Accounting Policies of Nitin Spinners Ltd. Company

Mar 31, 2018

A. Significant Accounting Policies

A summary of the significant accounting policies applied in the preparation of the financial statements are as given below. These accounting policies have been applied consistently to all periods presented in the financial statements.

The Company has elected to utilise the option under Ind AS 101 by not applying the provisions of Ind AS 16 and Ind AS 38 retrospectively and continue to use the previous GAAP carrying amount as a deemed cost under Ind AS at the date of transition to Ind AS. Therefore, the carrying amount of property, plant and equipment and intangible assets as at 1st April, 2016, the Company''s date of transition to Ind AS, according to the previous GAAP were maintained in transition to Ind AS.

1. Property Plant & Equipment

1.1. Initial recognition and measurement

An item of property, plant and equipment recognised as an asset if and only if 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.

Items of Property, Plant and Equipment are measured at cost less accumulated depreciation/amortisation and accumulated impairment losses. Cost includes expenditure that is directly attributable to bringing the asset, inclusive of non-refundable taxes & duties, to the location and condition necessary for it to be capable of operating in the manner intended by management.

When parts of an item of property, plant and equipment have different useful lives, they are recognised separately.

Items of spare parts, stand-by equipment and servicing equipment which meet the definition of Property, Plant and Equipment are capitalised.

1.2. Subsequent costs

Subsequent expenditure is recognised as an increase in the carrying amount of the asset when it is probable that future economic benefits deriving from the cost incurred will flow to the enterprise and the cost of the item can be measured reliably.

The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Company and its cost can be measured reliably. The carrying amount of the replaced part is derecognised. The costs of the day-to-day servicing of Property, Plant and Equipment are recognised in Statement of Profit or Loss A/c as incurred.

1.3. Derecognition

Property, Plant and Equipment are derecognised when no future economic benefits are expected from their use or upon their disposal. Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment, and are recognised in the statement of profit and loss.

1.4. Depreciation

Assets are depreciated using straight line method over the estimated useful life of the asset as specified in Part “C” of Schedule II of Companies Act, 2013 except for Plant & Machinery (other than Laboratory Equipment, Fire Fighting Equipment and Tools &Equipment) whose estimated useful life is taken as 13 years (Triple Shift) after retaining residual life of 5% of original cost. Assets residual values and useful lives are reviewed at each financial year end considering the physical condition of the assets.

Depreciation on additions to/deductions from fixed assets during the year is charged on pro-rata basis from/up to the date on which the asset is available for use/disposed.

Where it is probable that future economic benefits deriving from the cost incurred will flow to the enterprise and the cost of the item can be measured reliably, subsequent expenditure on a PPE along-with its unamortised depreciable amount is charged off prospectively over the revised useful life determined by technical assessment.

In circumstance, where a property is abandoned, the cumulative capitalised costs relating to the property are written off in the same period.

2. Capital work-in-progress

The cost of self-constructed assets includes the cost of materials & direct labour, any other costs directly attributable to bringing the assets to the location and condition necessary for it to be capable of operating in the manner intended by management and borrowing costs.

Expenses directly attributable to construction of property, plant and equipment incurred till they are ready for their intended use are identified and allocated on a systematic basis on the cost of related assets.

3. Intangible assets and intangible assets under development

3.1. Initial recognition and measurement An intangible asset is recognised if and only if it is probable that the expected future economic benefits that are attributable to the asset will flow to the Company and the cost of the asset can be measured reliably. Intangible assets that are acquired by the Company, which have finite useful lives, are recognised at cost. Subsequent measurement is done at cost less accumulated amortisation and accumulated impairment losses. Cost includes any directly attributable incidental expenses necessary to make the assets ready for its intended use.

Expenditure on development activities is capitalised only if the expenditure can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable and the Company intends to and has sufficient resources to complete development and to use or sell the asset.

Expenditure incurred which are eligible for capitalisation under intangible assets are carried as intangible assets under development till they are ready for their intended use.

3.2. Subsequent costs

Subsequent expenditure is recognised as an increase in the carrying amount of the asset when it is probable that future economic benefits deriving from the cost incurred will flow to the enterprise and the cost of the item can be measured reliably.

3.3. Derecognition

An intangible asset is derecognised when no future economic benefits are expected from their use or upon their disposal. Gains and losses on disposal of an item of intangible assets are determined by comparing the proceeds from disposal with the carrying amount of intangible assets and are recognised in the statement of profit and loss.

3.4. Amortisation

Intangible assets having definite life is amortised on straight line method in their useful lives. Useful life of computer software is estimated at five years.

