Accounting Policies of Aditya Birla Chemicals (India) Ltd. Company

Mar 31, 2015

(i) BASIS OF PREPARATION

The financial statements have been prepared in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on an accrual basis in compliance with all material aspect of the applicable Accounting Standards as prescribed under Section 133 of the Companies Act, 2013(the "Act") read with Rule 7 of the Companies (Accounts) rules, 2014 and the "Act" (to the extend notified and applicable). The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year.

Vide MCA notification no. C.S.R 37 (E) dated Januaryl6, 2015, the Company has availed exemption of not preparing & presenting consolidated financial statement in term of section 129(3) of the Act with its only overseas subsidiary viz. Aditya Birla Chemicals( Belgium) BVBA which was set up we.f December 24, 2014 with an investment of Rs. 4.80 lacs. The said subsidiary has yet not commissioned its operations; as such, the revenue and expenditure thereof are NIL as at Balance Sheet date.

(ii) USE OF ESTIMATES

The preparation of financial statements is in conformity with Indian Generally Accepted Accounting Principles, which require the management to make estimates and assumptions to be made that affect the reported amount of assets and liabilities and disclosure of contingent liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates and differences between actual results and estimates are recognized in the periods in which the results are known / materialize.

(iii) FIXED ASSETS

Fixed Assets are stated at cost, less accumulated depreciation and impairment loss, if any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use and is net of cenvat credit.

Machinery spares which can be used only in connection with an item of fixed assets and whose use is expected to be irregular(Insurance Spares) are Capitalized during the year as an addition to the parent assets and written off over the remaining estimated useful life of the parent assets.

Capital Work in Progress is stated at cost and other relevant overheads incurred during construction period.

Fixed Assets, individually costing less than Rs five thousand, are fully depreciated in the year of purchase.

(iv) DEPRECIATION / AMORTISATION

Depreciation on fixed assets is provided on straight line basis, considering the useful lives of the assets as per Schedule II to the Act, or as per the management's assessment of useful life based on the technical evaluation.

According to provisions of Schedule II of the Companies Act, 2013, the carrying value of assets having nil useful life as on April 1, 2014 has been charged to the Statement of Profit and Loss and carrying value of assets having balance useful life (net of residual value) is being depreciated over the revised remaining useful life.

(v) INVESTMENTS

Current Investments are stated at lower of cost and fair value. Long term investments are stated at cost after deducting provisions made, if any, for other than temporary diminution in the value. Investments which are readily realisable and intended to be held for period less than one year are current investments. Other Investments are considered as long term investments. Long term debt securities are carried at amortized cost.

(vi) IMPAIRMENT OF ASSETS

The carrying amounts of assets are reviewed at each Balance Sheet date if there is any indication of impairment based on internal/external factors. An asset is treated as impaired when the carrying cost of the assets exceeds its recoverable value. An impairment loss, if any, is charged to the Profit and Loss Account in the year in which an asset is identified as impaired. Reversal of impairment losses recognised in prior years is recorded when there is an indication that the impairment losses recognised for the assets no longer exist or have decreased.

(vii) INVENTORIES

a) Finished Goods (including goods in transit), work-in-progress are valued at cost or net realizable value whichever is lower.

b) Raw materials, components, stores and spares are valued at lower of weighted Average cost or net realisable value. 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. Obsolete, defective and unserviceable inventory is duly provided for. Scrapped items of stock are valued at net realisable value.

c) Cost comprises of all costs of purchases, costs of conversions and other costs incurred in bringing the inventory to their present location and conditions.

d) The value of closing stock of finished goods lying at depot is inclusive of freight charges and excise duty paid

(viii) TRANSACTION OF FOREIGN CURRENCY ITEMS

Transactions in foreign currency are recorded at the rate of exchange prevailing on the date of transaction. Foreign currency monetary items (except forward contract transactions) are reported using closing rate of exchange at the end of the year. The resulting exchange gain/ loss is reflected in the Profit and Loss Account. Other non-monetary items, like fixed assets are carried in terms of historical cost using the exchange rate at the date of transaction. Exchange rate difference arising on account of conversion/ translation of liabilities for acquisition of Fixed Assets is recognised in the Profit & Loss account.

(ix) RETIREMENT AND OTHER EMPLOYEE BENEFITS

Employee benefits of short term nature are recognized as expense as and when accrued.

Defined Contribution Plan

The Company makes defined contribution to Provident Fund and Superannuation schemes which are recognized in the Profit and Loss Account on accrual basis.

Defined Benefit Plan

The Company's liabilities under Payment of Gratuity Act (funded/non funded), and long term compensated absences (non funded) are determined on the basis of actuarial valuation made at the end of each financial year using the projected unit credit method except for short term compensated absences which are provided for based on estimates. Actuarial gains and losses are recognised immediately in the statement of Profit and Loss as income or expense. Obligation is measured at the present value of estimated future cash flows using a discounted rate that is determined by reference to market yields at the Balance Sheet date on Government bonds where the currency and tenure of the Government bonds are consistent with the currency and estimated tenure of the defined benefit obligation.

(x) RECOGNITION OF INCOME & EXPENDITURE

Sales are recorded net of trade discounts, Sales Tax, VAT and excise duty. Revenue from sale of products is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer.

Income and Expenditure are recognised on accrual basis but Sales claims under escalation clause, insurance and other claims are accounted on acceptance basis.

(xi) BORROWING COST

Borrowing Costs, attributable to acquisition and construction of qualifying assets, are capitalised as a part of the cost of such asset up to the date when such assets are ready for its intended use. Long term Finance cost ancillary to arrangement of long-term borrowings are amortised over period of borrowings or 5 years whichever is less. Other borrowing costs are charged to the Profit and Loss Account.

