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Accounting Policies of Kiri Industries Ltd. Company

Mar 31, 2023

STATEMENT ON SIGNIFICANT ACCOUNTING POLICIES

This note provides a list of the Significant Accounting
Policies adopted in the preparation of the Financial
Statements. These policies have been consistently
applied to all the years presented, unless otherwise
stated. The financial statements have been prepared
for the Company as a going concern on the basis of
relevant Ind AS that are effective at the Company''s
annual reporting date.

1.1 BASIS FOR PREPARATION OF ACCOUNTS

Statement of compliance with Ind AS
The Standalone Financial Statements have been
prepared in accordance with Indian Accounting
Standards (Ind AS) notified under Section 133 of the
Companies Act, 2013 read with Companies (Indian
Accounting Standards) Rules, 2015, as amended and
other relevant provisions of the Act.

Current versus Non-Current classification
All assets and liabilities have been classified as
Current or Non-Current as per the Company''s normal
operation cycle i.e. twelve months and other criteria
set out in the Schedule III of the Act.

Historical Cost Convention

The financial statements are prepared on accrual
basis of accounting under historical cost convention
in accordance with Generally Accepted Accounting
Principles in India and the relevant provisions
of the Companies Act, 2013 including Indian
Accounting Standards notified there under, except
for the following:

> Certain financial assets and liabilities measured at
fair value;

> Defined benefit plans - plan assets measured at
fair value

1.2 USE OF ESTIMATES AND JUDGEMENTS

The preparation of financial statements requires the
use of accounting estimates which by definition will
seldom equal the actual results. Management also
need to exercise judgment in applying the Company''s
accounting policies. The preparation of the financial
statements are in conformity with the Ind AS which
requires the management to make estimates,
judgments and assumptions that affect the application
of accounting policies, reported amounts of assets
and liabilities, reported revenues and expenses and
disclosure of contingent liabilities. Such estimates and
assumptions are based on management''s evaluation
of relevant facts and circumstances as on the date of
financial statements. The actual outcome may differ
from these estimates.

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

This note provides an overview of the areas that
involved a higher degree of judgment or complexity,
and of items which are more likely to be materially
adjusted due to estimates and assumptions turning
out to be different than those originally assessed.
Detailed information about each of these estimates
and judgements is included in relevant notes together
with information about the basis of calculation for
each affected line item in the Financial Statements.

Information about assumptions and estimation
uncertainties that have a significant risk of resulting
in a material adjustment within the next financial year
are included in the following notes:

Note 02 - Useful Lives of Property, Plant and Equipment

Note 09 - Expected Credit Losses on Financial Assets

Note 22 - Current / Deferred tax expense

Note 28 - Revenue Recognition

Note 21, 27 & 43 - Provisions and contingencies

Note 39 - Measurement of defined benefit obligations

1.3 REVENUE RECOGNITION

Revenue is recognised upon transfer of control of
promised products and services to customers in an
amount that reflects the consideration which the

Company expects to receive in exchange for such
products and services.

GST/ value added tax (VAT) is not received by
the Company on its own account. Rather, it is tax
collected on value added to the commodity by the
seller on behalf of the government. Accordingly, it is
excluded from revenue.

Sale of Goods

Revenue from the sale of goods is recognised at the
point in time when control is transferred to the buyer
which is usually on dispatch / delivery of goods, based
on contracts with the customers.

Revenue is measured based on the transaction
price, which is the consideration, adjusted for
volume discounts, price concessions, incentives, and
returns, if any, as specified in the contracts with the
customers. In determining the transaction price for
the sale of goods, the company considers the effects
of variable consideration, the existence of significant
financing components, non-cash consideration, and
consideration payable to the customer (if any).

Export Benefits

Incomes in respect of Duty Drawback in respect
of exports made during the year are accounted
on accrual basis.

Remission of Duties and Taxes on Export Products
(RoDTEP) income is recognised on accrual basis when
considering the related expenses to the same profit
or losses on transfer of licenses are accounted in
year of the sales.

Interest Income

Interest income on financial asset is recognised using
the effective interest rate (EIR) method.

Dividend

Dividend income is recognised when the right to
receive the same is established, which is generally
when shareholders approve the dividend.

Other Income

Other income is recognised when no significant
uncertainty as to its determination or realisation exists.

Scrap Sales

Income from Sales of Scrap is recognized at the point
in time when control of the assets is transferred
to the customer.

Insurance Claims

Insurance claims are accounted for on the basis of claims
admitted/expected to be admitted and to the extent
that there is no uncertainty in receiving the claims.

Contract Balances (Trade Receivables)

A receivable represents the company''s right to
an amount of consideration that is unconditional
(i.e., only the passage of time is required before
payment of the consideration is due). Refer SAP
on Financial instruments - initial recognition and
subsequent measurement.

Contract Liabilities

A contract liability is the obligation to transfer goods
or services to a customer for which the company has
received consideration (or an amount of consideration
is due) from the customer. If a customer pays
consideration before the company transfers goods
or services to the customer, a contract liability is
recognised when the payment is made or the payment
is due (whichever is earlier). recognised as revenue
when the company performs under the contract.

1.4 FOREIGN CURRENCY TRANSACTIONS

Functional and Presentation Currency
Items included in the financial statements are
measured using the currency of the primary economic
environment in which the entity operates (''the
functional currency''). The financial statements are
presented in Indian rupee (''), which is the Company''s
functional and presentation currency.

Transactions and Balances

On initial recognition, all foreign currency transactions
are recorded by applying to the foreign currency
amount the exchange rate between the functional
currency and the foreign currency at the date of the
transaction. Gains/Losses arising out of fluctuation in
foreign exchange rate between the transaction date
and settlement date are recognised in the Statement
of Profit and Loss.

All monetary assets and liabilities in foreign currencies
are restated at the year end at the exchange rate
prevailing at the year end and the exchange differences
are recognised in the Statement of Profit and Loss.

Non-monetary items that are measured in terms of
historical cost in a foreign currency are translated
using the exchange rates at the dates of the
initial transactions.

1.5 PROPERTY, PLANT AND EQUIPMENTS

Tangible Assets

Freehold Land is carried at historical cost. All other
items of Property, Plant and Equipment are stated
at historical cost less accumulated depreciation.
Historical cost includes expenditure that is directly
attributable to the acquisition of the items. Cost may
also include transfers from equity of any gains or losses

on qualifying cash flow hedges of foreign currency
purchases of property, plant and equipment.

The cost of self-constructed assets includes cost of
materials plus any other directly attributable costs
of bringing the assets to working condition for
its intended use.

Subsequent costs are included in the asset''s
carrying amount or recognised as a separate asset,
as appropriate, only when it is probable that future
economic benefits associated with the item will flow
to the Company and the cost of the item can be
measured reliably.

An item of Property, Plant or Equipment is
derecognised upon disposal or when no future
economic benefits are expected to arise from the
continued use of the asset.

Items of Property, Plant or Equipment that are
retired from active use and are held for disposal are
stated at the lower of their net book value and net
realizable value and are presented separately in the
Financial Statements. Any expected loss is recognized
immediately in the Statement of Profit and Loss.

The gain or loss arising on the disposal or retirement
of an asset is determined as the difference between
sales proceeds and the carrying amount of the asset
and is recognized in Statement of Profit and Loss for
the relevant financial year.

Capital Work in Progress included in PPE is stated
as Cost and includes expenditure directly related
to construction and incidental thereto. The same
is transferred or allocated to respective item
Property, Plant, and Equipment on commissioning
of the project.

1.6 INTANGIBLE ASSETS

Intangible Assets acquired separately
Intangible assets with finite useful lives that are
acquired separately are carried at cost less accumulated
amortisation and accumulated impairment losses.
Amortisation is recognised on a straight-line basis over
their estimated useful lives. The estimated useful life
and amortisation method are reviewed at the end of
each reporting period, with the effect of any changes
in estimate being accounted for on a prospective
basis. Intangible assets with indefinite useful lives
that are acquired separately are carried at cost less
accumulated impairment Losses.

Internally - generated intangible assets - Research and
Development expenditure

Assessment of whether an internally generated
Intangible Asset meets the criteria for recognition,

the expenditure on generation of the asset is
classified into research phase and development
phase. Expenses incurred during research phase are
recognized immediately in the Statement of Profit and
Loss. Expenditure during the development phase is
recognized as an Intangible Asset under development
on fulfilment of following conditions:¬
> The technical feasibility of completing the
Intangible Asset so that it will be available
for use or sale;

> The intention to complete the Intangible Asset
and use or sell it;

> The ability to use or sell the Intangible Asset;

> The Intangible Asset will generate probable
future economic benefits;

> The availability of adequate technical, financial
and other resources to complete the development
and to use or sell the Intangible Asset; and

> The ability to measure reliably the expenditure
attributable to the Intangible Asset during
its development.

The amount initially recognised for internally-
generated Intangible Assets is the sum of the
expenditure incurred from the date when the
intangible asset first meets the recognition criteria
listed above. Where no internally-generated intangible
asset can be recognised, development expenditure is
recognised in the Statement of Profit and Loss in the
period in which it is incurred.

Derecognition of Intangible Assets
An Intangible Asset is derecognised on disposal, or
when no future economic benefits are expected from
use or disposal.

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

1.7 NON- CURRENT ASSET HELD FOR SALE AND
DISCONTINUED OPERATIONS

The Company classifies assets and operations as held
for sale / distribution to owners or as discontinued
operations if their carrying amounts will be recovered
principally through a sale / distribution rather than
through continuing use. Classification as a discontinued
operations occur upon disposal or when the operation
meets the below criteria, whichever is earlier.