4. Borrowing Cost

Borrowing costs that are directly attributable to the acquisition, construction, exploration, development or erection of qualifying assets are capitalised as part of cost of such asset until such time the assets are substantially ready for their intended use. Qualifying assets are assets which take a substantial period of time to get ready for their intended use or sale. Capitalisation of borrowing costs ceases when substantially all the activities necessary to prepare the qualifying assets for their intended uses are complete. Borrowing costs consist of:

(a) interest expense calculated using the effective interest method as described in Ind AS 109 -‘Financial Instruments'',

(b) finance charges in respect of finance leases recognised in accordance with Ind AS 17 - ‘Leases'',

(c) exchange differences arising from foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs and,

(d) other costs that an entity incurs in connection with the borrowing of funds. Income earned on temporary investment of the borrowings pending their expenditure on the qualifying assets is deducted from the borrowing costs eligible for capitalisation.

All other borrowing costs are charged to revenue as and when incurred.

5. Statement of Cash Flows

Cash flow statement has been prepared in accordance with the Indirect method prescribed in Ind AS 7 ‘Statement of Cash Flows''.

6. Inventories

Inventories are valued at the lower of cost and net realisable value. Cost includes cost of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and condition. Costs of purchased inventory are determined after deducting rebates and discounts. Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale. Spare parts other than those capitalised as Property, Plant and Equipment are carried as inventory.

The diminution in the value of obsolete, unserviceable and surplus stores & spares is ascertained on review and provided for.

7. Cash and Cash Equivalent

Cash and cash equivalent in the balance sheet comprises cash at banks, cash on hand and short-term deposits with an original maturity of three months or less, which are subject to insignificant risk of change in value.

8. Government Grants

Government grants that compensate the Company for the cost of asset are recognised initially as deferred income when there is reasonable assurance that they will be received and the Company will comply with the conditions associated with the grant and are recognised in Statement of Profit & Loss A/c on a systematic basis over the useful life of the related asset. Grants that compensate the Company for expenses incurred are recognised over the period in which the related costs are incurred and are deducted from the related expenses.

9. Provisions, Contingent Liabilities and Contingent Assets

A provision is recognised if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost. The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at reporting date, taking into account the risks and uncertainties surrounding the obligation.

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably. The expense relating to a provision is presented in the statement of profit and loss net of any reimbursement.

Contingent liabilities are possible obligations that arise from past events and whose existence will only be confirmed by the occurrence or nonoccurrence of one or more future events not wholly within the control of the Company. Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated reliably, the obligation is disclosed as a contingent liability, unless the probability of outflow of economic benefits is remote. Contingent liabilities are disclosed on the basis of judgment of the management/independent experts. These are reviewed at each balance sheet date and are adjusted to reflect the current management estimate.

Contingent assets are possible assets that arise from past events and whose existence will be confirmed only by the occurrence or nonoccurrence of one or more uncertain future events not wholly within the control of the Company. Contingent assets are disclosed in the financial statements when inflow of economic benefits is probable on the basis of judgment of management. These are assessed continually to ensure that developments are appropriately reflected in the financial statements.

10. Foreign currency transactions and translation

Transactions in foreign currencies are initially recorded at the functional currency rates at the date the transaction first qualifies for recognition. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates of exchange at the reporting date. Exchange differences arising on settlement or translation of monetary items are recognised in Statement of Profit and Loss A/c in the year in which it arises.

Non-monetary items are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction.

11. Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company, the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold, and the revenue can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value of the consideration received or receivable and taking into account contractually defined terms of payment.

11.1 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, which generally coincides with dispatch. Revenue from export sales are recognised on shipment basis. Revenue from the sale of goods is measured at the fair value of the consideration received or receivable including excise duty, net of returns and allowances, trade discounts, volume rebates and value added tax/goods and service tax. Inter-divisional sales comprising of sale of power for captive consumption is reduced from gross turnover in arriving net turnover.

11.2 Rendering of services

Revenue from job work services is recognised based on the services rendered in accordance with the terms of contracts.

11.3 Other Export Benefit

Export Benefits are accounted for in the year of export at net market realisable value.

11.4 Interest Income

For all financial instruments classified and measured at amortised cost, interest income is recorded using the effective interest rate (EIR). The EIR is the rate that exactly discounts the estimated future cash receipts over the expected life of the financial instrument or a shorter period, where appropriate, to the net carrying amount of the financial asset. When calculating the effective interest rate, the Company estimates the expected cash flows by considering all the contractual terms of the financial instrument (for example, prepayment, extension, call and similar options) but does not consider the expected credit losses. Interest income is included in other income in the statement of Profit or loss.

11.5 Dividend

Dividend Income is recognised when the Company''s right to receive is established which generally occurs when the shareholders approve the dividend.

11.6 Other Income

Other income is recognised in the Statement of Profit and Loss A/c when increase in future economic benefits related to an increase in an asset or a decrease of a liability has arisen that can be measured reliably.

