity and other post-employment benefits is calculated using the Projected Unit Credit Method and spread over the period during which the benefit is expected to be derived from employees'' services.

Remeasurement of defined benefit plans in respect of post-employment are charged to the Other Comprehensive Income. Remeasurement recognized in Other Comprehensive Income (''OCI'') is reflected immediately in retained earnings and will not be reclassified to Statement of Profit and Loss.

The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds.

The defined benefit obligation recognized in the Balance Sheet represents the actual deficit or surplus in the Company''s defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any economic benefits available in the form of refunds from the plans or reductions in future contributions to the plans.

Defined contribution plan:

Employee benefits in the form of contribution to superannuation fund, provident fund managed by Government authorities, Employee State Insurance Corporation and Labour Welfare Fund are considered as defined contribution plan and the same is charged to Statement of Profit and Loss for the year when the contributions to the respective funds are due.

Other long-term employee benefits:

The Company has a scheme for leave encashment for employees, the liability for which is determined on the basis of an actuarial valuation carried out at the end of the year using Projected Unit Credit method.

p. Income Taxes:

The tax expense for the period comprises current and deferred tax. Tax is recognized in Statement of Profit and Loss, except to the extent that it relates to items recognized in the OCI or in equity. In which case, the tax is also recognized in OCI or equity.

Current Tax:

Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities, based on tax rates and laws that are enacted or substantively enacted at the Balance sheet date.

Deferred Tax:

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the Financial Statements and the corresponding tax bases used in the computation of taxable profit.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realized simultaneously.

A deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable

Minimum Alternate Tax (MAT) credit is recognized as an asset only when and to the extent it is reasonably certain that the Company will pay normal income tax during the specified period. Such asset is reviewed at each Balance Sheet date and the carrying amount of the MAT credit asset is written down to the extent there is no longer a convincing evidence to the effect that the Company will pay normal income tax during the specified period.

q. Foreign Currency Transactions:

Transactions denominated in foreign currencies are recorded at the exchange rates prevailing on the date of the transaction.

As at balance sheet date, foreign currency monetary items are translated at closing exchange rate. Foreign currency non-monetary items carried at fair value are translated at the rates prevailing at the date when the fair value was determined. Foreign currency non-monetary items measured in terms of historical cost are translated using the exchange rate as at the date of initial transactions.

Exchange difference arising on settlement or translation of foreign currency monetary items are recognized as income or expense in the year in which they arise except to the extent exchange differences are regarded as an adjustment to interest cost on those foreign currency borrowings.

r. Earnings Per Share:

The basic Earnings Per Share (''EPS'') is computed by dividing the net profit/(loss) after tax for the year attributable to the equity shareholders by the weighted average number of equity shares outstanding during the year. The weighted average number of equity shares outstanding during the period is adjusted for events of bonus issue and share split, if any.

For the purpose of calculating diluted EPS, net profit/(loss) after tax for the year attributable to the 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.

s. Financial Instruments:

Financial Assets & Financial Liabilities are recognized when the Company becomes party to contractual provisions of the relevant instrument.

Initial Measurement:

At initial recognition, the Company measures a financial asset and financial liabilities at its fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss and ancillary costs related to borrowings) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in Statement of Profit and Loss.

Classification and Subsequent Measurement: Financial Assets

The Company classifies financial assets as subsequently measured at amortized cost, fair value through Other Comprehensive Income (''FVOCI'') or fair value through profit or loss (''FVTPL'') on the basis of following:

- the entity''s business model for managing the financial assets and

- the contractual cash flow characteristics of the financial asset.

Amortized Cost:

A financial asset shall be classified and measured at amortized cost if both of the following conditions are met:

- the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows and

- the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Fair Value through OCI:

A financial asset shall be classified and measured at FVOCI if both of the following conditions are met:

- the financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and

- the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Fair Value through Profit or Loss:

A financial asset shall be classified and measured at fair value through profit or loss unless it is measured at amortized cost or at FVOCI.

All recognized financial assets are subsequently measured in their entirety at either amortized cost or fair value, depending on the classification of the financial assets.

Equity instruments:

All equity investments in scope of Ind-AS 109 are measured at fair value. Equity instruments which are held for trading are classified as at FVTPL. For all other equity instruments, the Company decides to classify the same either as at FVTOCI or FVTPL. The Company makes such selection on an instrument-by-instrument basis. Where the Company''s management has selected to present fair value gains and losses on equity investments in Other Comprehensive Income, there is no subsequent reclassification of fair value gains and losses to the Statement of Profit and Loss. Dividends from such investments are recognized in the Statement of Profit and Loss as other income when the Company''s right to receive payments is established.

Impairment of financial assets:

The Company assesses on a forward-looking basis the expected credit losses associated with its assets. The impairment methodology applied depends on whether there has been a significant increase in credit risk.

For trade receivables, the Company applies ''simplified approach'' as specified under Ind AS 109, which requires expected lifetime losses to be recognized from initial recognition of the receivables. The application of simplified approach does not require the Company to track changes in credit risk. The provision matrix is prepared based on historically observed default rates over the expected life of trade receivables and is adjusted for forward-looking estimates. At each reporting date, the historically observed default rates and changes in the forward-looking estimates are updated.

Derecognition of Financial Instruments:

The Company derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party. If the Company neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Company recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Company retains substantially all the risks and rewards of ownership of a transferred financial asset, the Company continues to recognize the financial asset and also recognizes a collateralized borrowing for the proceeds received.

On derecognition of a financial asset in its entirety, the difference between the asset''s carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognized in Other Comprehensive Income and accumulated in equity is recognized in profit or loss if such gain or loss would have otherwise been recognized in profit or loss on disposal of that financial asset.