Non Current Assets are classified as held for sale only
when both the conditions are satisfied -

> The sale is highly probable, and

> The asset or disposal group is available for
immediate sale in its present condition subject
only to terms that are usual and customary for
sale of such assets.

Non-current assets which are subject to depreciation
are not depreciated or amortized once those classified
as held for sale.

A discontinued operation is a component of the
Company''s business, the operations of which can
be clearly distinguished from those of the rest of the
Company and i) is part of a single coordinated plan
to dispose of a separate major line of business or
geographical area of operations; or ii) is a subsidiary
acquired exclusively with a view to resale.

Non-current assets held for sale / distribution to
owners and discontinued operations are measured at
the lower of their carrying amount and the fair value
less costs to sell / distribute. Assets and liabilities
classified as held for sale / distribution are presented
separately in the balance sheet. The results of
discontinued operations are excluded from the overall
results of the Company and are presented separately in
the statement of profit and loss. Also, the comparative
statement of profit and loss is re-presented as if the
operations had been discontinued from the start of
the comparative period.

1.8 IMPAIRMENT OF INVESTMENT

The Company reviews its carrying value of investments
carried at amortised cost annually, or more frequently
when there is an indication for impairment. If the
recoverable amount is less than its carrying amount,
the impairment loss is accounted for.

1.9 IMPAIRMENT OF NON- FINANCIAL ASSETS

The Company assesses, at each reporting date,
whether there is an indication that an asset may be
impaired. If any indication exists, or when annual
impairment testing for an asset is required, the
Company estimates the asset''s recoverable amount.
An asset''s recoverable amount is the higher of an
asset''s or Cash-Generating Unit''s (CGU) fair value less
costs of disposal and its value in use. Recoverable
amount is determined for an individual asset, unless
the asset does not generate cash inflows that are
largely independent of those from other assets or
groups of assets. When the carrying amount of an
asset or CGU exceeds its recoverable amount, the
asset is considered impaired and is written down to
its recoverable amount.

1.10 DEPRECIATION AND AMORTISATION

Depreciation is calculated to systematically allocate
the cost of Property, Plant and Equipment and
Intangible Asset net of the estimated residual
values over the estimated useful life. Depreciation is
computed using Straight Line Method (SLM) over the
useful lives of the assets as specified in Schedule II to
the Companies Act, 2013.

The residual values are not more than 5% of the
original cost of the item of Property, Plant and
Equipment. The asset''s residual values and useful lives
are reviewed, and adjusted if appropriate, at the end
of each reporting period.

1.11 FINANCIAL INSTRUMENTS

Fair value measurement of Financial Instruments
The Company''s accounting policies and disclosures
require the measurement of fair values for certain
financial and non-financial assets and liabilities based
on their classification.

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.

In estimating the fair value of an asset or 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.

Fair values are categorized into different levels in a
fair value hierarchy based on the inputs used in the
valuation techniques as follows:

> Level 1: quoted prices (unadjusted) in active
markets for identical assets or liabilities.

> Level 2: inputs other than quoted prices included
in 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 asset or liability that
are not based on observable market data
(unobservable inputs).

When measuring the fair value of an asset or a liability,
the Company uses observable market data as far as
possible. If the inputs used to measure the fair value
of an asset or a liability fall into different levels of the
fair value hierarchy, then the fair value measurement
is categorized in its entirety in the same level of the
fair value hierarchy as the lowest level input that is
significant to the entire measurement.

The Company recognises transfers between levels of
the fair value hierarchy at the end of the reporting
period during which the change has occurred.

For the purpose of fair value disclosures, the Company
has determined classes of assets and liabilities on the
basis of the nature, characteristics and risks of the
asset or liability and the level of the fair value hierarchy
as explained above.

Financial Instruments

A financial instrument is any contract that gives rise to
a financial asset of one entity and a financial liability or
equity instrument of another entity.

Financial Asset

Initial recognition and measurement
All financial assets are recognised in balance sheet
when, and only when, the entity becomes party to the
contractual provisions of the instrument and initially
measured at fair value plus, in the case of financial
assets not recorded at fair value through profit or
loss, transaction costs that are attributable to the
acquisition of the financial asset or liability are added
to or deducted from the fair value. Purchases or sales
of financial assets that require delivery of assets within
a time frame established by regulation or convention

in the market place (regular way trades) are recognised
on the trade date, i.e., the date that the Company
commits to purchase or sell the asset.

Subsequent Measurement

For purposes of subsequent measurement, financial
assets are classified into four categories:

> Debt instruments at amortised cost

> Debt instruments at fair value through other
comprehensive income (FVTOCI)

> Debt instruments and equity instruments at fair
value through profit or loss (FVTPL)

> Equity instruments measured at FVTOCI

The measurement of financial assets depends on their
classification, as described below:

Debt instruments at amortised cost
A ''debt instrument'' is measured at the amortised costif
both the following conditions are met:

> The asset is held within a business model
whose objective is to hold assets for collecting
contractual cash flows, and

> Contractual terms of the asset give rise on
specified dates to cash flows that are solely
payments of principal and interest (SPPI) on the
principal amount outstanding.

After initial measurement, financial assets are
subsequently measured at amortised cost using the
Effective Interest Rate (EIR) method. Amortised cost
is calculated by taking into account any discount or
premium on acquisition and fees or costs that are
an integral part of the EIR. The EIR amortisation is
included in finance income in the profit or loss. The
losses arising from impairment are recognised in the
Statement of Profit and Loss. This category covers
Trade Receivables, Loans, Cash & Bank Balances and
Other Receivables.

Debt instruments at fair value through other
comprehensive income (FVTOCI)

A ''debt instrument'' is classified as at the FVTOCI if both
of the following criteria are met:

> The objective of the business model is achieved
both by collecting contractual cash flows and
selling the financial assets, and

> Contractual terms of the asset give rise on
specified dates to cash flows that are solely
payments of principal and interest (SPPI) on the
principal amount outstanding.

Debt instruments included within the FVTOCI
category are measured initially as well as at each
reporting date at fair value. Fair value movements
are recognised in the other comprehensive income
(OCI). On derecognition of the asset, cumulative gain
or loss previously recognised in OCI is reclassified
to the Statement of Profit and Loss. Interest earned
while holding FVTOCI debt instrument is reported as
interest income using the EIR method.

Debt instruments and equity instruments at fair value
through profit or loss (FVTPL)

FVTPL is a residual category for debt instruments. Any
debt instrument, which does not meet the criteria for
categorization as at amortized cost or as FVTOCI, is
classified as at FVTPL.

Debt and Equity instruments included within the
FVTPL category are measured at fair value with all
changes recognized in the Statement of Profit and Loss.

Equity instruments included within the FVTPL
category are measured at fair value with all changes
recognized in the Statement of Profit and Loss.

Equity instruments measured at FVTOCI
All equity investments in the 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 election on an instrument-by-instrument
basis. The classification is made on initial recognition
and is irrevocable.

If the Company decides to classify an equity
instrument as at FVTOCI, then all fair value changes on
the instrument, excluding dividends, are recognized
in the OCI. There is no recycling of the amounts from
OCI to Statement of Profit and Loss, even on sale of
investment. However, the Company may transfer the
cumulative gain or loss within equity.

Derecognition of Financial Assets
The Company de-recognises a financial asset only
when the contractual rights to the cash flows
from the asset expires or it transfers the financial
asset and substantially all the risks and rewards of
ownership of the asset.

When the Company has transferred its rights to
receive cash flows from an asset or has entered into
a pass-through arrangement, it evaluates if and to
what extent it has retained the risks and rewards
of ownership. When it has neither transferred nor
retained substantially all of the risks and rewards of the
asset, nor transferred control of the asset, the Company

continues to recognise the transferred asset to the
extent of the Company''s continuing involvement. In
that case, the Company also recognises an associated
liability. The transferred asset and the associated
liability are measured on a basis that reflects the rights
and obligations that the Company has retained.

Continuing involvement that takes the form of a
guarantee over the transferred asset is measured at
the lower of the original carrying amount of the asset
and the maximum amount of consideration that the
Company could be required to repay.

Impairment Financial Assets (other than at fair value)

In accordance with Ind AS 109, the Company applies
expected credit loss (ECL) model or measurement
and recognition of impairment loss for the following
financial assets and credit risk exposures:

> Financial assets that are debt instruments and are
measured at amortised cost e.g., loans, deposits
and bank balance

> Trade Receivables that result from transactions
that are within the scope of Ind AS 115.

The Company follows ''simplified approach'' for
recognition of impairment loss allowance on trade
receivables. The application of simplified approach
does not require the Company to track changes in
credit risk. It recognises impairment loss allowance
based on lifetime ECLs at each reporting date, right
from its initial recognition.

As a practical expedient, the company uses a provision
matrix to determine impairment loss allowance on
portfolio of its receivables. The provision matrix is
based on its historically observed default rates over the
expected life of the trade receivables and is adjusted
for forward looking estimates. At every reporting date,
the historical observed default rates are updated and
changes in the forward looking estimates are analysed.

For recognition of impairment loss on other financial
assets and risk exposure, the Company determines
whether there has been a significant increase in the
credit risk since initial recognition. If credit risk has
not increased significantly, 12 quarter ECL is used to
provide for impairment loss. However, if credit risk
has increased significantly, lifetime ECL is used. If, in
a subsequent period, credit quality of the instrument
improves such that there is no longer a significant
increase in credit risk since initial recognition, then
the entity reverts to recognising impairment loss
allowance based on 12 quarter ECL. Lifetime ECL are
the expected credit losses resulting from all possible
default events over the expected life of a financial
instrument. The 12 quarter ECL is a portion of the

lifetime ECL which results from default events that are
possible within 12 months after the reporting date.
ECL is the difference between all contractual cash
flows that are due to the Company in accordance with
the contract and all the cash flows that the Company
expects to receive. When estimating the cash flows,
the Company is required to consider:

• All contractual terms of the financial assets
(including prepayment and extension) over the
expected life of the assets.