12. Employee Benefits

12.1. Short Term Benefit

Short-term employee benefit obligations are measured on an undiscounted basis and are booked as an expense as the related service is provided.

A liability is recognised for the amount expected to be paid under performance related pay if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

12.2. Post-Employment benefits

Employee benefit that are payable after the completion of employment are Post-Employment Benefit (other than termination benefit). These are of two types:

12.2.1. Defined contribution plans

Defined contribution plans are those plans in which an entity pays fixed contribution into separate entities and will have no legal or constructive obligation to pay further amounts. Provident Fund and Family Pension Funds are Defined Contribution Plans in which Company pays a fixed contribution and will have no further obligation.

12.2.2. Defined benefit plans

A defined benefit plan is a postemployment benefit plan other than a defined contribution plan.

Company pays Gratuity as per provisions of the Gratuity Act, 1972. The Company''s net obligation in respect of defined benefit plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value. Any unrecognised past service costs and the fair value of any plan assets are deducted. The discount rate is based on the prevailing market yields of Indian government securities as at the reporting date that have maturity dates approximating the terms of the Company''s obligations and that are denominated in the same currency in which the benefits are expected to be paid.

The calculation is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a liability to the Company, the present value of liability is recognised as provision for employee benefit. Any actuarial gains or losses inrespect of gratuity are recognised in OCI in the period in which they arise.

12.3 Other long-term employee benefits

Benefits under the Company''s leave encashment scheme constitute other longterm employee benefits. The Company''s net obligation in respect of leave encashment is the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value, and the fair value of any related assets is deducted. The discount rate is based on the prevailing market yields of Indian government securities as at the reporting date that have maturity dates approximating the terms of the Company''s obligations. The calculation is performed using the projected unit credit method. Any actuarial gains or losses are recognised in profit or loss in the period in which they arise.

13. Income Taxes

Income tax expense comprises current and deferred tax. Current tax expense is recognised in Statement of Profit and Loss A/c except to the extent that it relates to items recognised directly in other comprehensive income or equity, in which it is recognised in OCI or equity Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted and as applicable at the reporting date, and any adjustment to tax payable in respect of previous years. Current income taxes are recognised under ‘Income tax payable'' net of payments on account, or under ‘Tax receivables'' where there is a debit balance.

Deferred tax is recognised using the balance sheet method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.

Deferred tax is recognised in Statement of Profit and Loss A/c except to the extent that it relates to items recognised directly in OCI or equity, in which case it is recognised in OCI or equity A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised. Minimum Alternate Tax credit is recognised as deferred tax asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period. Such asset is reviewed at each Balance Sheet date and the carrying amount of the MAT credit asset is written down to the extent there is no longer a convincing evidence to the effect that the Company will pay normal income tax during the specified period.

Additional income taxes that arise from the distribution of dividends are recognised at the same time that the liability to pay the related dividend is recognised.

14. Leases:

14.1 Recognition:

At inception of an arrangement, the Company determines whether such an arrangement is or contains a lease. A specific asset is subject of a lease if fulfillment of the arrangement is dependent on the use of that specified asset. An arrangement conveys the right to use the asset if the arrangement conveys to the customer the right to control the use of the underlying asset. Arrangements that do not take the legal form of a lease but convey rights to customers/suppliers to use an asset in return for a payment or a series of payments are identified as either finance leases or operating leases.

14.2 Accounting for

14.2.1 Operating Leases

Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Company as lessee are classified as operating lease. Payments made under operating leases are recognised as an expense over the lease term.

14.2.2 Finance Lease

Leases of Property, Plant and Equipment where the Company, as lessee has substantially all risks and rewards of ownership are classified as finance lease. On initial recognition, assets held under finance leases are recorded as Property, Plant and Equipment and the related liability is recognised under borrowings. At inception of the lease, finance leases are recorded at amounts equal to the fair value of the leased asset or, if lower, the present value of the minimum lease payments. Minimum lease payments made under finance leases are apportioned between the finance expense and the reduction of the outstanding liability.

15. Impairment of Non-Financial Assets

The carrying amounts of the Company''s non-financial assets are reviewed at each reporting date to determine whether there is any indication of impairment considering the provisions of Ind AS 36 ‘Impairment of Assets''. If any such indication exists, then the asset''s recoverable amount (higher of its fair value less costs to disposal or its value in use) is estimated.

An impairment loss is recognised if the carrying amount of an asset or its Cash Generating Unit (CGU) exceeds its estimated recoverable amount. Impairment losses are recognised in profit or loss.

Impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount which is only to the extent that the asset''s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

16. Dividends

Dividends and Interim dividends payable to a Company''s shareholders are recognised as changes in equity in the period in which they are approved by the shareholders'' meeting and the Board of Directors respectively.