(xii) TAXATION

a) Tax expense comprises of current and deferred tax.

b) Provision for current tax is made on the basis of estimated taxable income for the current accounting year in accordance with the provisions of Income Tax Act, 1961.

c) The deferred tax for timing differences is accounted for, using the tax rates and laws that have been substantively enacted as of the Balance Sheet date. Deferred tax assets arising from timing differences are recognised to the extent there is reasonable certainty that these would be realised in future.

d) Deferred tax assets in case of unabsorbed losses and unabsorbed depreciation are recognised only if there is virtual certainty that such deferred tax asset can be realised against future taxable profits.

e) Credit for entitlement of Minimum Alternate Tax (MAT) is recognized only if the same can be utilized within statutorily permissible time.

(xiii) INTANGIBLE ASSETS

Intangible Assets are recognized by the Company only if it is probable that the future economic benefits that are attributable to the assets will flow to the enterprise and the cost of the same can be measured reliably.

Intangible Assets are amortized on a systematic basis over its useful life and the amortization for each period will be recognized as an expense.

(xiv) GOVERNMENT GRANTS / CAPITAL SUBSIDY

a) Capital subsidy/ Government grants are recognised when there is reasonable assurance that the same will be received. Revenue grants are recognised in the Profit & Loss Account.

b) Capital subsidy/ Government grants relating to specific non depreciable fixed assets and in the nature of Promoter's Contribution are credited to capital reserve account.

c) Capital subsidy/ Government grants related to specific depreciable assets are credited to capital reserve account and are recognized as income in profit and loss statement on a systematic and rational basis over the useful life of assets.

(xv) CONTINGENT LIABILITIES AND PROVISIONS

Contingent liabilities are possible but not probable obligations as on Balance Sheet date, based on the available evidence. Contingent Liabilities are not provided for in the accounts. These are disclosed by way of Notes to the Accounts.

Provisions are recognised when there is 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 are determined based on best estimate required to settle the obligation at the Balance Sheet date.

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Mar 31, 2014

(i) BASIS OF PREPARATION

The financial statements have been prepared under the historical cost convention on an accrual basis in compliance with all material aspect of the applicable Accounting Standards notified by Companies (Accounting Standard) Rules, 2006 and the relevant provisions of the Companies Act, 1956 (the Act). The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year.

(ii) USE OF ESTIMATES

The preparation of financial statements is in conformity with Indian Generally Accepted Accounting Principles, which require the management to make estimates and assumptions to be made that affect the reported amount of assets and liabilities and disclosure of contingent liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates and differences between actual results and estimates are recognized in the periods in which the results are known / materialize.

(iii) FIXED ASSETS

Fixed Assets are stated at cost, less accumulated depreciation and impairment loss, if any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use and is net of cenvat credit.

Machinery spares which can be used only in connection with an item of fixed assets and whose use is expected to be irregular(Insurance Spares) are Capitalized during the year as an addition to the parent assets and written off over the remaining estimated useful life of the parent assets.

Capital Work in Progress is stated at cost and other relevant overheads incurred during construction period.

Fixed Assets, individually costing less than Rs five thousand, are fully depreciated in the year of purchase.

(iv) DEPRECIATION / AMORTISATION

a) Depreciation on Fixed Assets up to March 31, 1987 has been provided at the then prevailing rates on Straight Line Method pursuant to Circular No. 1/86 dated May 21, 1986 issued by the Department of Company Affairs, Government of India.

b) For Fixed Assets added from April 1,1987 onwards, the specified period has been recomputed according to the revised rates of depreciation as specified in schedule XIV to the Act as amended by Notification dated December 16,1993 and the amount of depreciation has been calculated by allocating the unamortized value over the remaining part of the recomputed specified period.

c) For Fixed Assets added from April 1,1993 onwards, depreciation is provided on Straight Line Method at the rates, specified in Schedule XIV, as amended by Notification dated December 16, 1993 of the Act except in the case of the following assets, where depreciation is charged over the estimated useful lives of such assets:

Assets Estimated useful life (Years)

Condensers (Plant & Machinery) 3

Heat Sealing Machine (Plant & Machinery) 1

Weighing Machine (Plant & Machinery) 1

Leasehold Land Over the primary period of the lease

Insurance Machinery Spares Over the remaining estimated useful life of the related parent assets

Computer Software 3 years from the date of their acquisition/ purchase

d) Depreciation on the Fixed Assets added/disposed off/ discarded during the year is provided on pro- rata basis with reference to the date of addition/ disposal/ discarding.

(v) INVESTMENTS

Current Investments are stated at lower of cost and fair value. Long term investments are stated at cost after deducting provisions made, if any, for other than temporary diminution in the value. Investments which are readily realisable and intended to be held for period less than one year are current investments. Other Investments are considered as long term investments. Long term debt securities are carried at amortized cost.

(vi) IMPAIRMENT OF ASSETS

The carrying amounts of assets are reviewed at each Balance Sheet date if there is any indication of impairment based on internal/external factors. An asset is treated as impaired when the carrying cost of the assets exceeds its recoverable value. An impairment loss, if any, is charged to the Profit and Loss Account in the year in which an asset is identified as impaired. Reversal of impairment losses recognised in prior years is recorded when there is an indication that the impairment losses recognised for the assets no longer exist or have decreased.

(vii) INVENTORIES

a) Finished Goods (including goods in transit), work-in-progress are valued at cost or net realizable value whichever is lower.

b) Raw materials, components, stores and spares are valued at lower of weighted Average cost or net realisable value. 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. Obsolete, defective and unserviceable inventory is duly provided for. Scrapped items of stock are valued at net realisable value.

c) Cost comprises of all costs of purchases, costs of conversions and other costs incurred in bringing the inventory to their present location and conditions.

d) The value of closing stock of finished goods lying at depot is inclusive of freight charges and excise duty paid.

(viii)TRANSACTION OF FOREIGN CURRENCY ITEMS

Transactions in foreign currency are recorded at the rate of exchange prevailing on the date of transaction. Foreign currency monetary items (except forward contract transactions) are reported using closing rate of exchange at the end of the year. The resulting exchange gain/ loss is reflected in the Profit and Loss Account. Other non-monetary items, like fixed assets are carried in terms of historical cost using the exchange rate at the date of transaction. Exchange rate difference arising on account of conversion/ translation of liabilities for acquisition of Fixed Assets is recognised in the Profit & Loss account.