On derecognition of a financial asset other than in its entirety (e.g. when the Company retains an option to repurchase part of a transferred asset), the Company allocates the previous carrying amount of the financial asset between the part it continues to recognized under continuing involvement, and the part it no longer recognizes on the basis of the relative fair values of those parts on the date of the transfer. The difference between the carrying amount allocated to the part that is no longer recognized and the sum of the consideration received for the part no longer recognized and any cumulative gain or loss allocated to it that had been recognized in Other Comprehensive Income is recognized in profit or loss if such gain or loss would have otherwise been recognized in profit or loss on disposal of that financial asset. A cumulative gain or loss that had been recognized in Other Comprehensive Income is allocated between the part that continues to be recognized and the part that is no longer recognized on the basis of the relative fair values of those parts.

Classification and Subsequent Measurement: Financial Liabilities

All financial liabilities of the Company are subsequently measured at amortized cost using the effective interest method.

Under the effective interest method, the future cash payments are exactly discounted to the initial recognition value using the effective interest rate. The cumulative amortization using the effective interest method of the difference between the initial recognition amount and the maturity amount is added to the initial recognition value (net of principal repayments, if any) of the financial liability over the relevant period of the financial liability to arrive at the amortized cost at each reporting date. The corresponding effect of the amortization under effective interest method is recognized as interest expense over the relevant period of the financial liability. The same is included under finance cost in the Statement of Profit and Loss.

Preference shares, which are mandatorily redeemable are classified as Financial liabilities.

t. Cash and cash equivalent:

Cash and cash equivalents in the Balance Sheet comprise cash at bank and in hand that are readily convertible into cash which are subject to insignificant risk of changes in value and are held for the purpose of meeting short-term cash commitments.

u. Derivative Financial Instruments and Hedge Accounting:

The Company enters into derivative financial instruments viz. foreign exchange forward contracts to manage its exposure to foreign exchange rate risks. The Company formally establishes a hedge relationship between such forward currency contracts (''hedging instrument'') and recognized financial liabilities (''hedged item'') through a formal documentation at the inception of the hedge relationship in line with the Company''s Risk Management objective and strategy. The Company does not hold derivative financial instruments for speculative purposes.

Derivatives are initially recognized at fair value at the date the derivative contracts are entered into and are subsequently premeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognized in profit or loss immediately excluding derivatives designated as cash flow hedge.

Recognition and measurement of fair value hedge:

Hedging instrument is initially recognized at fair value on the date on which a derivative contract is entered into and is subsequently measured at fair value at each reporting date. Gain or loss arising from changes in the fair value of hedging instrument is recognized in the Statement of Profit and Loss. Hedging instrument is recognized as a financial asset in the Balance Sheet if its fair value as at reporting date is positive as compared to carrying value and as a financial liability if its fair value as at reporting date is negative as compared to carrying value.

Hedged item (recognized financial liability) is initially recognized at fair value on the date of entering into contractual obligation and is subsequently measured at amortized cost. The hedging gain or loss on the hedged item is adjusted to the carrying value of the hedged item as per the effective interest method and the corresponding effect is recognized in the Statement of Profit and Loss.

On Derecognition of the hedged item, the unamortized fair value of the hedging instrument is recognized in the Statement of Profit and Loss.

v. Segment Reporting - Identification of Segments:

An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses, whose operating results are regularly reviewed by the company''s management to make decisions for which discrete financial information is available.

Based on the management approach as defined in Ind AS 108, the management evaluates the Company''s performance and allocates resources based on an analysis of various performance indicators by business segments and geographic segments.

Note 1(B) : Use of Estimates and Judgments

The preparation of the Financial Statements in conformity with Ind AS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

In particular, information about significant areas of estimation, uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amounts recognized in the Financial Statements are included in the following notes:

a. Useful Lives of Property, Plant & Equipment:

Property, Plant and Equipment represent a significant proportion of the asset base of the Company. The charge in respect of periodic depreciation is derived after determining an estimate of an asset''s expected useful life. The useful lives of the Company''s assets are determined by the management at the time the asset is acquired and reviewed periodically, including at each financial year-end. The lives are based on historical experience with similar assets as well as anticipation of future events, which may impact their life, such as changes in technical or commercial obsolescence arising from changes or improvements in production or from a change in market demand of the product or service output of the asset.

b. Defined Benefit Plans and Compensated Absences:

The cost of the defined benefit plans, compensated absences and the present value of the defined benefit obligation are based on actuarial valuation using the projected unit credit method. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates.

Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

c. Expected Credit Losses on Financial Assets:

The impairment provisions of financial assets are based on assumptions about risk of default and expected timing of collection. The Company uses judgment in making these assumptions and selecting the inputs to the impairment calculation, based on the Company''s past history, customer''s creditworthiness, existing market conditions as well as forward looking estimates at the end of each reporting period.

d. Fair Value measurement of Financial Instruments:

When the fair values of financial assets and financial liabilities recorded in the Balance Sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques, including the discounted cash flow model, which involve various judgment’s and assumptions.

w. Standards issued but not effective:

The amendments to standards that are issued, but not yet effective, up to the date of issuance of the Company''s Financial Statements are disclosed below. The Company intends to adopt these standards, if applicable, when they become effective.

The Ministry of Corporate affairs (''MCA'') has issued the Companies (Indian Accounting Standards) Amendment Rules, 2017 and Companies (Indian Accounting Standards) Amendment Rules, 2018 amending the following standard:

Ind AS 115 Revenue from contracts with customers:

I nd AS 1 1 5 was issued on 29 March 201 8 and establishes a five-step model to account for revenue arising from contracts with customers. Under Ind As 115, revenue is recognized at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to the customer. The Company is currently assessing the potential impact of this standard.