• Cash flows from the sale of collateral held or other
credit enhancements that are integral to the
contractual terms.

Financial Liabilities

Initial Recognition and Measurement

Financial liabilities are classified, at initial recognition,

as financial liabilities at fair value through profit or loss.

All financial liabilities are recognized initially at fair
value and, in the case of loans and borrowings and
payables, net of directly attributable transaction costs.

The Company''s financial liabilities include trade and
other payables, loans and borrowings.

Subsequent Measurement

The measurement of financial liabilities depends on
their classification, as described below:

Financial liabilities at fair value through profit or loss
include financial liabilities held for trading and financial
liabilities designated upon initial recognition as at fair
value through profit or loss. Financial liabilities are
classified as held for trading if they are incurred for the
purpose of repurchasing in the near term.

Gains or losses on liabilities held for trading are
recognised in the profit or loss.

Financial Liability at Amortised cost
After initial recognition, financial liabilities are
subsequently measured at amortised cost using
the EIR method. Gains and losses are recognized in
Statement of Profit and Loss when the liabilities are
derecognized as well as through the EIR amortisation
process. Amortised cost is calculated by taking into
account any discount or premium on acquisition and
fees or costs that are an integral part of the EIR. The
EIR amortisation is included as finance costs in the
Statement of Profit and Loss.

Financial Liabilities at Fair Value Through Profit
or Loss (FVTPL)

Financial liabilities at fair value through profit or
loss include financial liabilities held for trading and

financial liabilities designated upon initial recognition
as such. Subsequently, any changes in fair value are
recognised in the Statement of Profit and Loss.

Derecognition of Financial Liability
A financial liability is de-recognised when the
obligation under the liability is discharged or cancelled
or expires. When an existing financial liability is
replaced by another from the same lender on
substantially different terms, or the terms of an existing
liability are substantially modified, such an exchange
or modification is treated as the derecognition of
the original liability and the recognition of a new
liability. The difference in the respective carrying
amounts is recognised in the Statement of Profit
and Loss.

Offsetting of Financial Instruments
Financial assets and financial liabilities are offset and
the net amount is reported in the balance sheet if
there is a currently enforceable legal right to offset
the recognised amounts and there is an intention to
settle on a net basis, to realise the assets and settle the
liabilities simultaneously.

Investments in Subsidiaries

A Subsidiary is an entity that is controlled
by the Company.

The Company accounts for each category of
investments in subsidiaries at cost in accordance with
Ind AS 27- Separate Financial Statements.

1.12 INVENTORIES

> Inventories are stated at the lower of cost and net
realizable value.

> Cost of Raw Material is determined on FIFO basis.

> Stores and Consumables are valued at cost or net
realizable value whichever is lower.

> Finished goods are valued at cost or net realizable
value whichever is lower. Cost comprises direct
materials and where applicable, direct labour
costs, those overheads that have been incurred
in bringing the inventories to their present
location and condition.

> Work in Progress is valued at cost or net realizable
value whichever is less. Cost comprises direct
materials and appropriate portion of direct labour
costs and manufacturing overheads.

> Semi Finished Goods is valued at cost or net
realizable value whichever is less. Cost comprises

direct materials and appropriate portion of direct
labour costs and manufacturing overheads.

> Net realizable value represents the estimated
selling price less all estimated costs of completion
and costs to be incurred in marketing, selling
and distribution.

1.13 RECOVERABILITY OF TRADE RECEIVABLE

Judgements are required in assessing the recoverability
of overdue trade receivables and determining whether
a provision against those receivables is required.
Factors considered include the credit rating of the
counterparty, the amount and timing of anticipated
future payments and any possible actions that can be
taken to mitigate the risk of non-payment.

1.14 LITIGATION

From time to time, the Company is subject to legal
proceedings, the ultimate outcome of each being
always subject to many uncertainties inherent in
litigation. A provision for litigation is made when it is
considered probable that a payment will be made and
the amount of the loss can be reasonably estimated.
Significant judgement is made when evaluating,
among other factors, the probability of unfavourable
outcome and the ability to make a reasonable estimate
of the amount of potential loss. Litigation provisions
are reviewed at each accounting period and revisions
made for the changes in facts and circumstances.

1.15 BORROWING COSTS

Borrowing costs consist of interest, ancillary costs
and other costs in connection with the borrowing of
funds and exchange differences arising from foreign
currency borrowings to the extent they are regarded
as an adjustment to interest costs.

Borrowing costs attributable to acquisition and/
or construction of qualifying assets are capitalized
as a part of the cost of such asset, up to the date
such assets are ready for their intended use. Other
borrowing costs are charged to the Statement of
Profit and Loss.

1.16 EMPLOYEE BENEFITS

Short term employee benefit obligations
Liabilities for wages and salaries, including
nonmonetary benefits that are expected to be settled
wholly within 12 months after the end of the year in
which the employees render the related service are
recognized in respect of employees'' services up to
the end of the year and are measured at the amounts
expected to be paid when the liabilities are settled.
The liabilities are presented as current employee
benefit obligations in the balance sheet.

Other long term employee benefit obligations
Defined contribution plan

Provident Fund: Contribution towards provident
fund is made to the regulatory authorities, where the
Company has no further obligations. Such benefits
are classified as Defined Contribution Schemes as
the Company does not carry any further obligations,
apart from the contributions made on a monthly basis
which are charged to the Statement of Profit and Loss.

Employee''s State Insurance Scheme: Contribution
towards employees'' state insurance scheme is made
to the regulatory authorities, where the Company has
no further obligations. Such benefits are classified
as Defined Contribution Schemes as the Company
does not carry any further obligations, apart from
the contributions made on a monthly basis which are
charged to the Statement of Profit and Loss.

Defined benefit plans
Gratuity Obligations

The liability or asset recognised in the balance sheet
in respect of defined benefit gratuity plans is present
value of the defined benefit obligation at the end of
the reporting period less the fair value of plan assets.
The defined benefit obligation is calculated annually
by actuaries using the projected unit credit method.

The present value of the defined benefit obligations
is determined by discounting the estimated future
cash outflows by reference to market yields at the
end of the reporting period on government bonds
that have terms approximating to the terms of the
related obligation.

The net interest cost is calculated by applying the
discount rate to the net balance of the defined benefit
obligation and the fair value of plan assets. This cost
is included in employee benefit expenses in the
statement of profit and loss.

Remeasurement gains and losses arising from
experience adjustments and changes in actuarial
assumptions are recognised in the period in which they
occur, directly in other comprehensive income. They
are included in retained earnings in the statement of
changes in equity and in the balance sheet.

Changes in present value of the defined benefit
obligation resulting from plan amendment or
curtailments are recognised immediately in profit or
loss as past service cost.

1.17 GOODS AND SERVICE TAX

GST Credit of Raw Materials and Other Consumables
is accounted at the time of purchase and the same

is being adjusted to the cost of Raw Materials and
Other Consumables.

1.18 ACCOUNTING FOR TAXES ON INCOME

Income Taxes

The income tax expense or credit for the period is the
tax payable on the current period''s taxable income
based on the applicable income tax rate for each
jurisdiction adjusted by changes in Deferred Tax Assets
and Liabilities attributable to temporary differences
and to unused tax losses.

The current income tax charge is calculated on the basis
of the tax laws enacted or substantively enacted at the
end of the reporting period i.e. as per the provisions
of the Income Tax Act, 1961, as amended from time to
time. Management periodically evaluates positions
taken in tax returns with respect to situations in which
applicable tax regulation is subject to interpretation. It
establishes provisions where appropriate on the basis
of amounts expected to be paid to the tax authorities.

Current income tax assets and liabilities are measured
at the amount expected to be recovered from or
paid to the taxation authorities, based on the rates
and tax laws enacted or substantively enacted, at the
reporting date in the country where the Company
operates and generates taxable income. Current tax
items are recognised in correlation to the underlying
transaction either in OCI or directly in equity.

Deferred Taxes

Deferred tax is provided in full on temporary difference
arising between the tax bases of the assets and liabilities
and their carrying amounts in standalone financial
statements. Deferred tax amounts of income taxes
recoverable in future periods in respect of deductible
temporary differences, the carry forward of unused
tax losses and the carry forward of unused tax credits.

Deferred income tax is determined using tax rates (and
laws) that have been enacted or substantially enacted
by the end of the reporting period and are expected
to apply when the related deferred income tax asset is
realised or the deferred income tax liability is settled.

Deferred Tax Assets are recognised for all deductible
temporary differences and unused tax losses only if it is
probable that future taxable amounts will be available
to utilise those temporary differences and losses.

Deferred Tax Assets and Liabilities are offset when
there is a legally enforceable right to offset current
tax assets and liabilities and when the deferred tax
balances relate to the same taxation authority. Current
tax assets and tax liabilities are offset where the
Company has a legally enforceable right to offset and

intends either to settle on a net basis, or to realise the
asset and settle the liability simultaneously.

Current and Deferred Tax is recognised in the
Statement of Profit and Loss, except to the extent that
it relates to items recognised in other comprehensive
income or directly in equity. In this case, the tax is also
recognised in other comprehensive income or directly
in equity, respectively.

The carrying amount of Deferred Tax Assets is reviewed
at each reporting date and reduced to the extent that
it is no longer probable that sufficient taxable profit
will be available to allow all or part of the Deferred
Tax Asset to be utilised. Unrecognised Deferred Tax
Assets are re-assessed at each reporting date and are
recognised to the extent that it has become probable
that future taxable profits will allow the deferred tax
asset to be recovered.