(ix) RETIREMENT AND OTHER EMPLOYEE BENEFITS

Employee benefits of short term nature are recognized as expense as and when accrued.

Defined Contribution Plan

The Company makes defined contribution to Provident Fund and Superannuation schemes which are recognized in the Profit and Loss Account on accrual basis.

Defined Benefit Plan

The Company''s liabilities under Payment of Gratuity Act (funded/non funded), and long term compensated absences (non funded) are determined on the basis of actuarial valuation made at the end of each financial year using the projected unit credit method except for short term compensated absences which are provided for based on estimates. Actuarial gains and losses are recognised immediately in the statement of Profit and Loss Account as income or expense. Obligation is measured at the present value of estimated future cash flows using a discounted rate that is determined by reference to market yields at the Balance Sheet date on Government bonds where the currency and tenure of the Government bonds are consistent with the currency and estimated tenure of the defined benefit obligation.

(x) RECOGNITION OF INCOME & EXPENDITURE

Sales are recorded net of trade discounts, Sales Tax, VAT and excise duty. Revenue from sale of products is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer.

Income and Expenditure are recognised on accrual basis but Sales claims under escalation clause, insurance and other claims are accounted on acceptance basis.

(xi) BORROWING COST

Borrowing Costs, attributable to acquisition and construction of qualifying assets, are capitalised as a part of the cost of such asset up to the date when such assets are ready for its intended use. Long term Finance cost ancillary to arrangement of long-term borrowings are amortised over period of borrowings or 5 years whichever is less.Other borrowing costs are charged to the Profit and Loss Account.

(xii) TAXATION

a) Tax expense comprises of current and deferred tax.

b) Provision for current tax is made on the basis of estimated taxable income for the current accounting year in accordance with the provisions of Income Tax Act, 1961.

c) The deferred tax for timing differences is accounted for, using the tax rates and laws that have been substantively enacted as of the Balance Sheet date. Deferred tax assets arising from timing differences are recognised to the extent there is reasonable certainty that these would be realised in future.

d) Deferred tax assets in case of unabsorbed losses and unabsorbed depreciation are recognised only if there is virtual certainty that such deferred tax asset can be realised against future taxable profits.

e) Credit for entitlement of Minimum Alternate Tax (MAT) is recognized only if the same can be utilized within statutorily permissible time.

(xiii)INTANGIBLE ASSETS

Intangible Assets are recognized by the Company only if it is probable that the future economic benefits that are attributable to the assets will flow to the enterprise and the cost of the same can be measured reliably.

Intangible Assets are amortized on a systematic basis over its useful life and the amortization for each period will be recognized as an expense.

(xiv)GOVERNMENT GRANTS / CAPITAL SUBSIDY

a) Capital subsidy/ Government grants are recognised when there is reasonable assurance that the same will be received. Revenue grants are recognised in the Profit & Loss Account.

b) Capital subsidy/ Government grants relating to specific non depreciable fixed assets and in the nature of Promoter''s Contribution are credited to capital reserve account.

c) Capital subsidy/ Government grants related to specific depreciable assets are credited to capital reserve account and are recognized as income in profit and loss statement on a systematic and rational basis over the useful life of assets.

(xv) CONTINGENT LIABILITIES AND PROVISIONS

Contingent Liabilities are possible but not probable obligations as on Balance Sheet date, based on the available evidence. Contingent Liabilities are not provided for in the accounts. These are disclosed by way of Notes to the Accounts.

Provisions are recognised when there is 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 are determined based on best estimate required to settle the obligation at the Balance Sheet date.

12,004,987 Equity Shares (Previous year 12,004,987) of the Company are held by Hindalco Industries limited, the holding company, 775,000 shares (Previous year 775,000) are held by Renuka Investment & Finance Limited (Subsidiary of Hindalco Industries Limited).

The company has only one class of share referred as equity share having a par value of Rs. 10/-. Each holder of equity share is entitled to same right in all respect.

(i) Security and Terms of Term loan from Banks amounting to Rs. 73318.75 Lacs (Previous Year Rs. 58,593.75 Lacs)

(a) Nature of Securities

Secured by way of first charge in favour of Security Trustee IDBI Trusteeship Services Ltd on all the immovable properties and all movable properties and assets other than current assets of the Company (both present & future) and second charge on all current assets of whatsoever nature and wherever arising both present and future.

(b) Term of Repayment

i) Outstanding Rs. 49218.75 Lacs

Repayable 25 (Previous year 29) quarterly instalment of Rs. 2,343.75 lacs each from May 31, 2014 (start dte of repayment August 31, 2012) alongwith interest of 11.50% p.a. (Previous Year 11.10% p.a.) (also refer Note B.8.(i))

ii) Outstanding Rs. 24100.00 Lacs

Repayable 32 (Previous year Nil) quarterly instalment of Rs. 753.13 lacs each from Sept 30, 2015 alongwith interest of 11.10% p.a. (Previous Year Nil.) (also refer Note B.8.(i))

Security

(i) Rs. 181.43 lacs Secured against pledge of Fixed Deposits of the Company.

(ii) Rs. 14519.81 lacs against exclusive first charge by way of hypothecation on all stock in trade both present & future consisting of raw materials, finished goods, goods in process and all book debts, outstanding money receivables, claims & bills due / to be due to the Company.

The Board of Director have recommended dividend @ 15 % i.e. Rs 1.50 per equity share of the company for the year, under report.

-Leasehold land includes land, the lease tides whereof are in process of being transferred in the name of the company.

Note: The above noted revenue expenditures are capitalized as a preoperative expense relates only up to the period the concerned fixed assets have been put to use.