15.2 Short Term Borrowings - Unsecured Loan

Unsecured working capital loan including Import Finance Loan taken in Foreign Currency (US $) for payment of imported Raw Materials. The currency risk is partly hedged. Interest is charged at LIBOR Plus spread. Applicable interest amount is payable along with principal amount. Due date for repayment of these loans is between 90 to 180 days from the date of ailment. Details of loan are given below:

"Disclosure under Sec. 22 of MSMED Act, 2006

(Chapter V - Delayed Payment to Micro and Small Enterprises)"

(Chapter V - Delayed payment to Micro, Small and Medium Enterprises)

Micro, Small and Medium Enterprises

Information in respect of Micro, Small and Medium Enterprises Development Act, 2006; based on the information available with the company. The required disclosures are given below:

Maturity profile

The sensitivity analyses above have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period and may not be representative of the actual change. It is based on a change in the key assumption while holding all other assumptions constant. When calculating the sensitivity to the assumption, the method (Projected Unit Credit Method) used to calculate the liability recognized in the balance sheet has been applied. The methods and types of assumptions used in preparing the sensitivity analysis did not change compared with the previous period.

100% of the plan assets held by gratuity trust comprises of employees group gratuity scheme with TANFAC Employees Gratuity Trust Fund. The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors such as supply and demand factors in the employment market. The expected rate of return on plan assets given by Actuary.

The Company expects to contribute Rs. 10.00 lakhs (P.Y. Rs. 60.18 lakhs) to gratuity trust for contribution to Aditya Birla Finance Limited during the financial year 2018-19.

b) Disclosure in respect of leave entitlement liability:

Leave entitlement is short term benefit which is recognized as an expense at the un-discounted amount in the year in which the related service is rendered and disclosed under other current liabilities.

c) Death-in-service benefit:

The Company has taken group term policy from an insurance Company to cover its obligation for death-in-service benefit given to eligible employees. The insurance premium of Rs.16.43 lakhs (P.Y. Rs.12.08 lakhs) is recognized in Statement of Profit and Loss.

d) The Company contributes towards Employees Provident Fund, Employees State Insurance, National Pension Scheme and Labour Welfare Fund. The aggregate amount contributed and charged to Statement of Profit and Loss is Rs. 73.55 lakhs (P.Y. Rs. 67.69 lakhs).

28.2. Related Party Disclosure:

Disclosures as per Ind AS 24 - ''Related Party Disclosures'' are given below:

# The aforesaid amounts exclude gratuity provision as it is determined on actuarial basis for the Company as a whole. The transactions exclude reimbursement of expenses

28.3 Disclosure regarding Hedged and Unhedged exposure in foreign currency denominated monetary items:

Exposure in Foreign Currency - Hedged

The Company enters into forward exchange contracts to hedge against its foreign currency exposures relating to the underlying transactions and firm commitments. The Company does not enter into any derivative instruments for trading or speculative purposes.

The forward exchange contracts used for hedging foreign currency exposure and outstanding as at reporting date are as under:

b) Estimated amount of contracts remaining to be executed on capital account and not provided for (Net of advances) - Rs.35.97 lakhs (Previous Year Rs. 22.98 lakhs)

c) SIPCOT has raised a demand of Rs.12.00 lakhs for payment of additional cost for the land at Cuddalore taken on long-term lease together with interest @ 16.5%p.a. The Company has paid an initial amount of Rs.6.00 lakhs in 1995 and additional amount of Rs.6.00 lakhs in 2001, as per the directions of the Honourable High Court of Madras. However, SIPCOT has preferred an appeal against the order of the High Court challenging the waiver of interest. Matter is pending at High court of Madras.

d) The company had filed a petition with Hon''ble Tamil Nadu Electricity Regulatory Commission (TNERC) to declare its 2.3 MW cogeneration plant exempt from Renewal Power Obligation (RPO). The said petition was dismissed by Hon''ble TNERC on 13th November 2015 relying on an order passed by Hon''ble Appellate Tribunal for Electricity (APTEL) in a different petition which the company believes the facts of the case has no applicability to the factors of its petition and also based on erroneous premise that the company''s plant is a fossil-fuel based cogeneration plant. Aggrieved by the order the company filed an appeal with Hon''ble APTEL which has been admitted. The company believes, based on the legal advice, that its appeal would be favourably considered by APTEL and accordingly has not made any provision towards RPO from financial year 2012-13 to 2017-18 currently estimated at Rs.112.78 lakhs.

e) During the Financial Year 1991 - 92 the Company has received a notice from the Tamil Nadu Sales Tax authorities towards levy of tax etc. on sales effected from Pondicherry Depot during 1989-90 and 1990-91. Based on the directions of the Honourable High Court of Madras, the Appellate Assistant Commissioner, Commercial Taxes, Chennai passed the order in favour of the company thereby reducing the demand to Rs. 52.77 lakhs. The amount has since been paid under protest. The company has also filed a writ petition before Honourable High Court of Madras, for granting refund of tax paid earlier to Pondicherry Government. As a matter of abundant caution, provision has been made in these accounts for the disputed amount of Rs. 52.77 lakhs.

The Honourable High Court had passed Order vide SR No.49922 dated 1st September, 2016, disposing all the writ petitions filed earlier on various occasions and giving liberty to the Company (Petitioner) to file an appeal before the Tamil Nadu Sales Tax Appellate Tribunal within Sixty days from the receipt of the order, who shall entertain the appeal without reference to the limitation. Accordingly, the Company has filed an appeal before The Tamil Nadu Sales Tax Appellate Tribunal on 6th January, 2017, pursuant to the judgment order dated 01.09.2016 delivered on 22/1 1/2016 and appeal proceeding is awaited.

f) The Company had implemented Isobutyl Acetophenone (IBAP) project during 2010-11 with a capital outlay of Rs. 1,477.27 lakhs and has made some modifications during 2011-12, 2012-13 and 2015-16 with additional capex amounting to Rs. 85.66 lakhs to resolve technical issues faced. The company had signed a Memorandum of Understanding (MOU) with an interested party for transfer of machinery and technology at an agreed value subject to certain conditions in 2012-13 and had recognized impairment provision of Rs 277.96 lakhs during that year based on the said MOU. In the opinion of the management there would be no further impairment in the said project.

g) The Company has a process of evaluating financial impact of pending litigation on Financial Statement and making necessary provision in terms of prevailing accounting practices.

h) The Company has a process whereby periodically all long term contracts are assessed for material foreseeable losses. At the year-end, the Company has reviewed and ensured that adequate provision as required under any law/accounting standards for material foreseeable losses on such long term contracts has been made in the books of account. The Company did not have any derivative contracts as at balance sheet date.