17. Material Prior Period Errors

Material prior period errors are corrected retrospectively by restating the comparative amounts for the prior periods presented in which the error occurred. If the error occurred before the earliest prior period presented, the opening balances of assets, liabilities and equity for the earliest prior period presented, are restated.

18. Earnings Per Share

Basic earnings per equity share is computed by dividing the net profit or loss attributable to equity shareholders of the Company by the weighted average number of equity shares outstanding during the financial year.

Diluted earnings per equity share is computed by dividing the net profit or loss attributable to equity shareholders of the Company by the weighted average number of equity shares considered for deriving basic earnings per equity share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares.

19. 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.

a. Financial assets

Initial recognition and measurement All financial assets are recognised initially at fair value plus or minus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition or issue of the financial asset.

Impairment of financial assets In accordance with Ind-AS 109, the Company applies expected credit loss (ECL) model for measurement and recognition of impairment loss on the financial assets and credit risk exposure.

For recognition of impairment loss on financial assets and risk exposure, the Company determines that whether there has been a significant increase in the credit risk since initial recognition. If credit risk has not increased significantly, 12-month ECL is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime ECL is used. If, in a subsequent period, the credit quality of the instrument improves then the entity reverts to recognising impairment loss allowance based on 12-month ECL.

In respect of Trade receivables or any financial asset that result from transactions that are within the scope of Ind AS 11 and Ind AS 18, Company follows ‘simplified approach'' for recognition of impairment loss allowance within the scope of Ind AS 11 and Ind AS 18, if they do not contain a significant financing component. It recognises impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition.

b. Financial liabilities

Initial recognition and measurement

All financial liabilities are recognised at fair value and in case of loans, net of directly attributable transaction cost. Fees of recurring nature are directly recognised in the Statement of Profit and Loss as finance cost.

Subsequent measurement

Financial liabilities are carried at amortised cost using the effective interest method. Amortised cost is calculated by taking into account any discount or premium on acquisition and any material transaction that are any integral part of the EIR. For trade and other payables maturing within one year from the balance sheet date, the carrying amounts approximate the fair value of the instrument.

Derecognition

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expired. 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 A/c. Derivative financial instruments The Company uses forwards to mitigate the risk of changes in interest rates, exchange rates and commodity prices. Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are also subsequently measured at fair value on the reporting date. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative. Any gains or losses arising from changes in the fair value of derivatives are taken to cash flow hedge reserve through Statement of Other Comprehensive Income.

These are accounted for as follows:

a) Cash flow hedge

When derivative is designated as a cash flow hedging instrument, the effective portion of changes in the fair value of the derivative is recognised in the cash flow hedging reserve being part of other comprehensive income. Any ineffective portion of changes in the fair value of the derivative is recognised immediately in the Statement of Profit and Loss. If the hedging instrument expires or is sold, terminated or exercised, the cumulative gain or loss previously recognised in the cash flow hedging reserve is transferred to the Statement of Profit and Loss upon the occurrence of the underlying transaction. If the forecasted transaction is no longer expected to occur, then the amount accumulated in cash flow hedging reserve is reclassified in the Statement of Profit and Loss.

b) Fair Value Hedge

Changes in the fair value of hedging instruments and hedged items that are designated and qualify as fair value hedges are recorded in the Statement of Profit and Loss. If the hedging relationship no longer meets the criteria for hedge accounting, the adjustment to the carrying amount of a hedged item for which the effective interest method is used is amortised to Statement of Profit and Loss over the period of maturity.

20. CSR Expenditure

Amount spent on CSR activities during the year is charged to Statement of Profit & Loss, if the same is of revenue nature. If the expenditure is of such nature, which may give rise to a capital asset, the same is recognised in the Balance Sheet as “CSR Assets” under respective Fixed Assets.

D. Major Estimates made in preparing Financial Statements:

1. Useful life of property, plant and equipment and intangible assets

The estimated useful life of property, plant and equipment is based on a number of factors including the effects of obsolescence, demand, competition and other economic factors (such as the stability of the industry and known technological advances) and the level of maintenance expenditures required to obtain the expected future cash flows from the asset.

Useful life of the assets other than Plant and machinery (except Laboratory Equipments, Fire Fighting Equipments and Tools & Equipments) are in accordance with Schedule II of the Companies Act, 2013.

The Company reviews at the end of each reporting date the useful life of property, plant and equipment, and are adjusted prospectively, if appropriate.

Intangible assets are being amortised on straight line basis over the period of five years.

2. Post-employment benefit plans

Employee benefit obligations are measured on the basis of actuarial assumptions which include mortality and withdrawal rates as well as assumptions concerning future developments in discount rates, the rate of salary increases and the inflation rate. The Company considers that the assumptions used to measure its obligations are appropriate and documented. However, any changes in these assumptions may have a material impact on the resulting calculations.