Mar 31, 2018

BACKGROUND

Kiri Industries Limited (the Company) is a public company limited by shares domiciled in India, incorporated under the provisions of Companies Act, 1956. Its shares are listed on National Stock Exchange of India Limited and BSE Limited. Its registered office is situated at 7th Floor, Hasubhai Chambers, Nr. Town Hall, Ellisbridge, Ahmedabad-380 006 Gujarat India. The Company is engaged in manufacturing and selling of Dyes, Dyes Intermediates and Basic Chemicals.

1. STATEMENT ON SIGNIFICANT ACCOUNTING POLICIES

This note provides a list of the Significant Accounting Policies adopted in the preparation of the Financial Statements. These policies have been consistently applied to all the years presented, unless otherwise stated.

1.1 BASIS FOR PREPARATION OF ACCOUNTS

a) Statement of compliance with Ind AS

The Standalone Financial Statements comply in all material aspects with Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (the Act) [Companies (Indian Accounting Standards) Rules, 2015] and other relevant provisions of the Act.

The Financial statements for the year ended 31st March 2017 were prepared in accordance with the accounting standards notified under Companies (Accounting Standard) Rules, 2006 (as amended) and other relevant provisions of the Act.

These Financial Statements for the year ended 31st March 2018 are the first financial statements of the Company under Ind AS. The date of transition to Ind AS is 1st April, 2016. Refer Note 44 for an explanation of how the transition from Indian GAAP (IGAAP) to Ind AS has affected the Company''s financial position, financial performance and Cash Flows.

b) Current versus Non-Current classification

All assets and liabilities have been classified as Current or Non-Current as per the Company''s normal operation cycle i.e. twelve months and other criteria set out in the Schedule III of the Act.

c) Historical Cost Convention

The financial statements are prepared on accrual basis of accounting under historical cost convention in accordance with Generally Accepted Accounting Principles in India and the relevant provisions of the Companies Act, 2013 including Indian Accounting Standards notified there under, except for the following:

- Certain financial assets and liabilities measured at fair value;

- Defined benefit plans - plan assets measured at fair value

1.2 USE OF ESTIMATES

The presentation of the financial statements are in conformity with the Ind AS which requires the management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses and disclosure of contingent liabilities. Such estimates and assumptions are based on management''s evaluation of relevant facts and circumstances as on the date of financial statements. The actual outcome may differ from these estimates.

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

This note provides an overview of the areas that involved a higher degree of judgment or complexity, and of items which are more likely to be materially adjusted due to estimates and assumptions turning out to be different than those originally assessed. Detailed information about each of these estimates and judgements is included in relevant notes together with information about the basis of calculation for each affected line item in the Financial Statements.

Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment within the next financial year are included in the following notes:

Note 20 - Current/deferred tax expense

Note 35 - Measurement of defined benefit obligations

Note 34 - Provisions and contingencies

1.3 REVENUE RECOGNITION

i) Sale of Goods

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer and no significant uncertainty exists regarding the amount of the consideration that will be derived from the sale of goods. Revenue from the sale of goods is measured at the fair value of the consideration received or receivable, net of returns and allowances, related discounts and volume rebates. It includes excise duty and subsidy and excludes Value Added Tax / Sales Tax and Goods and Service Tax.

ii) Export Benefits

- Incomes in respect of Duty Drawback in respect of exports made during the year are accounted on accrual basis.

- Merchandise Exports from India Scheme (MEIS) income is recognised on accrual basis when considering the related expenses to the same profit or losses on transfer of licenses are accounted in year of the sales.

iii) Dividend

Dividend income is recognised when the right to receive the same is established.

iv) Insurance Claims

Insurance claims are accounted for on the basis of claims admitted/expected to be admitted and to the extent that there is no uncertainty in receiving the claims.

1.4 FOREIGN CURRENCY TRANSACTIONS Functional and Presentation Currency

The financial statements are presented in Indian Rupee (INR), which is company''s functional and presentation currency.

Transactions and Balances

(i) Transactions in foreign currencies are recorded in Indian Rupees using the rates of exchange prevailing on the dates of the transactions. At each balance sheet date, recorded monetary balance are reported in Indian Rupees at the rates of exchange prevailing at the balance sheet date. All realised and unrealised exchange adjustment gains and losses are dealt with in the Statement of Profit and Loss.

(ii) In order to hedge exposure to foreign exchange risks arising from Export or Import foreign currency, bank borrowings and trade receivables, the Company may enters into forward contracts. Any profit or loss arising on the cancellation or renewal of a forward exchange contract is recognised as income or expenses for the year.

(iii) Foreign exchange differences regarded as an adjustment to borrowing costs are presented in the statement of profit and loss, within finance costs. All other foreign exchange gains and losses are presented in the statement of profit and loss on a net basis within other gains/ ( losses ).

(iv) Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction.

1.5 PROPERTY, PLANT AND EQUIPMENTS TANGIBLE ASSETS

(i) Freehold Land is carried at historical cost. All other items of Property, Plant and Equipment are stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Cost may also include transfers from equity of any gains or losses on qualifying cash flow hedges of foreign currency purchases of property, plant and equipment.

(ii) The cost of self-constructed assets includes cost of materials plus any other directly attributable costs of bringing the assets to working condition for its intended use.

(iii) Subsequent costs are included in the asset''s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably.

(iv) An item of Property, Plant or Equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset.

(v) Items of fixed assets that are retired from active use and are held for disposal are stated at the lower of their net book value and net realizable value and are presented separately in the Financial Statements. Any expected loss is recognized immediately in the Statement of Profit and Loss.

(vi) The gain or loss arising on the disposal or retirement of an asset is determined as the difference between sales proceeds and the carrying amount of the asset and is recognized in Statement of Profit and Loss for the relevant financial year.

(vii) Capital Work in Progress includes expenditure directly related to construction and incidental thereto. The same is transferred or allocated to respective item Property, Plant, and Equipment on commissioning of the project.

Transition to Ind AS

On transition to Ind AS, the Company has elected to continue with the carrying value of all of its Property, Plant and Equipment recognised as at 1 April 2016 measured as per the IGAAP and use that carrying value as the deemed cost of the property, plant and equipment. Hence regarded thereafter as historical cost.

1.6 INTANGIBLE ASSETS

Intangible Assets acquired separately

Intangible assets with finite useful lives that are acquired separately are carried at cost less accumulated amortisation and accumulated impairment losses. Amortisation is recognised on a straight-line basis over their estimated useful lives. The estimated useful life and amortisation method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis. Intangible assets with indefinite useful lives that are acquired separately are carried at cost less accumulated impairment Losses. Internally-generated intangible assets - Research and Development expenditure

Assessment of whether an internally generated Intangible Asset meets the criteria for recognition, the expenditure on generation of the asset is classified into research phase and development phase. Expenses incurred during research phase are recognized immediately in the Statement of Profit and Loss. Expenditure

during the development phase is recognized as an Intangible Asset under development on fulfilment of following conditions:-

- The technical feasibility of completing the Intangible Asset so that it will be available for use or sale;

- The intention to complete the Intangible Asset and use or sell it;

- The ability to use or sell the Intangible Asset;

- The Intangible Asset will generate probable future economic benefits;

- The availability of adequate technical, financial and other resources to complete the development and to use or sell the Intangible Asset; and

- The ability to measure reliably the expenditure attributable to the Intangible Asset during its development. The amount initially recognised for internally-generated Intangible Assets is the sum of the expenditure incurred from the date when the intangible asset first meets the recognition criteria listed above. Where no internally-generated intangible asset can be recognised, development expenditure is recognised in the Statement of Profit and Loss in the period in which it is incurred.

Derecognition of Intangible Assets

An Intangible Asset is derecognised on disposal, or when no future economic benefits are expected from use or disposal.

Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, are recognised in the Statement of Profit and Loss when the asset is de-recognised Transition to Ind AS

On transition to Ind AS, the Company has elected to continue with the carrying value of all its intangible assets recognised as at 1st April 2016 measured as per the IGAAP and use that carrying value as the deemed cost of the intangible assets

1.7 IMPAIRMENT OF INVESTMENT

The Company reviews its carrying value of investments carried at amortised cost annually, or more frequently when there is an indication for impairment. If the recoverable amount is less than its carrying amount, the impairment loss is accounted for.

1.8 IMPAIRMENT OF NON- FINANCIAL ASSETS

The Company assesses, at each reporting date, whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset''s recoverable amount. An asset''s recoverable amount is the higher of an asset''s or Cash-Generating Unit''s (CGU) fair value less costs of disposal and its value in use. Recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

1.9 DEPRECIATION AND AMORTISATION

Depreciation is calculated to systematically allocate the cost of Property, Plant and Equipment and Intangible Asset net of the estimated residual values over the estimated useful life. Freehold land is not depreciated. Depreciation is computed using Straight Line Method (SLM) over the useful lives of the assets as specified in Schedule II to the Companies Act, 2013.

The residual values are not more than 5% of the original cost of the item of Property, Plant and Equipment. The asset''s residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.

Depreciation on items of Property, Plant and Equipment acquired / disposed off during the year is provided on pro-rata basis with reference to the date of addition / disposal.

Depreciation is not provided on Freehold Land. Leasehold land is amortized over the available balance lease period.

1.10 NON-DERIVATIVE FINANCIAL INSTRUMENTS

Financial Assets and Liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument. Financial assets and liabilities are initially measured at 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 valued at fair value through profit or loss) are added to or deducted from the fair value measured on initial recognition of Financial Asset or Financial Liability.

Cash and Cash Equivalents

The Company considers all highly liquid financial instruments, which are readily convertible into known amounts of cash that are subject to an insignificant risk of change in value and having original maturities of three months or less from the date of purchase, to be cash equivalents. Cash and Cash Equivalents consist of balances with banks which are unrestricted for withdrawal and usage.