28.5. Fair Value Measurement:

The management assessed that cash and bank balances, trade receivables, trade payables, cash credits and other financial assets and liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

The fair values of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

The Company has established the following fair value hierarchy that categorizes the values into 3 levels. The inputs to valuation techniques used to measure fair value of financial instruments are:

- Level 1: This hierarchy uses quoted (unadjusted) prices in active markets for identical assets or liabilities.

- Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

- Level 3: Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

The following table provides the fair value measurement hierarchy of the Company''s assets and liabilities:

28.6 Financial risk management objectives and policies:

The Company''s principal financial liabilities, other than derivatives, comprise loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s principal financial assets include trade and other receivables, investments, and cash & cash equivalents that derive directly from its operations.

The Company is exposed to market risk, credit risk and liquidity risk. The Company''s senior management oversees the management of these risks. It is the Company''s policy that no trading in derivatives for speculative purposes may be undertaken. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarized below.

a) Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises of foreign currency risk. Market risk is attributable to all market risk sensitive financial instruments including foreign currency receivables, payables and borrowings. The sensitivity analyses in the following sections relate to the position as at 31st March, 2018 and 31st March, 2017.

The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks. This is based on the financial assets and financial liabilities held at 31st March, 2018 and 31st March, 2017.

i) Foreign currency risk

The Company may also have Foreign currency exchange risk on procurement of raw materials. The Company manages this foreign risk using derivatives, wherever required to mitigate or eliminate the risk.

Foreign currency sensitivity

The following table demonstrates the sensitivity to a reasonably possible change in rate of USD, with all other variables held constant. The impact on the Company''s profit before tax is due to changes in the fair value of monetary assets and liabilities.

b) Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables).

The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis throughout each reporting period. To assess whether there is a significant increase in credit risk the Company compares the risk of default occurring on asset as at the reporting date with the risk of default as at the date of initial recognition. It considers reasonable and supportive forwarding-looking information such as:

i. Actual or expected significant adverse changes in business,

ii. Actual or expected significant changes in the operating results of the counterparty,

iii. Financial or economic conditions that are expected to cause a significant change to the counterparty''s ability to meet its obligations,

iv. Significant increase in credit risk on other financial instruments of the same counterparty,

v. Significant changes in the value of the collateral supporting the obligation or in the quality of the third-party guarantees or credit enhancements.

Financial assets are written off when there are no reasonable expectations of recovery, such as a debtor failing to engage in a repayment plan with the Company.

Assets in the nature of Investment, security deposits, loans and advances are measured using 12 months expected credit losses (ECL). Balances with Banks is subject to low credit risk due to good credit rating assigned to these banks. Trade receivables are measured using life time expected credit losses.

Financial Assets for which loss allowances is measured using the Expected Credit Losses (ECL):

No Significant changes in estimation techniques or assumptions were made during the year

c) Liquidity risk

Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at reasonable price. The Company determines its liquidity requirements in the short, medium and long term. This is done by drawing up cash forecast for short and medium term requirements and strategic financing plans for long term needs. Management monitors the Company''s liquidity position through rolling forecast on the basis of expected cash flows.

Maturity patterns of the Financial Liabilities of the Company at the reporting date based on contractual undiscounted payment-

d) Capital Management

For the purposes of the Company''s capital management, capital includes issued capital, share premium and all other equity reserves attributable to the equity holders. The Company aims to manage its capital efficiently so as to safeguard its ability to continue as a going concern and to optimize returns to our shareholders.

The capital structure of the Company is based on management''s judgment of the appropriate balance of key elements in order to meet its strategic and day-to-day needs. We consider the amount of capital in proportion to risk and manage the capital structure in the light of changes in economic conditions and the risk characteristics of the underlying assets.

The Company''s policy is to maintain a stable and strong capital structure with a focus on total equity so as to maintain investor, creditors and market confidence and to sustain future development and growth of its business. The Company will take appropriate steps in order to maintain, or if necessary adjust, its capital structure.

The Company manages its capital structure and makes adjustments in the light of changes in economic conditions and the requirements of the financial covenants. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt.

Lease payments recognized in the Statement of Profit & Loss for the year is Rs.16.27 lakhs (Previous year: Rs 16.89 lakhs)

28.8. First-time adoption of Ind AS

These are the Company''s first Financial Statements prepared in accordance with Ind AS.

The Company has adopted Ind AS notified by the Ministry of Corporate Affairs with effect from 1st April, 2017, with a transition date of 1st April, 2016. Ind AS 101-First-time Adoption of Indian Accounting Standards requires that all Ind AS standards and interpretations that are issued and effective for the first Ind AS Financial Statements which is for the year ended 31st March, 2018 for the company, be applied retrospectively and consistently for all financial years presented.

Consequently, in preparing these Ind AS Financial Statements, the Company has availed certain exemptions and complied with the mandatory exceptions provided in Ind AS 101, as explained below. The resulting difference in the carrying values of the assets and liabilities as at the transition date between the Ind AS and Previous GAAP have been recognized directly in equity.

Set out below are the Ind AS 101 optional exemptions availed as applicable and exceptions applied in the transition from previous GAAP to Ind AS.


Mar 31, 2016

SIGNIFICANT ACCOUNTING POLICIES

a. Basis for Preparation of Financial Statements:

The Financial Statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP), including the Accounting Standards notified under the relevant provisions of The Companies Act, 2013.

The Financial Statements have been prepared as a going concern on accrual basis under the historical cost convention.