3. Provisions and contingencies

The assessments undertaken in recognising provisions and contingencies have been made in accordance with Ind AS 37, ‘Provisions, Contingent Liabilities and Contingent Assets''. The evaluation of the likelihood of the contingent events requires best judgment by management regarding the probability of exposure to potential loss. In case of change in the circumstances the following unforeseeable developments, the likelihood could alter.

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Mar 31, 2017

A. SIGNIFICANT ACCOUNTING POLICIES

1) Basis for preparation of Financial Statement

(a) The financial statements have been prepared under the historical cost convention and on the principles of going concern

in accordance with Indian Generally Accepted Accounting Principles, applicable Accounting Standards and provisions of the Companies Act, 2013.

(b) Accounting policies, not specifically referred to, are consistent with Generally Accepted Accounting Principles.

2) Revenue Recognition

(a) Sales are recognized when goods are supplied and effective control of goods associated with ownership is transferred to the buyer. Sales are recorded net of Sales Tax, return, discounts and rebates but including Excise Duties.

(b) Foreign exchange differences relating to sales are included in Revenue from operation.

(c) Other Income and Incentives/Benefits are accounted for on accrual basis.

(d) Claims lodged with insurance companies are accounted and credited to the relevant head when recognized by the insurance company.

(e) Inter-divisional sales comprising of sale of power for captive use is reduced from gross turnover in arriving net turnover.

3) Expenditure

(a) Expenses are accounted for on accrual basis and provisions are made for all known losses and liabilities.

(b) Rebate, claims a settlement on goods sold are accounted for as and when these are ascertained with reasonable accuracy.

4) Inventory

Inventories are valued at cost or net realizable value, whichever is lower. The cost in respect of various items of inventory is computed as under:

(a) Cost of raw materials and stores include duties, taxes, freight and other expenses and are net of Duty Drawback, VAT a CST refund, CENVAT credit wherever made applicable.

(b) Cost in relation to finished goods comprises of cost of materials, excise duty, production overheads and depreciation.

(c) Work in process is valued at raw material cost plus conversion cost depending upon the stage of completion.

(d) The material/finished goods dispatched from the factory but lying at port pending shipment are taken as a part of finished goods stock.

5) Investments

(a) Investments are stated at cost.

(b) Dividend income is accounted when the right to receive is established.

6) Fixed Assets

(i) Tangible Assets

Fixed Assets are stated at cost net of CENVAT/VAT credit availed and includes amounts added on revaluation, less accumulated depreciation and impairment loss, if any. All costs, including financing cost till commencement of commercial production, net charges on foreign exchange contracts and adjustments arising from exchange rate variations directly attributable to the fixed assets are capitalized.

(ii) Intangible Assets

Intangible Assets are stated at cost less accumulated amortization and impairment loss, if any.

7) Depreciation & Amortization

(i) Tangible Assets

a) Depreciation on Plant a Machinery (other than Laboratory Equipments, Fire Fighting Equipments and Tools a Equipments) is provided on Straight Line Method (SLM) considering estimated useful life of 13 years (Triple Shift). Depreciation on other fixed assets has been provided based on useful lives prescribed in Schedule II of the Companies Act, 2013.

b) Depreciation on Fixed Assets for trial run period is not charged.

(ii) Intangible Assets

Intangible Assets consist of Computer Software and the same are amortized over a period of 5 years.

8) Prior Period Items

Prior period items including adjustment/Claims, arisen / settled / noted during the year are debited / credited to the respective heads of account, if not material in the nature.

9) Borrowing Costs

Borrowing costs attributable to the acquisition or construction of Fixed Assets are capitalized as part of the cost of such assets for the period prior to commencement of commercial production or installation. All other costs are charged to revenue.

10) Government Grants

(a) Government Grants are recognized in accordance with AS-12 and reduced from the relevant expenses or shown as income.

The benefits attributable to the acquisition/installation of Fixed Assets till the commencement of commercial production are netted against the cost of fixed assets.

11) Foreign Exchange Transactions/Translations

Foreign currency transactions are recorded at the rates of exchange prevailing on the dates of the respective transactions. Foreign currency assets and liabilities covered by forward contracts are stated at the forward contract rates while those not covered by forward contracts are restated at rates ruling at the year end. Exchange rate differences are dealt with in the Profit and Loss statement except those relating to the acquisition of fixed assets, which are adjusted to the cost of the assets.

12) Financial Derivatives

Foreign Currency Derivative contracts are accounted for on the date of their settlement and realized gain/loss in respect of settled contracts are recognized in the Profit and Loss Statement, except where they relate to borrowings attributable to the acquisition of fixed assets, in that case they are adjusted to the carrying cost of the assets.

13) CENVAT

(a) The purchase cost of raw materials and other expenses has been considered net of CENVAT available on inputs.

(b) The CENVAT benefits attributable to acquisition/installation of fixed assets are netted off against the cost of fixed assets.