Financial Assets at Amortised cost

Financial Assets are subsequently measured at amortised cost if these financial assets are held within a business whose objective is to hold these 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.

Financial Assets at Fair Value Through Other Comprehensive Income (FVTOCI)

Financial assets are measured at fair value through other comprehensive income if these financial assets are held within a business whose objective is achieved by both collecting contractual cash flows that give rise on specified dates to solely payments of principal and interest on the principal amount outstanding and by selling financial assets.

The Company has made an irrevocable election to present subsequent changes in the fair value of equity investments not held for trading in Other Comprehensive Income.

Financial Assets at Fair Value Through Profit or Loss ( FVTPL )

Financial Assets are measured at fair value through profit or loss unless it is measured at amortised cost or at fair value through other comprehensive income on initial recognition. The transaction costs directly attributable to the acquisition of financial assets and liabilities at fair value through profit or loss are immediately recognized in profit or loss.

Financial Liabilities

Financial Liabilities are measured at amortised cost using the effective interest method.

Equity Investment

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 Group may make an irrevocable election to present in other comprehensive income subsequent changes in the fair value. The Group makes such election on an instrument by instrument basis. The classification is made on initial recognition and is irrevocable.

Loan and Borrowings

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the Effective Interest Rate (EIR) method. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the EIR amortisation process. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the Statement of Profit and Loss.

Trade and Other Payables

These amounts represent liability for good and services provided to the Company prior to the end of financial year which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. Trade and other payables are presented as current liabilities unless payment is not due within 12 months after the reporting period. They are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.

Offsetting of Financial Instruments

Financial assets and financial liabilities are offset and the net amount is reported in financial statements if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.

I. Investments in Subsidiaries

A Subsidiary is an entity that is controlled by the Company.

The Company accounts for the each category of investments in subsidiaries at cost in accordance with Ind AS 27- Separate Financial Statements.

II. Impairment

Financial Assets (other than at fair value)

The Company assesses on a forward looking basis the expected credit losses associated with its assets carried at amortised cost and FVTOCI debt instruments. The impairment methodology applied depends on whether there has been a significant increase in credit risk.

For trade receivables only, the Company applies the simplified approach permitted by Ind AS 109 Financial Instruments, which requires expected lifetime losses to be recognised from initial recognition of the receivables.

1.11 INVENTORIES

Inventories are stated at the lower of cost and net realizable value.

Cost of Raw Material is determined on FIFO basis.

Stores and Consumables are valued at cost or net realizable value whichever is lower.

Finished goods are valued at cost or net realizable value whichever is lower. Cost comprises direct materials and where applicable, direct labour costs, those overheads that have been incurred in bringing the inventories to their present location and condition.

Net realizable value represents the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution.

Work in Progress is valued at cost or net realizable value whichever is less. Cost comprises direct materials and appropriate portion of direct labour costs, manufacturing overheads and depreciation.

1.12 RECOVERABILITY OF TRADE RECEIVABLE

Judgements are required in assessing the recoverability of overdue trade receivables and determining whether a provision against those receivables is required. Factors considered include the credit rating of the counterparty, the amount and timing of anticipated future payments and any possible actions that can be taken to mitigate the risk of non-payment.

1.13 LITIGATION

From time to time, the Company is subject to legal proceedings, the ultimate outcome of each being always subject to many uncertainties inherent in litigation. A provision for litigation is made when it is considered probable that a payment will be made and the amount of the loss can be reasonably estimated. Significant judgement is made when evaluating, among other factors, the probability of unfavourable outcome and the ability to make a reasonable estimate of the amount of potential loss. Litigation provisions are reviewed at each accounting period and revisions made for the changes in facts and circumstances.

1.14 BORROWING COSTS

Borrowing Costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets, wherever applicable, till the assets are ready for their intended use. Such capitalisation is done only when it is probable that the asset will result in future economic benefits and the costs can be measured reliably. Capitalisation of borrowing costs commences when all the following conditions are satisfied:

i. Expenditure for the acquisition, construction or production of a qualifying asset is being incurred;

ii. Borrowing costs are being incurred; and

iii. Activities that are necessary to prepare the asset for its intended use are in progress.

A qualifying asset is one which necessarily takes substantial period to get ready for intended use. All other borrowing costs are charged to revenue account. Capitalisation of borrowing cost is suspended when active development is interrupted

1.15 EMPLOYEE BENEFITS

i. Short term employee benefit obligations

Liabilities for wages, salaries, including non-monetary benefits that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related services are recognised in respect of employees'' services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are to be settled. The liabilities are presented as current employee benefit obligations in the balance sheet.

ii. Other long term employee benefit obligations

The liabilities for earned leave is not expected to be settled wholly within 12 months after the end of the period in which employees render the related service. They are therefore measured as the present value of expected future payments to be made in respect of services provided by employees up to the end of reporting period using the projected unit credit method. The benefits are discounted using the market yield at the end of reporting period that have terms approximating to the terms of related obligation. Remeasurement as a result of experience adjustments and changes in actuarial assumptions are recognised in the other comprehensive income.

The obligations are presented as current liabilities in the balance sheet if the Company does not have unconditional right to defer settlement for at least 12 months after the reporting period, regardless of when the actual settlement is expected to occur.

iii. Post-employment obligations

The Company operates the following post-employment schemes:

A. Defined benefit plans such as Gratuity; and

B. Defined contribution plan such as Provident Fund Gratuity Obligations

The liability or asset recognised in the balance sheet in respect of defined benefit gratuity plans is present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit obligation is calculated annually by actuaries using the projected unit credit method.

The present value of the defined benefit obligations is determined by discounting the estimated future cash outflows by reference to market yields at the end of the reporting period on government bonds that have terms approximating to the terms of the related obligation.

The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is included in employee benefit expenses in the statement of profit and loss.

Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised in the period in which they occur, directly in other comprehensive income. They are included in retained earnings in the statement of changes in equity and in the balance sheet.

Changes in present value of the defined benefit obligation resulting from plan amendment or curtailments are recognised immediately in profit or loss as past service cost.

Defined Contribution Plans

The Company pays provident fund contributions to publicly administered funds as per the local regulations. The Company has no further payment obligations once the contributions have been paid. The contributions are accounted for as defined contribution plans and the contributions are recognised as employee benefit expenses when they are due. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in the future payment is available.

1.16 CENVAT / GST

CENVAT/GST Credit of Raw Materials and Other Consumables is accounted at the time of purchase and the same is being adjusted to the cost of Raw Materials and Other Consumables.

1.17 ACCOUNTING FOR TAXES ON INCOME Income Taxes

The income tax expense or credit for the period is the tax payable on the current period''s taxable income based on the applicable income tax rate for each jurisdiction adjusted by changes in Deferred Tax Assets and Liabilities attributable to temporary differences and to unused tax losses.

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period i.e. as per the provisions of the Income Tax Act, 1961, as amended from time to time. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities, based on the rates and tax laws enacted or substantively enacted, at the reporting date in the country where the Company operates and generates taxable income. Current tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity.

Deferred Taxes

Deferred tax is provided in full on temporary difference arising between the tax bases of the assets and liabilities and their carrying amounts in standalone financial statements. Deferred tax amounts of income taxes recoverable in future periods in respect of deductible temporary differences, the carry forward of unused tax losses and the carry forward of unused tax credits.

Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

Deferred Tax Assets are recognised for all deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses.

Deferred Tax Assets and Liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the Company has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

Current and Deferred Tax is recognised in the Statement of Profit and Loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.

The carrying amount of Deferred Tax Assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the Deferred Tax Asset to be utilised. Unrecognised Deferred Tax Assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.

1.18 PROVISIONS AND CONTINGENT LIABILITIES

Provisions are recognised 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. When the Company expects some or all of a provision to be reimbursed, for example, under an insurance contract, the reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the Statement of Profit and Loss net of any reimbursement. Provisions are not recognised for future operating losses.

Provisions are measured at the present value of management''s best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognised as interest expense.

As a policy, the company is regularly accessing the liability arising due to delay in fulfilment of the obligation against advance licenses taken for duty free import of the goods / various investment related schemes and required provisions are carried out in the books.

Contingent Liability is disclosed in the case of:

i. A present obligation arising from the past events, when it is not probable that an outflow of resources will be required to settle the obligation;

ii. A present obligation arising from the past events, when no reliable estimate is possible;

iii. A possible obligation arising from the past events, unless the probability of outflow of resources is remote. Contingent liabilities are not provided for and if material, are disclosed by way of notes to accounts. Contingent assets are not recognized in financial statements. However, the same is disclosed, where an inflow of economic benefit is probable.

1.19 LEASES

Leases are classified as finance leases whenever the terms of lease transfer substantially all the risks and rewards of ownership to the Lessee. Leases where a significant portion of the risks and rewards of ownership are retained by the Lessor are classified as operating leases.

(i) Operating Lease:

Operating lease payments are recognized as an expense in the Statement of Profit and Loss on a straight-line basis over the lease term except where another systematic basis is more representative of the time pattern in which economic benefits from leased assets are consumed. The aggregate benefit of incentives (excluding inflationary increases where rentals are structured solely to increase in line with the expected general inflation to compensate for the Lessor''s inflationary cost increases, such increases are recognised in the year in which the benefits accrue) provided by the Lessor is recognized as a reduction of rental expense over the lease term on a straight-line basis.

(ii) Finance Lease:

Assets held under finance leases are initially recognized as assets of the Company at their fair value at the inception of the lease or, if lower, at the present value of the minimum lease payments. The corresponding liability to the Lessor is included in the Balance Sheet as a finance lease obligation.

Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets or, where shorter, the term of the relevant lease. Lease payments are apportioned between finance expenses and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance expenses are recognized immediately in Statement of Profit or Loss, unless they are directly attributable to qualifying assets, in which case they are capitalized in accordance with the Company''s general policy on borrowing costs. Contingent rentals are recognized as expenses in the periods in which they are incurred.

1.20 EARNING PER SHARE Basic Earnings Per Share

Basic Earnings Per Share is calculated by dividing the profit attributable to owners of the Company by the weighted average number of equity shares outstanding during the period. Earnings considered in ascertaining the company''s earnings per share is the net profit for the period after deducting preference dividends, if any, and any attributable distribution tax thereto for the period.

Diluted Earnings Per Share

Diluted Earnings Per Share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential equity shares and the weighted average number of additional equity shares that would have been outstanding assuming the conversion of all dilutive potential equity shares

1.21 CASH AND CASH EQUIVALENTS

Cash and Cash Equivalents comprise cash and deposits with banks. The Company considers all highly liquid investments with a remaining maturity at the date of purchase of three months or less and that are readily convertible to known amounts of cash to be cash equivalents.

For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, deposits held at call with financial institutions and other short term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

1.22 STATEMENT OF CASH FLOWS

Cash Flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing Cash Flows. The cash flows from operating, investing and financing activities of the Company are segregated.

Amendment to Ind AS 7:

The amendment to Ind AS 7 requires the entities to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and noncash changes, suggesting inclusion of a reconciliation between the opening and closing balances in the balance sheet for liabilities arising from financing activities, to meet the disclosure requirement.

1.23 EVENTS OCCURING AFTER THE REPORTING DATE

Adjusting events occurring after the balance sheet date are recognized in the financial statements. Material non adjusting events occurring after the balance sheet date that represents material change and commitment affecting the financial position are disclosed in the Director''s Report.

1.24 Exceptional Items

Certain occasions, the size, type or incidence of an item of income or expense, pertaining to the ordinary activities of the Company is such that disclosure improves the understanding of the performance of the Company, such income or expense is classified as an exceptional item and accordingly, disclosed in the notes accompanying to the financial statements.

ii) The Company had made investment in its Subsidiary Synthesis International Limited (Wholly Owned Subsidiary). The company has already initiated the process for winding up of the Company with competent authority. As a matter of prudence, the company has written off diminution in carrying value of investments of Rs. 256.86 Lakhs as on 1st April 2016.

iii) The Company had made investment in its Subsidiary Kiri Investment and Trading Singapore Private Limited and Kiri International (Mauritius) Private Limited (both Wholly Owned Subsidiary). Both the entities already liquidated and accordingly investment in these companies have been written off.

Note

i) Out of the total long term investment of Rs. 28,00,00,000 in the redeemable preference shares of Lonsen Kiri Chemical Industries Limited a Joint Venture Company, a sum of Rs. 3,20,00,000 was due and receivable by the Company in December, 2017. However, the Company has not received this money so far. We have been informed that the Company is likely to receive the same during the financial year 2018-19. Hence, this sum has been shown as current investments.

Note

i) Trade Receivables exceeding six months Includes Rs. 274.65 Lakhs as at 31st March 2018 (Previous Year as at 31st March 2017 Nil and as at 1st April 2016 Nil ) due from related parties.

ii) Trade Receivables Others Includes Rs. 3680.65 Lakhs as at 31st March 2018 (Previous Year as at 31st March 2017 Rs. 1914.91 Lakhs and as at 1st April 2016 Nil) due from related parties.

iii) The Company has called for balance confirmation of Trade Receivables on random basis. Out of which the Company has received response from some of the parties, which are subject to reconciliation with Company''s account. The other balances of Trade Receivables are subject to confirmation.

The details of long term borrowings and current maturity of long term borrowings loans guaranteed by Directors are set out below :

Secured Loans

Loans from Invent Assets Securitisation and Reconstruction Private Limited, and Assets Care and Reconstruction Enterprise Limited are secured by personal Guarantees of some of the directors.

The details of terms of repayment etc of long term borrowings and current maturity of long term borrowings are given below :

In respect of debts due to Invent Assets Securitisation and Reconstruction Private Limited ("Invent") and as per settlement agreements executed by the Company with Invent, the outstanding settlement amount shall be repayable in Quarterly instalments starting from September-2015 ending September, 2022. In respect of debts due to Assets Care and Reconstruction Enterprise Limited ("ACRE") and as per settlement agreement executed by the Company with ACRE, the outstanding settlement amount shall be repayable in Quarterly instalments starting from March, 2015 ending September, 2019.


Mar 31, 2017

1. SIGNIFICANT ACCOUNTING POLICIES

1.1 Accounting Convention:

The financial statements are prepared under the historical cost convention on the "Accrual Concept" of accountancy in accordance with the accounting principles generally accepted in India and comply with the accounting standards issued by the Institute of Chartered Accountants of India to the extent applicable and with the relevant provisions of the Companies Act, 2013.

1.2 Use of Estimates:

The preparation of the financial statements requires estimates and assumption to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual result and estimates are recognized in the period in which the results are known / materialized.

1.3 Accounting for Fixed Assets:

Fixed Assets are stated at cost of acquisition and subsequent improvements net of CENVAT credit and VAT but including freight and other incidental expenses related to acquisition, installation and foundation less accumulated depreciation. Direct expenses as well as pro rata identifiable indirect expenses on the projects during construction period are capitalized and apportioned on fixed assets on the date of commencement of commercial production.

1.4 Depreciation Accounting:

Depreciation has been provided on straight line method and in the manner specified in Schedule II to the Companies Act, 2013. Depreciation is not recorded on capital work-in-progress until construction and installation are complete and asset is ready for its intended use. In accordance with the provisions of the Companies Act 2013, effective from April 1, 2014, the company has reassessed the remaining useful life of its Fixed Assets as prescribed by Schedule II to the Act or actual useful life of assets, whichever is lower. The carrying value has been depreciated over the remaining of the revised life of the assets and recognized in the Statement of Profit & Loss.

1.5 Impairment of Assets:

An assets is treated as impaired when the carrying cost of assets exceeds its recoverable value & impairment loss is charged to Statement of profit and loss in the period in which assets is identified as impaired. The impairment loss, if any recognized in prior accounting periods is reversed if there has been a changed in the estimate of recoverable amount.

1.6 Borrowing Cost:

Borrowing Costs that are attributable to the acquisition, construction or production of qualifying fixed assets are capitalized as part of the cost of such assets. All other borrowing costs are recognized as expenses in the period in which they are incurred.

1.7 Accounting for Investments:

Current investments are carried at the lower of cost and fair value computed category wise. Long term investments are stated at cost. Provision for diminution in the value of long term investments is made, only if, in the opinion of the management, such a decline is regarded as being other than temporary.

1.8 Valuation of Inventories:

The inventories are valued as under:

a. Raw materials are valued at lower of cost excluding excise duty and other taxes or market value.

b. Work in process is valued at lower of cost or market value. Material lying on shop floor, awaiting packing and sending in bonded warehouse have been treated as work-in-process.

c. Semi finished goods are valued at lower of cost to the stage of completion or market value.

d. Finished goods are valued at lower of cost exclusive of excise duty or market value.

e. Stock of packing materials is valued at lower of cost or market value.

1.9 Revenue Recognition: Sales

Sales are recognized when goods are supplied and are recorded net of trade discounts, rebates and Value Added Tax.

Interest:

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

Dividends:

Revenue is recognized when the shareholders'' right to receive payment is established by the balance sheet date. Dividend from subsidiaries/associates is recognized even if same are declared after the balance sheet date but pertains to period on or before the date of balance sheet as per the requirement of Schedule III to the Companies Act, 2013.

Export Incentives:

Revenue is recognized on an accrual basis. The revenue is accounted on a going concern basis.

1.10 Accounting for effects of changes in foreign exchange rates:

Outstanding balances of foreign currency monetary items at the year end are restated at the exchange rate prevailing at the year end. The exchange rate difference arising there from has been recognized as income or expense in the current year''s Statement of Profit and Loss.

Foreign currency transactions of revenue nature are translated into Indian Rupees at the exchange rate prevailing on the date of financial transactions.

1.11 Accounting for Retirement Benefits :

i) Contributions to Employees'' Provident Fund remitted to statutory authority are charged to revenue.

ii) Liability on leave encashment to employees is provided and paid on actual basis and charged accordingly.

iii) The company has made an arrangement with Life Insurance Corporation of India and State Bank of India for covering gratuity liability inclusive of past services.

1.12 Accounting for Taxes on Income :

Current tax is determined as the amount of tax payable in respect of taxable income for the period.

Deferred tax resulting from "timing difference" between taxable incomes and accounting income is accounted for, using the tax rates and tax laws that have been enacted or substantially enacted as on the Balance Sheet date.

1.13 Provisions, Contingent Liabilities and Contingent Assets :

Contingent Liabilities being a possible obligation as a result of past events the existence of which will be confirmed by the occurrence or non-occurrence of one or more future events not wholly in the control of the company. Contingent Liabilities are not recognized in the accounts. Further the nature of such liabilities, an estimate of its financial effect, etc. is disclosed as a part of Notes to Financial Statements.

1.14 Lease Rentals:

Operating lease is charged to Statement of profit and loss on accrual basis.

The details of long term borrowings and current maturity of long term borrowings Loans guaranteed by Directors are set out below : Secured Loans

Loans from Invent Assets Securitization and Reconstruction Private Limited, and Assets Care and Reconstruction Enterprise Limited are secured by personal Guarantees of some of the directors.