The Accounting Policies adopted in the preparation of the Financial Statements are consistent with those followed in the previous year.

b. Use of Estimates:

The preparation of the Financial Statements in conformity with Indian GAAP requires the management to make estimates and assumptions considered in the reported amounts of Assets and Liabilities (including contingent liabilities) and the reported Income and Expenses during the year. Management believes that the estimates used in preparation of the Financial Statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and estimates are recognized in the periods in which the results are known.

c. Fixed Assets (Tangible and Intangible) :

Fixed Assets are recorded at cost of acquisition or construction including any directly attributable expenditure on making the asset ready for its intended use, net of CENVAT and/or Value Added Tax less Accumulated Depreciation, Amortization and Impairment loss, if any.

d. Capital Work-in-Progress:

Projects under which tangible Fixed Assets are not yet ready for their intended use are carried at cost, including direct cost and related expenses.

e. Impairment of Fixed Assets:

The carrying amounts of assets are reviewed at the Balance Sheet date, if there is any indication of impairment based on external / internal factors.

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

f. Depreciation:

Depreciation on Fixed Assets has been provided as per the useful life prescribed in Schedule II to the Companies Act, 2013 as follows:

i) Leasehold land is being amortized over the lease period.

ii) Depreciation in respect of Buildings and Plant and Machinery has been provided on Straight Line Method from the date of acquisition / installation.

iii) Depreciation on all other assets other than Building and Plant & Machinery has been provided on Written Down Value method

iv) In case of impairment, if any, depreciation is provided on the revised carrying amount of the assets over its remaining useful life subject to following deviation:

i) Useful life of IBAP plant has been considered as technically assessed which is less than the period prescribed under Schedule II to the Companies Act 2013.

g. Investments:

Current Investments are carried at lower of cost and quoted / fair value. Investment that are intended to be held for more than a year, from the date of acquisition, are classified as Noncurrent investments and are carried at cost. However, provision for diminution in value of investments is made to recognize a decline, other than temporary, in the value of investments.

h. Inventories:

Inventories are valued on the following basis:

i) Finished Goods - At cost (calculated on weighted average Method) or net realizable value whichever is lower

ii) Material in Process - At cost.

iii) Waste - At actual realizable value.

iv) Raw Materials / Stores & Spare Parts - At cost or Net Realizable Value whichever is lower.

i. Cash Flow Statement:

Cash flows are reported using the indirect method, whereby profit or loss before extraordinary items and tax is adjusted for the effects of transactions on noncash nature and any deferrals or accruals of past / future cash receipts of payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

j. Foreign Currency Transactions:

Foreign currency transactions are recorded on the basis of exchange rate prevailing at the date of the transaction.

Foreign currency monetary items are restated at the year end closing rate. Non monetary items which are carried at historical cost are reported using the exchange rate prevailing at the date of the transaction.

The exchange differences arising on settlement / year end reinstatement of monetary items are recognized in the Profit & Loss Account in the period in which they arise

Forward contracts, other than those entered into hedge the foreign currency risk of unexecuted firm commitments or of highly probable forecast transactions, are treated as foreign currency transactions and accounted accordingly. Exchange differences arising on such contracts are recognized in the period in which they arise and the premium or discount is accounted as expenses / income over the life of the contract. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognized as income or as expenses for the year.

k. Borrowing Costs:

Borrowing costs that are attributable to acquisition or construction of qualifying assets are capitalized as part of the cost of such asset till such time as the asset is ready for their intended use. All other borrowing costs are recognized as an expense in the period in which they are incurred.

I. Employee Benefits:


Mar 31, 2014

A. Accounting Concepts: The Company follows the Mercantile System of accounting and recognise Income and Expenditure on accrual basis except those with significant uncertainties and confirm to prevailing practices and also provisions of applicable Accounting Standards (AS) notified under Companies (Accounting Standard) Rules 2006.

b. Fixed Assets: These are stated at cost net of Cenvat, Depreciation and Impairment. Cost of acquisition includes duties, taxes, incidental expenses, erection/commissioning expenses and interest etc., upto the date the asset is ready for its intended use.The carrying amounts of assets are reviewed at the balance sheet date to determine it there is any indication of impairment based on external / internal factors.

c. Capital Work-in-Progress: These are stated at cost including direct overhead expenses.

d. Depreciation:

i) Leasehold land is being amortized over the lease period.

ii) The classification of Plant & Machinery into Continuous and Non-continuous process is done as per Technical Certification and Depreciation thereon is provided accordingly.

iii) Depreciation in respect of Buildings and Plant and Machinery has been provided on Straight Line Method as per the rates prescribed by the Department of Company Affairs/as per Schedule XIV to the Companies Act, 1956 as applicable on the date of acquisition / installation.

iv) Depreciation on all other assets has been provided on written down value method as per the rates prescribed in Schedule-XIV to The Companies Act, 1956.

v) Depreciation on additions/deletions to fixed assets has been provided on prorata basis with reference to the date of installation/sale. Depreciation on Assets individually costing less than Rs.5000/- each has been fully charged off in the year of acquisition/installation.

vi) In case of impairment, if any, Depreciation is provided on the revised carrying amount of the assets over its remaining useful life.

e. Investments:

Quoted / Unquoted Long-term investments are stated at cost, unless, there is a decline other than temporary in the carrying value thereof, which is duly provided for in the Accounts.

f. Inventories:

Inventories are valued on the following basis:

i) Finished Goods - At cost (calculated on Annual Weighted Average Method) or Net Realisable Value whichever is lower.

ii) Material in Process - At cost.

iii) Waste - At actual Realisable Value.

iv) Raw Materials / Stores & Spares - At cost.

g. Foreign Currency Transactions:

Foreign currency transactions are recorded on the basis of exchange rate prevailing at the date of the transaction. Foreign currency monetary items are reported at the year end closing rate. Non monetary items which are carried at historical cost are reported using the exchange rate prevailing at the date of the transaction.

The exchange differences arising on settlement / year end restatement of monetary items are recognised in the Profit & Loss Account in the period in which they arise.