Trade Receivables include dues from Holding Company, Hindalco Industries Limited, Rs. 2379.61 lacs (Previous year Rs. 1,507.92 lacs) maximum due at any time during the year Rs. 2379.61 lacs (Previous year Rs. 1,966.12 lacs)

*With a view to optimise the benefits of specialisation and minimise cost to the Company, its share of expenses towards business operations of Rs 53.33 Lacs (Previous year Rs. 43.19 lacs) contributed to Grasim Industries Limited and Rs.0.15 Lacs (Previous year Rs. Nil) contributed to Indo Gulf Fertilizers the same has been accounted under ''Business Head Office expenses in Notes B.31

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Mar 31, 2013

(i) BASIS OF PREPARATION

The financial statements have been prepared under the historical cost convention on an accrual basis in compliance with all material aspect of the applicable Accounting Standards notified by Companies (Accounting Standard) Rules'' 2006 and the relevant provisions of the Companies Act'' 1956 (the Act). The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year.

(ii) USE OF ESTIMATES

The preparation of financial statements is in conformity with Indian Generally Accepted Accounting Principles'' which require the management to make estimates and assumptions to be made that affect the reported amount of assets and liabilities and disclosure of contingent liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates and differences between actual results and estimates are recognized in the periods in which the results are known / materialize.

(iii) FIXED ASSETS

Fixed Assets are stated at cost'' less accumulated depreciation and impairment loss'' if any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use and is net of cenvat credit.

Machinery spares which can be used only in connection with an item of fixed assets and whose use is expected to be irregular(Insurance Spares) are Capitalized during the year as an addition to the parent assets and written off over the remaining estimated useful life of the parent assets.

Capital Work in Progress is stated at cost and other relevant overheads incurred during construction period.

(iv) DEPRECIATION / AMORTISATION

a) Depreciation on Fixed Assets up to March 31'' 1987 has been provided at the then prevailing rates on Straight Line Method pursuant to Circular No. 1/86 dated May 21'' 1986 issued by the Department of Company Affairs'' Government of India.

b) For Fixed Assets added from April 1'' 1987 onwards'' the specified period has been recomputed according to the revised rates of depreciation as specified in schedule XIV to the Act as amended by Notification dated December 16''1993 and the amount of depreciation has been calculated by allocating the unamortized value over the remaining part of the recomputed specified period.

c) For Fixed Assets added from April 1''1993 onwards'' depreciation is provided on Straight Line Method at the rates'' specified in Schedule XIV'' as amended by Notification dated December 16'' 1993 of the Act except in the case of the following assets'' where depreciation is charged over the estimated useful lives of such assets:

d) Depreciation on the Fixed Assets added/disposed off/ discarded during the year is provided on pro- rata basis with reference to the date of addition/ disposal/ discarding.

(v) INVESTMENTS

Current Investments are stated at lower of cost and fair value. Long term investments are stated at cost after deducting provisions made'' if any'' for other than temporary diminution in the value. Investments which are readily realisable and intended to be held for period less than one year are current investments. Other Investments are considered as long term investments. Long term debt securities are carried at amortized cost.

(vi) IMPAIRMENT OF ASSETS

The carrying amounts of assets are reviewed at each Balance Sheet date if there is any indication of impairment based on internal/external factors. An asset is treated as impaired when the carrying cost of the assets exceeds its recoverable value. An impairment loss'' if any'' is charged to the Profit and Loss Account in the year in which an asset is identified as impaired. Reversal of impairment losses recognised in prior years is recorded when there is an indication that the impairment losses recognised for the assets no longer exist or have decreased.

(vii) INVENTORIES

a) Finished Goods (including goods in transit)'' work-in-progress are valued at cost or net realizable value whichever is lower.

b) Raw materials'' components'' stores and spares are valued at lower of weighted Average cost or net realisable value. 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. Obsolete'' defective and unserviceable inventory is duly provided for. Scrapped items of stock are valued at net realisable value.

c) Cost comprises of all costs of purchases'' costs of conversions and other costs incurred in bringing the inventory to their present location and conditions.

d) The value of closing stock of finished goods lying at depot is inclusive of freight charges and excise duty paid.

(viii) TRANSACTION OF FOREIGN CURRENCY ITEMS

Transactions in foreign currency are recorded at the rate of exchange prevailing on the date of transaction. Foreign currency monetary items (except forward contract transactions) are reported using closing rate of exchange at the end of the year. The resulting exchange gain/ loss is reflected in the Profit and Loss Account. Other non-monetary items'' like fixed assets are carried in terms of historical cost using the exchange rate at the date of transaction. Exchange rate difference arising on account of conversion/ translation of liabilities for acquisition of Fixed Assets is recognised in the Profit & Loss account.

(ix) RETIREMENT AND OTHER EMPLOYEE BENEFITS

Employee benefits of short term nature are recognized as expense as and when accrued.

Defined Contribution Plan

The Company makes defined contribution to Provident Fund and Superannuation schemes which are recognized in the Profit and Loss Account on accrual basis.

Defined Benefit Plan

The Company''s liabilities under Payment of Gratuity Act (funded/non funded)'' and long term compensated absences (non funded) are determined on the basis of actuarial valuation made at the end of each financial year using the projected unit credit method except for short term compensated absences which are provided for based on estimates. Actuarial gains and losses are recognised immediately in the statement of Profit and Loss Account as income or expense. Obligation is measured at the present value of estimated future cash flows using a discounted rate that is determined by reference to market yields at the Balance Sheet date on Government bonds where the currency and tenure of the Government bonds are consistent with the currency and estimated tenure of the defined benefit obligation.

(x) RECOGNITION OF INCOME & EXPENDITURE

Sales are recorded net of trade discounts'' Sales Tax'' VAT and excise duty. Revenue from sale of products is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer.

Income and Expenditure are recognised on accrual basis but Sales claims under escalation clause'' insurance and other claims are accounted on acceptance basis.

(xi) BORROWING COST

Borrowing Costs'' attributable to acquisition and construction of qualifying assets'' are capitalised as a part of the cost of such asset up to the date when such assets are ready for its intended use. Long term Finance cost ancillary to arrangement of long-term borrowings are amortised over period of borrowings or5 years whichever is less.Other borrowing costs are charged to the Profit and Loss Account.