The details of terms of repayment etc of long term borrowings and current maturity of long term borrowings are given below :

In respect of debts due to Invent Assets Securitization and Reconstruction Private Limited ("Invent") and as per settlement agreements executed by the Company with Invent, the outstanding settlement amount shall be repayable in Quarterly installments starting from September-2015 ending September, 2022. In respect of debts due to Assets Care and Reconstruction Enterprise Limited ("ACRE") and as per settlement agreements executed by the Company with ACRE, the outstanding settlement amount shall be repayable in Quarterly installments starting from March, 2015 ending September, 2019.


Mar 31, 2014

1.1 Accounting Convention:

The financial statements are prepared under the historical cost convention on the "Accrual Concept" of accountancy in accordance with the accounting principles generally accepted in India and comply with the accounting standards issued by the Institute of Chartered Accountants of India to the extent applicable and with the relevant provisions of the Companies Act, 1956.

1.2 Use of Estimates: The preparation of the Financial statements requires estimates and assumption to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual result and estimates are recognized in the period in which the results are known / materialized.

1.3 Accounting for Fixed Assets:

Fixed Assets are stated at cost of acquisition and subsequent improvements net of CENVAT credit and VAT but including freight and other incidental expenses r elated to acquisition, installation and foundation less accumulated depreciation. Direct expenses as well as pro rata identifi able indirect expenses on the projects during construction period are capitalized and apportioned on fixed assets on the date of commencement of commercial production.

1.4 Depreciation Accounting:

Depreciation has been provided on straight line method and at the rates and in the manner specified in Schedule XIV of the Companies Act, 1956. Depreciation is not recorded on capital work-in-progress until construction and installation are complete and asset is ready for its intended use. Capital work - in - progress includes capital advances.

1.5 Impairment of Assets:

An assets is treated as impaired when the carrying cost of assets exceeds its recoverable value and impairment loss is charged to statement of profit and loss in the peri od in which assets is identified as impaired. The impairment loss, if any recognized in prior accounting periods is reversed if there has been a changed in th e estimate of recoverable amount.

1.6 Borrowing Cost:

Borrowing Costs that are attributable to the acquisition, construction or production of qualifying fixed assets are capitalized as part of the cost of such assets. All other borrowing costs are recognized as expenses in the period in which they are incurred.

1.7 Preliminary and Pre-operative Expenses

Preliminary and pre-operative expenses are written off in 10 equal installments.

1.8 Accounting for Investments:

Current investments are carried at the lower of cost and fair value computed category wise. Long term investments are stated at cost. Provision for diminution in the value of long term investments is made, only if, in the opinion of the management, such a decline is regarded as being other than temporary.

1.9 Valuation of Inventories:

The inventories are valued as under:

a. Raw materials are valued at lower o f cost excluding excise duty and other taxes or market value.

b. Work in process is valued at lower of cost or market value . Material lying on shop floor and awaiting packing and sending in bonded warehouse have been treated as work-in-process.

c. Semi finished goods are valued at lower of cost to the stage of completion or market value.

d. Finished goods ar e valued at lower of cost or market value.

e. Stock o f packing materials is valued at lower of cost or market value.

1.10 Revenue Recognition:

Sales

Sales are recognised when goods are supplied and are recorded net of trade discounts, rebates and Value Added Tax.

Interest

Revenue is recognised on a time proportion basis taking into account the amount outstanding and the rate appli cable.

Dividends

Revenue is recognised when the shareholders'' / unit holders'' right to receive payment is established by the balance sheet date. Dividend from subsidiaries is recognized even if same are declared after the balance sheet date but pertain s to period on or before the date of balance sheet as per the requirement of Schedule VI o f the Companies Act, 1956.

Export Incentives

Revenue is recognized on an accrual basis. The revenue is accounted on a going concern basis.

1.11 Accounting for effects of changes in foreign exchange rates:

Outstanding balances of foreign currency monetary items at the year end are restated at the exchange rate prevailing at the year end. The exchange rate difference arising there from has been recognised as income or expense in the current year''s Statement of Profit and Loss.

Foreign currency translations of revenue nature are translated into Indian Rupees at the exchange rate prevailing on the date of financial transactions.

In case of forward contracts, the difference between the forward rate and the exchange rate, being as premium or discoun t, at the inception of a forward exchange contract is recognized as income or expense over the life of the contract. Exchange differences on such contracts are recognized in the statement of profit and loss in the reporting period in which the rates change. Any profit or loss arising on cancellation or renewal of forwar d exchange contract is recognized as income or as expense for the period.

1.12 Accounting for Retirement Benefits :

i) Contributions to Employees'' Provident Fund r emitted to statutory authority are charged to revenue.

ii) Liability on leave encashment to employees is provided on mercantile basis.

iii) The company has made an arrangement with Life Insurance Corporation of India / SBI Life Insurance Company Limited for covering gratuity liability coverin g past services as well.

1.13 Accounting for Taxes on Income :

Current tax is determined as the amount of tax payable in respect of taxable income for the period.

Deferred tax resulting from "timing difference" between taxable incomes and accounting income is accounted for, usin g the tax rates and tax laws that have been enacted or substantially enacted as on the Balance Sheet date.

1.14 Provisions, Contingent Liabilities and Contingent Assets :

Contingent Liabilities being a possible obligation as a result of past events the existence of which will be confirmed by the occurrence or non-occurrence of one or more future events not wholly in the control of the company. Contingent Liabilities are not recognized in the accounts. Further the nature of such li abilities, an estimate of its financial effect, etc. is disclosed as a part of Notes to Financial Statements.

1.15 Lease Rentals:

Operating lease is charged to statement of profit and loss on accrual basis.


Mar 31, 2012

1.1) Accounting Convention:

The financial statements are prepared under the historical cost convention on the "Accrual Concept" of accountancy in accordance with the accounting principles generally accepted in India and comply with the accounting standards issued by the Institute of Chartered Accountants of India to the extent applicable and with the relevant provisions of the Companies Act, 1956.

1.2) Use of Estimates:

The preparation of the Financial statements requires estimates and assumption to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual result and estimates are recognized in the period in which the results are known / materialized.

1.3) Accounting for Fixed Assets:

Fixed Assets are stated at cost of acquisition and subsequent improvements net of CENVAT credit and VAT but including freight and other incidental expenses related to acquisition, installation and foundation less accumulated depreciation. Direct expenses as well as pro rata identifiable indirect expenses on the projects during construction period are capitalized and apportioned on fixed assets on the date of commencement of commercial production.

1.4) Depreciation Accounting:

Depreciation has been provided on straight line method and at the rates and in the manner specified in Schedule XIV of the Companies Act, 1956. Depreciation is not recorded on capital work-in-progress until construction and installation are complete and asset is ready for its intended use. Capital work-in-progress includes capital advances.

1.5) Impairment of Assets:

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

1.6) Borrowing Cost:

Borrowing Costs that are attributable to the acquisition, construction or production of qualifying fixed assets are capitalized as part of the cost of such assets. All other borrowing costs are recognized as expenses in the period in which they are incurred.

1.7) Preliminary and Pre-operative Expenses:

Preliminary and pre-operative expenses are written off in 10 equal installments.

1.8) Accounting for Investments:

Current investments are carried at the lower of cost and fair value computed category wise. Long term investments are stated at cost. Provision for diminution in the value of long term investments is made, only if, in the opinion of the management, such a decline is regarded as being other than temporary.

1.9) Valuation of Inventories:

The inventories are valued as under:

a. Raw materials are valued at lower of cost excluding excise duty and other taxes or market value.

b. Work in process is valued at lower of cost or market value. Material lying on shop floor and awaiting packing and sending in bonded warehouse have been treated as work-in-process.

c. Semi finished goods are valued at lower of cost to the stage of completion or market value.

d. Finished goods are valued at lower of cost or market value.

e. Stock of packing materials is valued at lower of cost or market value.

1.10) Revenue Recognition: Sales

Sales are recognised when goods are supplied and are recorded net of trade discounts, rebates and Value Added Tax.

Interest

Revenue is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable.

Dividends

Revenue is recognised when the shareholders' right to receive payment is established at the Balance Sheet date. Dividend from subsidiaries is recognized even if same are declared after the Balance Sheet date but pertains to period on or before the date of Balance Sheet as per the requirement of Schedule VI of the Companies Act, 1956.

Export Incentives

Revenue is recognized on an accrual basis. The revenue is accounted on a going concern basis.

1.11) Accounting for effects of changes in foreign exchange rates:

Outstanding balances of foreign currency monetary items at the year end are restated at the exchange rate prevailing at the year end. The exchange rate difference arising there from has been recognised as income or expense in the current year's Statement of Profit and Loss. Foreign currency translations of revenue nature are translated into Indian Rupees at the exchange rate prevailing on the date of financial transactions.

In case of forward contracts, the difference between the forward rate and the exchange rate, being as premium or discount, at the inception of a forward exchange contract is recognized as income or expense over the life of the contract. Exchange differences on such contracts are recognized in the Statement of Profit and Loss in the reporting period in which the rates change. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognized as income or as expense for the period.

1.12) Accounting for Retirement Benefits :

i) Contributions to Employees' Provident Fund remitted to statutory authority are charged to revenue.

ii) Liability on leave encashment to employees is provided on mercantile basis.

iii) The Company has made an arrangement with Life Insurance Corporation of India / State Bank of India for covering gratuity liability covering past services as well.

1.13) Accounting for Taxes on Income :

Current tax is determined as the amount of tax payable in respect of taxable income for the period. Deferred tax resulting from "timing difference" between taxable incomes and accounting income is accounted for, using the tax rates and tax laws that have been enacted or substantially enacted as on the Balance Sheet date.