Forward contracts, other than those entered into hedge the foreign currency risk of unexecuted firm commitments or of highly probable forecast transactions, are treated as foreign currency transactions and accounted accordingly. Exchange differences arising on such contracts are recognized in the period in which they arise and the premium or discount is accounted as expenses / income over the life of the contract. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognized as income or as expenses for the year.

h. Borrowing Costs:

Borrowing costs relating to acquisition / construction of qualifying assets are capitalized until the time all substantial activities necessary to prepare the qualifying assets for their intended use are complete. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to revenue.

i. Excise and Customs:

i) Excise duty on Finished Goods stocks lying at the factory is accounted for at the point of manufacture of goods and is accordingly considered for valuation of Finished Goods stock lying in the factory as on the Balance Sheet date.

ii) Custom Duty on goods is accounted for as and when the liability arises.

j. Sales & Export Incentives:

Sales is net of discounts & rebates allowed. Export incentives are accounted for to the extent considered recoverable by the management.

k. Research and Development Expenses: Research and Development expenditure of revenue nature are charged to Profit & Loss Account, while Capital Expenditure are added to the cost of Fixed Assets in the year in which these are incurred.

l. Deferred Revenue Expenditure:

Expenditure incurred during the intervening period between the date a project is ready to commence commercial production and the date at which commercial production actually begins, if prolonged, is being treated as deferred revenue expenditure to be amortised equally over a period of 5 years.

m. Taxes on Income:

i) Current Income Tax is provided as per the provisions of the Income Tax Act 1961.

ii) Deferred Tax Asset and Liabililty arising on account of timing differences, being the differences between Taxable Income and Accounting Income that originate in one period and are capable of reversal in one or more subsequent periods, are recognised at the rate of income tax prevailing at the Balance Sheet date or at the substantively enacted tax rate, subject to the consideration of prudence, as per the Accounting Standard-22 "Accounting for Taxes on Income".

n. Provisions:

A provision is recognised when an enterprise has a present oblilgation as a result of past event and 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.

Provisions made in terms of Accounting Standard 29 are not discounted to its present value and are determined based on management estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current management estimates.

o. Contingencies:

Liabilities which are material and whose future outcome cannot be ascertained with reasonable certainty are treated as Contingent and disclosed by way of "Notes" to the accounts.

p. In conformity with Accounting Standard 28 "Impairment of Assets", the company has carried the appropriate procedure for ensuring that assets are carried at no more than their recoverable amount.


Mar 31, 2013

A. Accounting Concepts: The Company follows the Mercantile System of accounting and recognise Income and Expenditure on accrual basis except those with significant uncertainties and confirm to prevailing practices and also provisions of applicable Accounting Standards (AS) notified under Companies (Accounting Standard) Rules 2006.

b. Fixed Assets: These are stated at cost net of Cenvat, Depreciation and Impairment. Cost of acquisition includes duties, taxes, incidental expenses, erection/commissioning expenses and interest etc., upto the date the asset is ready for its intended use.The carrying amounts of assets are reviewed at the balance sheet date to determine it there is any indication of impairment based on external / internal factors.

c. Capital Work-in-Progress: These are stated at cost including direct overhead expenses.

d. Depreciation:

i) Leasehold land is being amortized over the lease period.

ii) The classification of Plant & Machinery into Continuous and Non-continuous process is done as per Technical Certification and Depreciation thereon is provided accordingly.

iii) Depreciation in respect of Buildings and Plant and Machinery has been provided on Straight Line Method as per the rates prescribed by the Department of Company Affairs/as per Schedule XIV to the Companies Act, 1956 as applicable on the date of acquisition / installation.

iv) Depreciation on all other assets has been provided on written down value method as per the rates prescribed in Schedule-XIV to the Companies ACT, 1956.

v) Depreciation on additions/deletions to fixed assets has been provided on prorata basis with reference to the date of installation/sale. Depreciation on Assets individually costing less than Rs.5000/- each has been fully charged off in the year of acquisition/installation.

vi) In case of impairment, if any, Depreciation is provided on the revised carrying amount of the assets over its remaining useful life.

e. Investments:

Quoted / Unquoted Long-term investments are stated at cost, unless, there is a decline other than temporary in the carrying value thereof, which is duly provided for in the Accounts.

f. Inventories:

Inventories are valued on the following basis:

i) Finished Goods - At cost (calculated on Annual Weighted Average Method) or Net Realisable Value whichever is lower.

ii) Material in Process - At cost.

iii) Waste - At actual Realisable Value.

iv) Raw Materials / Stores & Spares - At cost.

g. Foreign Currency Transactions:

Foreign currency transactions are recorded on the basis of exchange rate prevailing at the date of the transaction. Foreign currency monetary items are reported at the year end closing rate. Non monetary items which are carried at historical cost are reported using the exchange rate prevailing at the date of the transaction.

The exchange differences arising on settlement / year end restatement of monetary items are recognised in the Profit & Loss Account in the period in which they arise.

Forward contracts, other than those entered into hedge the foreign currency risk of unexecuted firm commitments or of highly probable forecast transactions, are treated as foreign currency transactions and accounted accordingly. Exchange differences arising on such contracts are recognized in the period in which they arise and the premium or discount is accounted as expenses / income over the life of the contract. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognized as income or as expenses for the year.

h. Borrowing Costs:

Borrowing costs relating to acquisition / construction of qualifying assets are capitalized until the time all substantial activities necessary to prepare the qualifying assets for their intended use are complete. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to revenue.

i. Excise and Customs:

i) Excise duty on Finished Goods stocks lying at the factory is accounted for at the point of manufacture of goods and is accordingly considered for valuation of Finished Goods stock lying in the factory as on the Balance Sheet date.

ii) Custom Duty on goods is accounted for as and when the liability arises.

j. Sales & Export Incentives:

Sales is net of discounts & rebates allowed. Export incentives are accounted for to the extent considered recoverable by the management.

k. Research and Development Expenses: Research and Development expenditure of revenue nature are charged to Profit & Loss Account, while Capital Expenditure are added to the cost of Fixed Assets in the year in which these are incurred.

l. Deferred Revenue Expenditure:

Expenditure incurred during the intervening period between the date a project is ready to commence commercial production and the date at which commercial production actually begins, if prolonged, is being treated as deferred revenue expenditure to be amortised equally over a period of 5 years.

m. Taxes on Income:

i) Current Income Tax is provided as per the provisions of the Income Tax Act 1961.

ii) Deferred Tax Asset and Liabililty arising on account of timing differences, being the differences between Taxable Income and Accounting Income that originate in one period and are capable of reversal in one or more subsequent periods, are recognised at the rate of income tax prevailing at the Balance Sheet date or at the substantively enacted tax rate, subject to the consideration of prudence, as per the Accounting Standard-22 "Accounting for Taxes on Income".

n. Provisions:

A provision is recognised when an enterprise has a present oblilgation as a result of past event and 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.