(xii) TAXATION

a) Tax expense comprises of current and deferred tax.

b) Provision for current tax is made on the basis of estimated taxable income for the current accounting year in accordance with the provisions of Income Tax Act'' 1961.

c) The deferred tax for timing differences is accounted for'' using the tax rates and laws that have been substantively enacted as of the Balance Sheet date. Deferred tax assets arising from timing differences are recognised to the extent there is reasonable certainty that these would be realised in future.

d) Deferred tax assets in case of unabsorbed losses and unabsorbed depreciation are recognised only if there is virtual certainty that such deferred tax asset can be realised against future taxable profits.

e) Credit for entitlement of Minimum Alternate Tax (MAT) is recognized only if the same can be utilized within statutorily permissible time.

(xiii) INTANGIBLE ASSETS

Intangible Assets are recognized by the Company only if it is probable that the future economic benefits that are attributable to the assets will flow to the enterprise and the cost of the same can be measured reliably.

Intangible Assets are amortized on a systematic basis over its useful life and the amortization for each period will be recognized as an expense.

(xiv) GOVERNMENT GRANTS / CAPITAL SUBSIDY

a) Capital subsidy/ Government grants are recognised when there is reasonable assurance that the same will be received. Revenue grants are recognised in the Profit & Loss Account.

b) Capital subsidy/ Government grants relating to specific non depreciable fixed assets and in the nature of Promoter''s Contribution are credited to capital reserve account.

c) Capital subsidy/ Government grants related to specific depreciable assets are credited to capital reserve account and are recognized as income in profit and loss statement on a systematic and rational basis over the useful life of assets.

(xv) CONTINGENT LIABILITIES AND PROVISIONS

Contingent Liabilities are possible but not probable obligations as on Balance Sheet date'' based on the available evidence. Contingent Liabilities are not provided for in the accounts. These are disclosed by way of Notes to the Accounts.

Provisions are recognised when there is 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 are determined based on best estimate required to settle the obligation at the Balance Sheet date.

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Mar 31, 2012

(i) BASIS OF PREPARATION

The financial statements have been prepared under the historical cost convention on an accrual basis in compliance with all material aspect of the applicable Accounting Standards notified by Companies (Accounting Standard) Rules, 2006 and the relevant provisions of the Companies Act, 1956 (the Act). The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year.

(ii) USE OF ESTIMATES

The preparation of financial statements is in conformity with Indian Generally Accepted Accounting Principles, which require the management to make estimates and assumptions to be made that affect the reported amount of assets and liabilities and disclosure of contingent liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates and differences between actual results and estimates are recognized in the periods in which the results are known / materialize.

(iii) FIXED ASSETS

Fixed Assets are stated at cost, less accumulated depreciation and impairment loss, if any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use and is net of cenvat credit.

Machinery spares which can be used only in connection with an item of fixed assets and whose use is expected to be irregular(Insurance Spares) are Capitalized during the year as an addition to the parent assets and written off over the remaining estimated useful life of the parent assets.

Capital Work in Progress is stated at cost and other relevant overheads incurred during construction period.

(iv) DEPRECIATION/ AMORTISATION

a) Depreciation on Fixed Assets up to March 31, 1987 has been provided at the then prevailing rates on Straight Line Method pursuant to Circular No. 1/86 dated May 21, 1986 issued by the Department of Company Affairs, Government of India.

b) For Fixed Assets added from April 1, 1987 onwards, the specified period has been recomputed according to the revised rates of depreciation as specified in schedule XIV to the Act as amended Notification dated December 16, 1993 and the amount of depreciation has been calculated by allocating the unamortized value over the remaining part of the recomputed specified period.

c) For Fixed Assets added from April 1, 1993 onwards, depreciation is provided on Straight Line Method at the rates, specified in Schedule XIV, as amended by Notification dated December

16, 1993 of the Act except in the case of the following assets, where depreciation is charged over the estimated useful lives of such assets:

d) Depreciation on the Fixed Assets added/disposed off / discarded during the year is provided on pro- rata basis with reference to the date of addition/ disposal/ discarding.

(v) INVESTMENTS

Current Investments are stated at lower of cost and fair value. Long term investments are stated at cost after deducting provisions made, if any, for other than temporary diminution in the value. Investments which are readily realizable and intended to be held for period less than one year are current investments. Other Investments are considered as long term investments. Long term debt securities are carried at amortized cost.

(vi) IMPAIRMENT OF ASSETS

The carrying amounts of assets are reviewed at each Balance Sheet date if there is any indication of impairment based on internal/external factors. An asset is treated as impaired when the carrying cost of the assets exceeds its recoverable value. An impairment loss, if any, is charged to the Profit and Loss Account in the year in which an asset is identified as impaired. Reversal of impairment losses recognized in prior years is recorded when there is an indication that the impairment losses recognized for the assets no longer exist or have decreased.

(vii) INVENTORIES

a) Finished Goods (including goods in transit), work-in-progress are valued at cost or net realizable value whichever is lower.

b) Raw materials, components, stores and spares are valued at lower of weighted Average cost or net realizable value. 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. Obsolete, defective and unserviceable inventory is duly provided for. Scrapped items of stock are valued at net realizable value.

c) Cost comprises of all costs of purchases, costs of conversions and other costs incurred in bringing the inventory to their present location and conditions.

d) The value of closing stock of finished goods lying at depot is inclusive of freight charges and excise duty paid.

(viii) TRANSACTION OF FOREIGN CURRENCY ITEMS

Transactions in foreign currency are recorded at the rate of exchange prevailing on the date of transaction. Foreign currency monetary items (except forward contract transactions) are reported using closing rate of exchange at the end of the year. The resulting exchange gain/ loss is reflected in the Profit and Loss Account. Other non-monetary items, like fixed assets are carried in terms of historical cost using the exchange rate at the date of transaction. Exchange rate difference arising on account of conversion/ translation of liabilities for acquisition of Fixed Assets is recognized in the Profit & Loss account.

(ix) RETIREMENT AND OTHER EMPLOYEE BENEFITS

Employee benefits of short term nature are recognized as expense as and when accrued.

Defined Contribution Plan

The Company makes defined contribution to Provident Fund and Superannuation schemes which are recognized in the Profit and Loss Account on accrual basis.