(c) CENVAT is accounted for on the basis of payments made in respect of goods cleared and provision is made for goods lying in Stock, if applicable and the same is treated as part of the cost of respective Stock

14) Research & Development

Revenue expenditure on Research and Development is charged against the profit of the year in which it is incurred. Capital expenditure on research and development is shown as addition to fixed assets.

15) Retirement Benefits

The Company’s contribution to Provident and other funds are charged to Profit a Loss Statement. The liability for gratuity and leave encashment is provided on the basis of actuarial valuation.

16) Provision for Current and Deferred Tax

a) Provision for Current Income Tax is made after considering MAT Credit entitlement, exemptions and deductions available under the Income Tax Act, 1961.

b) Deferred Tax Liability resulting from timing differences between book and tax profit is accounted for by using the tax rates and laws that are enacted or substantially enacted as on Balance Sheet date. The deferred tax assets is recognized and carried forward only to extent that there is a reasonable certainty that the assets will be realized in future.

17) Impairment of Assets

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

18) Deferred Revenue Expenditure

The Company does not recognise any Deferred Revenue Expenditure.

19) Provisions and Contingencies

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past event and it is probable that there will be an outflow of resources. Provisions except Gratuity and Leave Encashment benefits are not discounted to its present value and are determined based on best estimate of the expenditure required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimate. A contingent liability is disclosed unless the possibility of an out flow of resources embodying economic benefit is remote. Contingent assets are neither recognized nor disclosed in the financial statements.

20) CSR Expenditure

Amount spent on CSR activities during the year is charged to Statement of Profit a Loss, if the same is of revenue nature. If the expenditure is of such nature, which may give rise to a capital asset, the same is recognized in the Balance Sheet as “CSR Assets” under respective Fixed Assets.

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Mar 31, 2015

1) Basis for preparation of Financial Statement

(a) The financial statements have been prepared under the historical cost convention and on the principles of going concern in accordance with Indian Generally Accepted Accounting Principles, applicable Accounting Standards and provisions of the Companies Act, 2013.

(b) Accounting policies, not specifically referred to, are consistent with Generally Accepted Accounting Principles.

2) Revenue Recognition :

(a) Sales are recognised when goods are supplied and effective control of goods associated with ownership is transferred to the buyer. Sales are recorded net of Sales Tax, return, discounts and rebates but including Excise Duties.

(b) Foreign exchange differences relating to sales are included in Revenue from operation.

(c) Other Income and Incentives/Benefits are accounted for on accrual basis.

(d) Claims lodged with insurance companies are accounted and credited to the relevant head when recognized by the insurance company.

(e) Inter-divisional sales comprising of sale of power for captive use is reduced from gross turnover in arriving net turnover.

3) Expenditure

(a) Expenses are accounted for on accrual basis and provisions are made for all known losses and liabilities.

(b) Rebate, claims & settlement on goods sold are accounted for as and when these are ascertained with reasonable accuracy.

4) Inventory

Inventories are valued at cost or net realisable value, whichever is lower. The cost in respect of various items of inventory is computed as under :-

(a) Cost of raw materials and stores include duties, taxes, freight and other expenses and are net of Duty Drawback, VAT & CST refund, CENVAT credit wherever made applicable.

(b) Cost in relation to finished goods comprises of cost of materials, excise duty, production overheads and depreciation.

(c) Work in process is valued at raw material cost plus conversion cost depending upon the stage of completion.

(d) The material/finished goods despatched from the factory but lying at port pending shipment are taken as a part of finished goods stock.

5) Investments

(a) Investments are stated at cost.

(b) Dividend income is accounted when the right to receive is established.

6) Fixed Assets

(i) Tangible Assets

Fixed Assets are stated at cost net of CENVAT/VAT credit availed and includes amounts added on revaluation, less accumulated depreciation and impairment loss, if any. All costs, including financing cost till commencement of commercial production, net charges on foreign exchange contracts and adjustments arising from exchange rate variations directly attributable to the fixed assets are capitalized.

(ii) Intangible Assets

Intangible Assets are stated at cost less accumulated amortisation and impairment loss, if any.

7) Depreciation and Amortisation

(i) Tangible Assets

a) Depreciation on Plant & Machinery (other than Laboratory Equipments, Fire Fighting Equipments and Tools & Equipments) is provided on Straight Line Method (SLM) considering estimated useful life of 13 years (Triple Shift). Depreciation on other fixed assets has been provided based on useful lives prescribed in Schedule II of the Companies Act, 2013.

b) Depreciation on Fixed Assets for trial run period is not charged.

Intangible Assets consist of Computer Software and the same are amortised over a period of 5 years.

8) Prior Period Items

Prior period items including adjustment/Claims, arisen / settled / noted during the year are debited / credited to the respective heads of account, if not material in the nature.