Provisions made in terms of Accounting Standard 29 are not discounted to its present value and are determined based on management estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current management estimates.

o. Contingencies:

Liabilities which are material and whose future outcome cannot be ascertained with reasonable certainty are treated as Contingent and disclosed by way of "Notes" to the accounts.

p. In conformity with Accounting Standard 28 "Impairment of Assets", the company has carried the appropriate procedure for ensuring that assets are carried at no more than their recoverable amount.


Mar 31, 2012

A. Accounting Concepts: The Company follows the Mercantile System of accounting and recognise Income and Expenditure on accrual basis except those with significant uncertainties and confirm to prevailing practices and also provisions of applicable Accounting Standards(AS) notified under Companies (Accounting Standard) Rules 2006.

b. Fixed Assets: These are stated at cost net of Cenvat, depreciation and Impairment. Cost of acquisition includes duties, taxes, incidental expenses, erection/commissioning expenses and interest etc., upto the date the asset is ready for its intended use.

The carrying amounts of assets are reviewed at the Balance Sheet date to determine if there is any indication of impairment based on external / internal factors.

c. Capital work-in-Progress: These are stated at cost including direct overhead expenses.

d. Depreciation:

i) Leasehold land is being amortized over the lease period.

ii) The classification of Plant and Machinery into Continuous and Non-Continuous process is done as per Technical Certification and Depreciation thereon is provided accordingly.

iii) Depreciation in respect of Buildings and Plant and Machinery has been provided on Straight Line Method as per the rates prescribed by the Department of Company Affairs/as per Schedule XIV to the Companies Act, 1956 as applicable on the date of acquisition / installation.

iv) Depreciation on all other assets has been provided on written down value method as per the rates prescribed in Schedule -XIV to the Companies Act, 1956.

v) Depreciation on additions/deletions to Fixed Assets has been provided on prorata basis with reference to the date of installation/sale. Depreciation on Assets individually costing less than Rs 5000/- each has been fully charged off in the year of acquisition/ installation.

vi) In case of impairment, if any, Depreciation is provided on the revised carrying amount of the assets over its remaining useful life.

e. Investments:

Quoted / Unquoted Long-term investments are stated at cost, unless, there is a decline other than temporary in the carrying value thereof, which is duly provided for in the Accounts.

f. Inventories:

Inventories are valued on the following basis:

i) Finished Goods - At Cost (calculated on Annual Weighted Average Method) or Net Realisable Value whichever is lower.

ii) Material in Process - At Cost.

iii) Waste - At actual Realisable Value.

iv) Raw Materials / Stores & Spare Parts - At Cost

g. Foreign Currency Transactions:

Foreign currency transactions are recorded on the basis of exchange rate prevailing at the date of the transaction. Foreign currency monetary items are reported at the year end closing rate. Non monetary items which are carried at historical cost are reported using the exchange rate prevailing at the date of the transaction.

The exchange differences arising on settlement / year end restatement of monetary items are recognised in the Profit & Loss Account in the period in which they arise.

Forward contracts, other than those entered into hedge the foreign currency risk of unexecuted firm commitments or of highly probable forecast transactions, are treated as foreign currency transactions and accounted accordingly. Exchange differences arising on such contracts are recognized in the period in which they arise and the premium or discount is accounted as expenses / income over the life of the contract. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognized as income or as expenses for the year.

h. Borrowing Costs:

Borrowing costs relating to acquisition / construction of qualifying assets are capitalized until the time all substantial activities necessary to prepare the qualifying assets for their intended use are complete. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to revenue.

i. Excise and Customs:

i) Excise Duty on Finished Goods Stock lying at the factory is accounted for at the point of manufacture of goods and is accordingly considered for Valuation of Finished Goods stock lying in the factory as on the Balance Sheet date.

ii) Custom Duty on goods is accounted for as and when the liability arises. j. Sales and Export Incentives:

Sales is net of discounts and rebates allowed. Export Incentives are accounted for to the extent considered recoverable by the management.

k. Research and Development Expenses: Research and Development Expenditure of revenue nature are charged to Profit & Loss Account, while Capital Expenditure are added to the cost of Fixed Assets in the year in which these are incurred.

l. Deferred Revenue Expenditure:

Expenditure incurred during the intervening period between the date a project is ready to commence commercial production and the date at which commercial production actually begins, if prolonged, is being treated as deferred revenue expenditure to be amortised equally over a period of 5 years.

m. Taxes on Income:

i) Current Income Tax is provided as per the provisions of the Income Tax Act 1961.

ii) Deferred Tax Asset and Liabililty arising on account of timing differences, being the differences between Taxable Income and Accounting Income that originate in one period and are capable of reversal in one or more subsequent periods, are recognised at the rate of

Income Tax prevailing at the Balance Sheet date or at the substantively enacted tax rate, subject to the consideration of prudence, as per the Accounting Standard-22 "Accounting for Taxes on Income".

n. Provisions:

A provision is recognised when an enterprise has a present oblilgation as a result of past event and 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.

Provisions made in terms of Accounting Standard 29 are not discounted to its present value and are determined based on management estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current management estimates.

o. Contingencies:

Liabilities which are material and whose future outcome cannot be ascertained with reasonable certainty are treated as Contingent and disclosed by way of "Notes" to the accounts.

p. In conformity with Accounting Standard 28 "Impairment of Assets", the company, has carried the appropriate procedure for ensuring that assets are carried at no more than their recoverable amount.