1.14) Provisions, Contingent Liabilities and Contingent Assets :

Contingent Liabilities being a possible obligation as a result of past events the existence of which will be confirmed by the occurrence or non-occurrence of one or more future events not wholly in the control of the Company. Contingent Liabilities are not recognized in the accounts. Further the nature of such liabilities, an estimate of its financial effect, etc. is disclosed as a part of Notes to Accounts.

1.15) Lease Rentals:

Operating lease is charged to Statement of Profit and Loss on accrual basis.


Mar 31, 2011

1) Accounting Convention:

The financial statements are prepared under the historical cost convention on the "Accrual Concept" of accountancy in accordance with the accounting principles generally accepted in India and comply with the accounting standards issued by the Institute of Chartered Accountants of India to the extent applicable and with the relevant provisions of the Companies Act, 1956.

2) Use of Estimates:

The preparation of the Financial statements requires estimates and assumption to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual result and estimates are recognized in the period in which the results are known / materialized.

3) Accounting for Fixed Assets:

Fixed Assets are stated at cost of acquisition and subsequent improvements net of CENVAT credit and VAT but including freight and other incidental expenses related to acquisition, installation and foundation less accumulated depreciation. Direct expenses as well as pro rata identifiable indirect expenses on the projects during construction period are capitalized and apportioned on fixed assets on the date of commencement of commercial production.

4) Depreciation Accounting:

Depreciation has been provided on straight line method and at the rates and in the manner specified in Schedule XIV of the Companies Act, 1956. Depreciation is not recorded on capital work-in-progress until construction and installation are complete and asset is ready for its intended use. Capital work - in - progress includes capital advances.

5) Impairment of Assets:

An assets is treated as impaired when the carrying cost of assets exceeds its recoverable value and impairment loss is charged to profit and loss account in the period in which assets is identified as impaired. The impairment loss, if any recognized in prior accounting periods is reversed if there has been a changed in the estimate of recoverable amount.

6) Borrowing Cost:

Borrowing Costs that are attributable to the acquisition, construction or production of qualifying fixed assets are capitalized as part of the cost of such assets. All other borrowing costs are recognized as expenses in the period in which they are incurred.

7) Preliminary and Pre-operative Expenses:

Preliminary and pre-operative expenses are written off in 10 equal installments.

8) Accounting for Investments:

Current investments are carried at the lower of cost and fair value computed category wise. Long term investments are stated at cost. Provision for diminution in the value of long term investments is made, only if, in the opinion of the management, such a decline is regarded as being other than temporary.

9) Valuation of Inventories:

The inventories are valued as under:

a. Raw materials are valued at lower of cost excluding excise duty and other taxes or market value.

b. Work in process is valued at lower of cost or market value. Material lying on shop floor and awaiting packing and sending in bonded warehouse have been treated as work-in-process.

c. Semi finished goods are valued at lower of cost to the stage of completion or market value.

d. Finished goods are valued at lower of cost or market value.

e. Stock of packing materials is valued at lower of cost or market value.

10) Revenue Recognition: Sales

Sales are recognised when goods are supplied and are recorded net of trade discounts, rebates and Value Added Tax.

Interest

Revenue is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable.

Dividends

Revenue is recognised when the shareholders'/unit holders' right to receive payment is established by the balance sheet date. Dividend from subsidiaries is recognized even if same are declared after the balance sheet date but pertains to period on or before the date of balance sheet as per the requirement of Schedule VI of the Companies Act, 1956.

Export Incentives

Revenue is recognized on an accrual basis. The revenue is accounted on a going concern basis.

11) Accounting for effects of changes in foreign exchange rates:

Outstanding balances of foreign currency monetary items at the year end are restated at the exchange rate prevailing at the year end. The exchange rate difference arising there from has been recognised as income or expense in the current year's Profit and Loss account. Foreign currency translations of revenue nature are translated into Indian Rupees at the exchange rate prevailing on the date of financial transactions. In case of forward contracts, the difference between the forward rate and the exchange rate, being as premium or discount, at the inception of a forward exchange contract is recognized as income or expense over the life of the contract. Exchange differences on such contracts are recognized in the profit and loss account in the reporting period in which the rates change. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognized as income or as expense for the period.

12) Accounting for Retirement Benefits:

i) Contributions to Employees' Provident Fund remitted to statutory authority are charged to revenue.

ii) Liability on leave encashment to employees is provided on cash basis.

iii) The Company has made an arrangement with Life Insurance Corporation of India / State Bank of India for covering gratuity liability covering past services as well.

13) Accounting for Taxes on Income:

Current tax is determined as the amount of tax payable in respect of taxable income for the period. Deferred tax resulting from "timing difference" between taxable income and accounting income is accounted for, using the tax rates and tax laws that have been enacted or substantially enacted as on the Balance Sheet date.

14) Provisions, Contingent Liabilities and Contingent Assets:

Contingent Liabilities being a possible obligation as a result of past events the existence of which will be confirmed by the occurrence or non-occurrence of one or more future events not wholly in the control of the Company. Contingent Liabilities are not recognized in the accounts. Further the nature of such liabilities, an estimate of its financial effect, etc. is disclosed as a part of Notes to Financial Statements.

15) Lease Rentals: Operating lease is charged to profit and loss account on accrual basis.


Mar 31, 2010

1) Accounting Convention:

The financial statements are prepared under the historical cost convention on the "Accrual Concept" of accountancy in accordance with the accounting principles generally accepted in India and comply with the accounting standards issued by the Institute of Chartered Accountants of India to the extent applicable and with the relevant provisions of the Companies Act, 1956.

2) Disclosure of Accounting Policies :

The preparation of financial statements requires estimates and assumptions to be made that effect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual result and estimates are recognized in the period in which the result are known/materializes.

3) Use of Estimates:

The preparation of the Financial statements requires estimates and assumption to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual result and estimates are recognized in the period in which the results are known/materialized.

4) Accounting for Fixed Assets:

Fixed Assets are stated at cost of acquisition and subsequent improvements net of CENVAT credit and VAT but including freight and other incidental expenses related to acquisition, installation and foundation less accumulated depreciation. Expenditure during construction period are capitalized and apportioned on fixed assets on the date of commencement of commercial production.

5) Depreciation Accounting:

Depreciation has been provided on straight line method and at the rates and in the manner specified in Schedule XIV of the Companies Act, 1956.

Depreciation is not recorded on capital work-in-progress until construction and installation are complete and asset is ready for its intended use. Capital work - in - progress includes capital advances.

6) Impairment of Assets:

An assets is treated as impaired when the carrying cost of assets exceeds its recoverable value and impairment loss is charged to profit and loss account in the period in which assets is identified as impaired. The impairment loss, if any recognized in prior accounting periods is reversed if there has been a changed in the estimate of recoverable amount.

7) Intangible Assets:

Preliminary expenses have been written off in ten equal installments.

8) Borrowing Cost:

Borrowing Costs that are attributable to the acquisition, construction or production of qualifying fixed assets are capitalized as part of the cost of such assets. All other borrowing costs are recognized as expenses in the period in which they are incurred.

9) Accounting for Investments:

Current investments are carried at the lower of cost and fair value computed category wise. Long term investments are stated at cost. Provision for diminution in the value of long term investments is made, only if, in the opinion of the management, such a decline is regarded as being other than temporary.

10) Valuation of Inventories:

The inventories are valued as under:

a. Raw materials are valued at lower of cost excluding excise duty and other taxes or market value.

b. Work in process is valued at lower of cost or market value. Material lying on shop floor and awaiting packing and sending in bonded warehouse have been treated as work-in-process.

c. Semi finished goods are valued at lower of cost to the stage of completion or market value.

d. Finished goods are valued at lower of cost or market value.

e. Stock of packing materials is valued at lower of cost or market value.

11) Revenue Recognition:

Sales are recognised when goods are supplied and are recorded net of trade discounts, rebates and Value Added Tax.

Interest

Revenue is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable.

Dividends

Revenue is recognised when the shareholders/unit holders right to receive payment is established by the balance sheet date. Dividend from subsidiaries is recognized even if same are declared after the balance sheet date but pertains to period on or before the date of balance sheet as per the requirement of schedule VI of the Companies Act, 1956.

Export Incentives

Revenue is recognized on an accrual basis.The revenue is accounted on a going concern basis.

12) Accounting for effects of changes in foreign exchange rates:

Outstanding balances of foreign currency monetary items at year end are restated at the exchange rate prevailing at the year end. The exchange rate difference arising there from has been recognized as income or expense in the current years Profit and Loss account.

Foreign currency translations of revenue nature are translated into Indian Rupees at the exchange rate prevailing on the date of financial transactions.

In case of forward contracts, the difference between the forward rate and the exchange rate, being the premium or discount, at the inception of a forward exchange contract is recognized as income or expense over the life of the contract. Exchange differences on such contracts are recognized in the profit and loss account in the reporting period in which the rates change. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognized as income or as expense for the period.

13) Accounting for Retirement Benefits:

i) Contributions to Employees Provident Fund remitted to statutory authority are charged to revenue.

ii) Liability on leave encashment to employees are provided on accrual basis.

iii) The company has made an arrangement with Life Insurance Corporation of India for covering gratuity liability covering past services as well.

14) Accounting for Taxes on Income:

Current tax is determined as the amount of tax payable in respect of taxable income for the period.

Deferred tax resulting from "timing difference" between taxable incomes and accounting income is accounted for, using the tax rates and tax laws that have been enacted or substantially enacted as on the Balance Sheet date.

15) Provisions, Contingent Liabilities and Contingent Assets:

Contingent Liabilities being a possible obligation as a result of past events the existence of which will be confirmed by the occurrence or non-occurrence of one or more future events not wholly in the control of the company. Contingent Liabilities are not recognized in the accounts. Further the nature of such liabilities, an estimate of its financial effect, etc. is disclosed as a part of Notes to Accounts.

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