9) Borrowing Costs

Borrowing costs attributable to the acquisition or construction of Fixed Assets are capitalized as part of the cost of such assets for the period prior to commencement of commercial production or installation. All other costs are charged to revenue.

10) Government Grants, Subsidy & incentives

(a) Interest subsidy received or receivable on Term Loans taken under TUF Scheme is recognized on accrual basis and reduced from the Financial Expenses. The TUF benefits attributable to the acquisition/installation of Fixed Assets till the commencement of commercial production are netted against the cost of fixed assets.

(b) Duty Drawback, Sales Tax refunds and other incentives are reduced from the cost of respective assets/ purchases.

11) Foreign Currency Transactions/Translations

Foreign currency transactions are recorded at the rates of exchange prevailing on the dates of the respective transactions. Foreign currency assets and liabilities covered by forward contracts are stated at the forward contract rates while those not covered by forward contracts are restated at rates ruling at the year end. Exchange rate differences are dealt with in the Profit and Loss statement except those relating to the acquisition of fixed assets, which are adjusted to the cost of the assets.

12) Financial Derivatives

Foreign Currency Derivative contracts are accounted for on the date of their settlement and realized gain/loss in respect of settled contracts are recognized in the Profit and Loss Statement, except where they relate to borrowings attributable to the acquisition of fixed assets, in that case they are adjusted to the carrying cost of the assets.

13) CENVAT

(a) The purchase cost of raw materials and other expenses has been considered net of CENVAT available on inputs.

(b) The CENVAT benefits attributable to acquisition/installation of fixed assets are netted off against the cost of fixed assets.

(c) CENVAT is accounted for on the basis of payments made in respect of goods cleared and provision is made for goods lying in Stock, if applicable and the same is treated as part of the cost of respective Stock

14) Research & Development

Revenue expenditure on Research and Development is charged against the profit of the year in which it is incurred. Capital expenditure on research and development is shown as addition to fixed assets.

15) Retirement Benefits

The company's contribution to Provident and other funds are charged to Profit & Loss Statement. The liability for gratuity and leave encashment is provided on the basis of actuarial valuation.

16) Provision for Current and Deferred Tax

a) Provision for Current Income Tax is made after considering Mat Credit entitlement, exemptions and deductions available under the Income Tax Act, 1961.

b) Deferred Tax Liability resulting from timing differences between book and tax profit is accounted for by using the tax rates and laws that are enacted or substantially enacted as on Balance Sheet date. The deferred tax assets is recognized and carried forward only to extent that there is a reasonable certainty that the assets will be realized in future.

17) Impairment of Assets

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

18) Deferred Revenue Expenditure

The Company does not recognize any Deferred Revenue Expenditure.

19) Provisions and Contingencies

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past event and it is probable that there will be an outflow of resources. Provisions except Gratuity and Leave Encashment benefits are not discounted to its present value and are determined based on best estimate of the expenditure required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimate. A contingent liability is disclosed unless the possibility of an out flow of resources embodying economic benefit is remote. Contingent assets are neither recognized nor disclosed in the financial statements.

---

Mar 31, 2014

1) Basis for preparation of Financial Statement

(a) The financial statements have been prepared under the historical cost convention and on the principles of going concern in accordance with Indian Generally Accepted Accounting Principles, applicable Accounting Standards and provisions of the Companies Act, 1956.

(b) Accounting policies, not specifically referred to, are consistent with Generally Accepted Accounting Principles.

2) Revenue Recognition :

(a) Sales are recognised when goods are supplied and effective control of goods associated with ownership is transferred to the buyer. Sales are recorded net of Sales Tax, return, discounts and rebates but including Excise Duties.

(b) Foreign exchange differences relating to sales are included in Revenue from operation.

(c) Other Income and Incentives/Benefits are accounted for on accrual basis.

(d) Claims lodged with insurance companies are accounted and credited to the relevant head when recognized by the insurance company.

(e) Inter-divisional sales comprising of sale of power for captive use is reduced from gross turnover in arriving net turnover.

3) Expenditure

(a) Expenses are accounted for on accrual basis and provisions are made for all known losses and liabilities.

(b) Rebate, claims & settlement on goods sold are accounted for as and when these are ascertained with reasonable accuracy.

4) Inventory

Inventories are valued at cost or net realisable value, whichever is lower. The cost in respect of various items of inventory is computed as under :- (a) Cost of raw materials and stores include duties, taxes, freight and other expenses and are net of Duty Drawback, VAT & CST refund, CENVAT credit wherever made applicable.

(b) Cost in relation to finished goods comprises of cost of materials, excise duty, production overheads and depreciation.

(c) Work in process is valued at raw material cost plus conversion cost depending upon the stage of completion.