Mar 31, 2010

A. Accounting Concepts: The Company follows the Mercantile System of accounting and recognizes Income and Expenditure on accrual basis except those with significant uncertainties.

b. Fixed Assets: These are stated at cost net of Cenvat, depreciation and Impairment. Cost of acquisition includes duties, taxes, incidental expenses, erection/commissioning expenses and interest etc., upto the date the asset is ready for its intended use.

The Carrying amounts of assets are reviewed at balance sheet date to determine if there is any indication of impairment based on external/internal factors.

c. Capital Work-in-Progress: These are stated at cost including direct overhead expenses .start up costs, trial run expenditure, borrowing costs in respect of qualifying assets etc. Realisation from Sale of Trial Production is reduced from the above cost.

d. Depreciation :

i) Leasehold land is being amortized over the lease period.

ii) The classification of Plant & Machinery into continuous and non-continuous process is done as per technical certification and depreciation thereon is provided accordingly.

iii) Depreciation in respect of Buildings and Plant and Machinery has been provided on Straight Line Method as per the rates prescribed by the Department of Company Affairs/as per Schedule- XIV of the Companies Act, 1 956 as applicable on the date of acquisition/installation.

iv) Depreciation on all other assets has been provided on written down value method as per the rates prescribed in Schedule-XIV of the Companies Act, 1956.

v) Depreciation on additions/deletions to fixed assets has been provided on prorata basis with reference to the date of installation/sale. Depreciation on Assets individually costing less than Rs.5000/- each has been fully charged off in the year of addition.

vi) In case of impairment, if any, depreciation is provided on the revised carrying amount of the assets over its remaining useful life.

e. Investments:

i) Quoted / Unquoted Long-term investments are stated at cost, unless, there is a decline other than temporary in the carrying value thereof, which is duly provided for in the Accounts.

ii) Current quoted investments are stated at lower of cost or market value on individual investment basis.

f. Inventories:

Inventories are valued on the following basis:

i) Finished Goods - At cost (calculated on Annual Weighted Average Method) or net realizable value whichever is lower.

ii) Material in Process - At estimated cost.

iii) Waste - At actual realizable value

iv) Raw Materials /Stores & Spare Parts - At cost

g. Foreign Currency Transactions:

Foreign currency transactions are recorded on the basis of exchange rate prevailing at the date of the transaction. Foreign currency monetary items are reported at the year end closing rate. Non monetary items which are carried at historical cost are reported using the exchange rate prevailing at the date of the transaction.

The exchange differences arising on settlement/year end restatement of monetary items are recognized in the Profit & Loss Account in the period in which they arise, except those relating to acquisition of Fixed Assets outside India, in which case such exchange difference are capitalized.

Forward contracts, other than those entered into to hedge the foreign currency risk of unexecuted firm commitments or of highly probable forecast transactions, are treated as foreign currency transactions and accounted accordingly. Exchange difference arising on such contracts are recognized in the period in which they arise and the premium or discount is accounted as expense / income over the life of the contract. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognized as income or as expenses for the year.

h. Employee Benefits:

i) Defined Contribution Plans

Companys contribution to Provident Fund and Superannuating Schemes are charged to the Profit & Loss Account of the year when the contribution to the respective funds are due. The Company has no obligations other than the contribution payable to the respective trusts.

ii) Defined Benefit Plans

Gratuity Liability and long term compensated leave encashment are provided for based on actuarial valuation made at the end of each financial year using the projected unit credit method. Actuarial valuation of Gratuity has been done as per the companys policy, which is not less beneficial than the provisions of the Payment of Gratuity Act, 1972. Actuarial gain and losses are recognized immediately in the statement of Profit and Loss Account as income or expenses.

iii) Short Term Employee Benefits

Employee Benefits of short term nature are recognized as expenses as and when it accrues.

i. Borrowing Costs:

Borrowing costs relating to acquisition / construction of qualifying assets are capitalized until the time all substantial activities necessary to prepare the qualifying assets for their intended use are complete. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to revenue.

j. Excise and Customs

i) Excise duty on finished goods stocks lying at the factory is accounted for at the point of manufacture of goods and is accordingly considered for valuation of finished goods stock lying in the factory as on the Balance Sheet date.

ii) Custom duty on goods is accounted for as and when the liability arises.

k. Sales & Export incentives: Sales is net of discounts & rebates allowed. Export incentives are accounted for to the extent considered recoverable by the management.

l. Research and Development Expenses: Research and Development expenditure of revenue nature are charged to Profit & Loss Account, while Capital expenditure are added to the cost of Fixed Assets in the year in which these are incurred.

m. Deferred Revenue Expenditure:

Expenditure incurred during the intervening period between the date a project is ready to commence commercial production and the date at which commercial production actually begins, if prolonged, is being treated as deferred revenue expenditure to be amortised equally over a period of 5 years.

n. Taxes on Income:

i) Current Income Tax is provided as per the provisions of the Income Tax Act 1961.

ii) Deferred Tax asset and liability arising on account of timing differences, being the differences between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods, are recognized at the rate of income tax prevailing at the Balance Sheet date or at the substantively enacted tax rate, subject to the consideration of prudence, as per the Accounting Standard-22 "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India.

o. Provisions :

A provision is recognized when an enterprise has a present obligation as a result of past event and 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.

Provisions made in terms of Accounting Standard 29 are not discounted to its present value and are determined based on management estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current management estimates.

p. Contingencies:

Liabilities which are material and whose future outcome cannot be ascertained with reasonable certainty, are treated as contingent and disclosed by way of "Notes" to the accounts.

q. Prior year expenses: Prior Year expenses / (income) (net) Debit Rs 9.53 lacs (Previous year /(Net)Debit Rs. 0.06 lac) stands adjusted to the respective expenses heads.

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