Defined Benefit Plan

The Company's liabilities under Payment of Gratuity Act (funded/non-funded), and long term compensated absences (non-funded) are determined on the basis of actuarial valuation made at the end of each financial year using the projected unit credit method except for short term compensated absences which are provided for based on estimates. Actuarial gains and losses are recognized immediately in the statement of Profit and Loss Account as income or expense. Obligation is measured at the present value of estimated future cash flows using a discounted rate that is determined by reference to market yields at the Balance Sheet date on Government bonds where the currency and tenure of the Government bonds are consistent with the currency and estimated tenure of the defined benefit obligation.

(x) RECOGNITION OF INCOME & EXPENDITURE

Sales are recorded net of trade discounts, Sales Tax, VAT and include excise duty. Revenue from sale of products is recognized when the significant risks and rewards of ownership of the goods have passed to the buyer.

Income and Expenditure are recognized on accrual basis but Sales claims under escalation clause, insurance and other claims are accounted on acceptance basis.

(xi) BORROWING COST

Borrowing Costs, attributable to acquisition and construction of qualifying assets, are capitalized as a part of the cost of such asset up to the date when such assets are ready for its intended use. Long term Finance cost ancillary to arrangement of long-term borrowings are amortized over period of borrowings or 5 years whichever is less. Other borrowing costs are charged to the Profit and Loss Account.

(xii) TAXATION

a) Tax expense comprises of current and deferred tax.

b) Provision for current tax is made on the basis of estimated taxable income for the current accounting year in accordance with the provisions of Income Tax Act, 1961.

c) The deferred tax for timing differences is accounted for, using the tax rates and laws that have been substantively enacted as of the Balance Sheet date. Deferred tax assets arising from timing differences are recognized to the extent there is reasonable certainty that these would be realized in future.

d) Deferred tax assets in case of unabsorbed losses and unabsorbed depreciation are recognized only if there is virtual certainty that such deferred tax asset can be realized against future taxable profits.

e) Credit for entitlement of Minimum Alternate Tax (MAT) is recognized only if the same can be utilized within statutorily permissible time.

(xiii) INTANGIBLE ASSETS

Intangible Assets are recognized by the Company only if it is probable that the future economic benefits that are attributable to the assets will flow to the enterprise and the cost of the same can be measured reliably.

Intangible Assets are amortized on a systematic basis over its useful life and the amortization for each period will be recognized as an expense.

(xiv) GOVERNMENT GRANTS/ CAPITAL SUBSIDY

a) Capital subsidy/ Government grants are recognized when there is reasonable assurance that the same will be received. Revenue grants are recognized in the Profit & Loss Account.

b) Capital subsidy/ Government grants relating to specific non depreciable fixed assets and in the nature of Promoter's Contribution are credited to capital reserve account.

c) Capital subsidy/ Government grants related to specific depreciable assets are credited to capital reserve account and are recognized as income in profit and loss statement on a systematic and rational basis over the useful life of assets.

(xv) CONTINGENT LIABILITIES AND PROVISIONS

Contingent Liabilities are possible but not probable obligations as on Balance Sheet date, based on the available evidence. Contingent Liabilities are not provided for in the accounts. These are disclosed by way of Notes to the Accounts.

Provisions are recognized when there is 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 are determined based on best estimate required to settle the obligation at the Balance Sheet date.

---

Mar 31, 2011

(i) Basis of Preparation

The financial statements have been prepared under the historical cost convention on an accrual basis in compliance with all material aspect of the applicable Accounting Standards notified by Companies (Accounting Standard) Rules, 2006 and the relevant provisions of the Companies Act, 1956 (the Act). The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year.

(ii) USE OF ESTIMATES

The preparation of financial statements is in conformity with Indian Generally Accepted Accounting Principles, which require the management to make estimates and assumptions to be made that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and differences between actual results and estimates are recognized in the periods in which the results are known / materialize.

(iii) FIXED ASSETS

Fixed Assets are stated at cost, less accumulated depreciation and impairment loss, if any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use and is net of cenvat credit.

Machinery spares which can be used only in connection with an item of fixed assets and whose use is expected to be irregular(Insurance Spares) are Capitalized during the year as an addition to the parent assets and written off over the remaining estimated useful life of the parent assets.

Capital Work in Progress is stated at cost and other relevant overheads incurred during construction period.

(iv) DEPRECIATION/ AMORTISATION

a) Depreciation on Fixed Assets up to March 31,1987 has been provided at the then prevailing rates on Straight Line Method pursuant to Circular No. 1/86 dated May 21,1986 issued by the Department of Company Affairs, Government of India.

b) For Fixed Assets added from April 1,1987 onwards, the specified period has been recomputed according to the revised rates of depreciation as specified in schedule XIV to the Act as amended by Notification dated December 16, 1993 and the amount of depreciation has been calculated by allocating the unamortized value over the remaining part of the recomputed specified period.

c) For Fixed Assets added from April 1,1993 onwards, depreciation is provided on Straight Line Method at the rates, specified in Schedule XIV, as amended by Notification dated December 16,1993 of the Act except in the case of the following assets, where depreciation is charged over the estimated useful lives of such assets:

Assets Estimated useful life (Years)

Condensers (Plant & Machinery) 03

Heat Sealing Machine (Plant & Machinery) 01

Weighing Machine (Plant & Machinery) 01

Leasehold Land Over the primary period of the lease

Insurance Machinery Spares Over the remaining estimated useful life of the related parent assets

Computer Software 3 years from the date of their acquisition/ purchase

d) Depreciation on the Fixed Assets added/disposed off/ discarded during the year is provided on pro- rata basis with reference to the date of addition/ disposal/ discarding.

(v) INVESTMENTS

Current Investments are stated at lower of cost and fair value. Long term investments are stated at cost after deducting provisions made, if any, for other than temporary diminution in the value. Investments which are readily realisable and intended to be held for period less than one year are current investments. Other Investments are considered as long term investments. Long term debt securities are carried at amortized cost

(vi) IMPAIRMENT OF ASSETS

The carrying amounts of assets are reviewed at each Balance Sheet date if there is any indication of impairment based on internal/external factors. An asset is treated as impaired when the carrying cost of the assets exceeds its recoverable value. An impairment loss, if any, is charged to the Profit and Loss Account in the year in which an asset is identified as impaired. Reversal of impairment losses recognised in prior years is recorded when there is an indication that the impairment losses recognised for the assets no longer exist or have decreased.

(vii) INVENTORIES

a) Finished Goods (including goods in transit), work-in-progress are valued at cost or net realizable value whichever is lower.

b) Raw materials, components, stores and spares are valued at lower of weighted Average cost or net realisable value. 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. Obsolete, defective and unserviceable inventory is duly provided for. Scrapped items of stock are valued at net realisable value.

c) Cost comprises of all costs of purchases, costs of conversions and other costs incurred in bringing the inventory to their present location and conditions.

d) The value of closing stock of finished goods lying at depot is inclusive of freight charges and excise duty paid.

(viii) TRANSACTION OF FOREIGN CURRENCY ITEMS

Transactions in foreign currency are recorded at the rate of exchange prevailing on the date of transaction. Foreign currency monetary items (except forward contract transactions) are reported using closing rate of exchange at the end of the year. The resulting exchange gain/ loss is reflected in the Profit and Loss Account. Other non-monetary items, like fixed assets are carried in terms of historical cost using the exchange rate at the date of transaction. Exchange rate difference arising on account of conversion/ translation of liabilities for acquisition of Fixed Assets is recognised in the Profit & Loss account.

(ix) RETIREMENT AND OTHER EMPLOYEE BENEFITS

Employee benefits of short term nature are recognized as expense as and when accrued.

Defined Contribution Plan

The Company makes defined contribution to Provident Fund and Superannuation schemes which are recognized in the Profit and Loss Account on accrual basis.

Defined Benefit Plan

The Company's liabilities under Payment of Gratuity Act (funded), and long term compensated absences (non funded) are determined on the basis of actuarial valuation made at the end of each financial year using the projected unit credit method except for short term compensated absences which are provided for based on estimates. Actuarial gains and losses are recognised immediately in the statement of Profit and Loss Account as income or expense. Obligation is measured at the present value of estimated future cash flows using a discounted rate that is determined by reference to market yields at the Balance Sheet date on Government bonds where the currency and tenure of the Government bonds are consistent with the currency and estimated tenure of the defined benefit obligation.

(x) RECOGNITION OF INCOME & EXPENDITURE

Sales are recorded net of trade discounts, Sales Tax, VAT, and include excise duty. Revenue from sale of products is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer.

Income and Expenditure are recognised on accrual basis but Sales claims under escalation clause, insurance and other claims are accounted on acceptance basis.

(xi) BORROWING COST

Borrowing Costs, attributable to acquisition and construction of qualifying assets, are capitalised as a part of the cost of such asset up to the date when such assets are ready for its intended use. Other borrowing costs are charged to the Profit and Loss Account.

(xii) TAXATION

a) Tax expense comprises of current and deferred tax.

b) Provision for current tax is made on the basis of estimated taxable income for the current accounting year in accordance with the provisions of Income Tax Act, 1961.

c) The deferred tax for timing differences is accounted for, using the tax rates and laws that have been substantively enacted as of the Balance Sheet date. Deferred tax assets arising from timing differences are recognised to the extent there is reasonable certainty that these would be realised in future.

d) Deferred tax assets in case of unabsorbed losses and unabsorbed depreciation are recognised only if there is virtual certainty that such deferred tax asset can be realised against future taxable profits.

e) Credit for entitlement of Minimum Alternate Tax (MAT) is recognized only if the same can be utilized within statutorily permissible time.

(xiii) INTANGIBLE ASSETS

Intangible Assets are recognized by the Company only if it is probable that the future economic benefits that are attributable to the assets will flow to the enterprise and the cost of the same can be measured reliably.

Intangible Assets are amortized on a systematic basis over its useful life and the amortization for each period will be recognized as an expense.

(xiv) GOVERNMENT GRANTS/ CAPITAL SUBSIDY

a) Capital subsidy/ Government grants are recognised when there is reasonable assurance that the same will be received. Revenue grants are recognised in the Profit & Loss Account.

b) Capital subsidy/ Government grants relating to specific non depreciable fixed assets and in the nature of Promoter's Contribution are credited to capital reserve account.

c) Capital subsidy/ Government grants related to specific depreciable assets are credited to capital reserve account and are recognized as income in profit and loss statement on a systematic and rational basis over the useful life of assets.

(xv) CONTINGENT LIABILITIES AND PROVISIONS

Contingent Liabilities are possible but not probable obligations as on Balance Sheet date, based on the available evidence. Contingent Liabilities are not provided for in the accounts. These are disclosed by way of Notes to the Accounts.

Provisions are recognised when there is 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 are determined based on best estimate required to settle the obligation at the Balance Sheet date.

---

Mar 31, 2010

(i) Basis of Preparation

The financial statements have been prepared under the historical cost convention on an accrual basis in compliance with all material aspect of the applicable Accounting Standards notified by Companies (Accounting Standard) Rules, 2006 and the relevant provisions of the Companies Act, 1956 (the Act). The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year.

(ii) USE OF ESTIMATES

The preparation of financial statements is in conformity with Indian Generally Accepted Accounting Principles, which require the management to make estimates and assumptions to be made that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and differences between actual results and estimates are recognized in the periods in which the results are known / materialize.

(iii) FIXED ASSETS

Fixed Assets are stated at cost, less accumulated depreciation and impairment loss, if any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use and is net of cenvat credit

Machinery spares which can be used only in connection with an item of fixed assets and whose use is expected to be irregular(Insurance Spares) are Capitalized during the year as an addition to the parent assets and written off over the remaining estimated useful life of the parent assets.

Capital Work in Progress is stated at cost and other relevant overheads incurred during construction period.

(iv) DEPRECIATION/ AMORTISATION

a) Depreciation on Fixed Assets up to March 31,1987 has been provided at the then prevailing rates on Straight Line Method pursuant to Circular No. 1/86 dated May 21,1986 issued by the Department of Company Affairs, Government of India.

b) For Fixed Assets added from April 1,1987 onwards, the specified period has been recomputed according to the revised rates of depreciation as specified in schedule XIV to the Act as amended by Notification dated December 16,1993 and the amount of depreciation has been calculated by allocating the unamortized value over the remaining part of the recomputed specified period.

c) For Fixed Assets added from April 1,1993 onwards, depreciation is provided on Straight Line Method at the rates, specified in Schedule XIV, as amended by Notification dated December 16,1993 of the Act except in the case of the following assets, where depreciation is charged over the estimated useful lives of such assets:

d) Depreciation on the Fixed Assets added/disposed off/ discarded during the year is provided on pro- rata basis with reference to the date of addition/ disposal/ discarding.

(v) INVESTMENTS

Current Investments are stated at lower of cost and fair value. Long term investments are stated at cost after deducting provisions made, if any, for other than temporary diminution in the value. Investments which are readily realisable and intended to be held for period less than one year are current investments. Other Investments are considered as long term investments. Long term debt securities are carried at amortized cost

(vi) IMPAIRMENT OF ASSETS

The carrying amounts of assets are reviewed at each Balance Sheet date if there is any indication of impairment based on internal/external factors. An asset is treated as impaired when the carrying cost of the assets exceeds its recoverable value. An impairment loss, if any, is charged to the Profit and Loss Account in the year in which an asset is identified as impaired. Reversal of impairment losses recognised in prior years is recorded when there is an indication that the impairment losses recognised for the assets no longer exist or have decreased.

(vii) INVENTORIES

a) Finished Goods (including goods in transit), work-in-progress are valued at cost or net realizable value whichever is lower.

b) Raw materials, components, stores and spares are valued at lower of weighted Average cost or net realisable value. 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. Obsolete, defective and unserviceable inventory is duly provided for. Scrapped items of stock are valued at net realisable value.

c) Cost comprises of all costs of purchases, costs of conversions and other costs incurred in bringing the inventory to their present location and conditions.

d) The value of closing stock of finished goods lying at depot is exclusive of freight charges and inclusive of excise duty paid.

(viii) TRANSACTION OF FOREIGN CURRENCY ITEMS

Transactions in foreign currency are recorded at the rate of exchange prevailing on the date of transaction. Foreign currency monetary items (except forward contract transactions) are reported using closing rate of exchange at the end of the year. The resulting exchange gain/ loss is reflected in the Profit and Loss Account. Other non-monetary items, like fixed assets are carried in terms of historical cost using the exchange rate at the date of transaction. Exchange rate difference arising on account of conversion/ translation of liabilities for acquisition of Fixed Assets is recognised in the Profit & Loss account.

(ix) RETIREMENT AND OTHER EMPLOYEE BENEFITS

Employee benefits of short term nature are recognized as expense as and when accrued.

Defined Contribution Plan

The Company makes defined contribution to Provident Fund and Superannuation schemes which are recognized in the Profit and Loss Account on accrual basis.

Defined Benefit Plan

The Companys liabilities under Payment of Gratuity Act (funded), and long term compensated absences (non funded) are determined on the basis of actuarial valuation made at the end of each financial year using the projected unit credit method except for short term compensated absences which are provided for based on estimates. Actuarial gains and losses are recognised immediately in the statement of Profit and Loss Account as income or expense. Obligation is measured at the present value of estimated future cash flows using a discounted rate that is determined by reference to market yields at the Balance Sheet date on Government bonds where the currency and tenure of the Government bonds are consistent with the currency and estimated tenure of the defined benefit obligation.

(x) RECOGNITION OF INCOME & EXPENDITURE

Sales are recorded net of trade discounts, Sales Tax, VAT, and include excise duty. Revenue from sale of products is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer.

Income and Expenditure are recognised on accrual basis but Sales claims under escalation clause, insurance and other claims are accounted on acceptance basis.

(xi) BORROWING COST

Borrowing Costs, attributable to acquisition and construction of qualifying assets, are capitalised as a part of the cost of such asset up to the date when such assets are ready for its intended use. Other borrowing costs are charged to the Profit and Loss Account.

(xii) TAXATION

a) Tax expense comprises of current and deferred tax.

b) Provision for current tax is made on the basis of estimated taxable income for the current accounting year in accordance with the provisions of Income Tax Act, 1961.

c) The deferred tax for timing differences is accounted for, using the tax rates and laws that have been substantively enacted as of the Balance Sheet date. Deferred tax assets arising from timing differences are recognised to the extent there is reasonable certainty that these would be realised in future.

d) Deferred tax assets in case of unabsorbed losses and unabsorbed depreciation are recognised only if there is virtual certainty that such deferred tax asset can be realised against future taxable profits.

e) Credit for entitlement of Minimum Alternate Tax (MAT) is recognized only if the same can be utilized within statutorily permissible time.

(xiii) INTANGIBLE ASSETS

Intangible Assets are recognized by the Company only if it is probable that the future economic benefits that are attributable to the assets will flow to the enterprise and the cost of the same can be measured reliably.

Intangible Assets are amortized on a systematic basis over its useful life and the amortization for each period will be recognized as an expense.

(xiv) GOVERNMENT GRANTS/ CAPITAL SUBSIDY

a) Capital subsidy/ Government grants are recognised when there is reasonable assurance that the same will be received. Revenue grants are recognised in the Profit & Loss Account.

b) Capital subsidy/ Government grants relating to specific non depreciable fixed assets and in the nature of Promoters Contribution are credited to capital reserve account.

c) Capital subsidy/ Government grants related to specific depreciable assets are credited to capital reserve account and are recognized as income in profit and loss statement on a systematic and rational basis over the useful life of assets.

(xv) CONTINGENT LIABILITIES AND PROVISIONS

Contingent Liabilities are possible but not probable obligations as on Balance Sheet date, based on the available evidence. Contingent Liabilities are not provided for in the accounts. These are disclosed by way of Notes to the Accounts.

Provisions are recognised when there is 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 are determined based on best estimate required to settle the obligation at the Balance Sheet date.