(d) The material/finished goods despatched from the factory but lying at port pending shipment are taken as a part of finished goods stock.

5) Investments

(a) Investments are stated at cost.

(b) Dividend income is accounted when the right to receive is established.

6) Fixed Assets

Fixed Assets are stated at cost net of CENVAT/VAT credit availed and includes amounts added on revaluation, less accumulated depreciation and impairment loss, if any. All costs, including financing cost till commencement of commercial production, net charges on foreign exchange contracts and adjustments arising from exchange rate variations directly attributable to the fixed assets are capitalized.

7) Depreciation

(a) (i) Depreciation on Plant & Machinery (other than Computers and Office Equipments),

Electric Installations and Power Plant is provided on Straight Line Method (SLM) considering estimated useful life of 13 years.

(ii) Depreciation on other Fixed Assets is provided at the rates specified in Schedule XIV to the Companies Act, 1956 on Straight Line Method.

(b) Depreciation on Fixed Assets for trial run period is not charged.

8) Prior Period Items

Prior period items including adjustment/Claims, arisen / settled / noted during the year are debited / credited to the respective heads of account, if not material in the nature.

9) Borrowing Costs

Borrowing costs attributable to the acquisition or construction of Fixed Assets are capitalized as part of the cost of such assets for the period prior to commencement of commercial production or installation. All other costs are charged to revenue.

10) Government Grants, Subsidy & incentives

(a) Interest subsidy received or receivable on Term Loans taken under TUF Scheme is recognized on accrual basis and reduced from the Financial Expenses. The TUF benefits attributable to the acquisition/installation of Fixed Assets till the commencement of commercial production are netted against the cost of fixed assets.

(b) Duty Drawback, Sales Tax refunds and other incentives are reduced from the cost of respective assets/ purchases.

11) Foreign Currency Transactions

Foreign currency transactions are recorded at the rates of exchange prevailing on the dates of the respective transactions. Foreign currency assets and liabilities covered by forward contracts are stated at the forward contract rates while those not covered by forward contracts are restated at rates ruling at the year end. Exchange rate differences are dealt with in the Profit and Loss statement except those relating to the acquisition of fixed assets, which are adjusted to the cost of the assets.

12) Financial Derivatives

Foreign Currency Derivative contracts are accounted for on the date of their settlement and realized gain/loss in respect of settled contracts are recognized in the Profit and Loss Account, except where they relate to borrowings attributable to the acquisition of fixed assets, in that case they are adjusted to the carrying cost of the assets.

13) CENVAT

(a) The purchase cost of raw materials and other expenses has been considered net of CENVAT available on inputs.

(b) The CENVAT benefits attributable to acquisition/installation of fixed assets are netted off against the cost of fixed assets.

(c) CENVAT is accounted for on the basis of payments made in respect of goods cleared and provision is made for goods lying in Stock, if applicable and the same is treated as part of the cost of respective Stock

14) Research & Development

Revenue expenditure on Research and Development is charged against the profit of the year in which it is incurred. Capital expenditure on research and development is shown as addition to fixed assets.

15) Retirement Benefits

The company''s contribution to Provident and other funds are charged to Profit & Loss Statement. The liability for gratuity is provided on the basis of actuarial valuation and leave encashment liability on actual basis.

16) Provision for Current and Deferred Tax

a) Provision for Current Income Tax is made after considering Mat Credit entitlement, exemptions and deductions available under the Income Tax Act, 1961.

b) Deferred Tax Liability resulting from timing differences between book and tax profit is accounted for by using the tax rates and laws that are enacted or substantially enacted as on Balance Sheet date. The deferred tax assets is recognized and carried forward only to extent that there is a reasonable certainty that the assets will be realized in future.

17) Impairment of Assets

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

18) Deferred Revenue Expenditure

The Company does not recognize any Deferred Revenue Expenditure.

19) Provisions and Contingencies

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past event and it is probable that there will be an outflow of resources. Provisions except gratuity benefits are not discounted to its present value and are determined based on best estimate of the expenditure required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimate. A contingent liability is disclosed unless the possibility of an out flow of resources embodying economic benefit is remote. Contingent assets are neither recognized nor disclosed in the financial statements.

---

Mar 31, 2013

1) Basis for preparation of Financial Statement

(a) The financial statements have been prepared under the historical cost convention and on the principles of going concern in accordance with Indian Generally Accepted Accounting Principles, applicable Accounting Standards and provisions of the Companies Act, 1956.

(b) Accounting policies, not specifically referred to, are consistent with Generally Accepted Accounting Principles.

2) Revenue Recognition :

(a) Sales are recognised when goods are supplied and effective control of goods associated with ownership is transferred to the buyer. Sales are recorded net of Sales Tax, return, discounts and rebates but including Excise Duties.

(b) Foreign exchange differences relating to sales are included in Revenue from operation.

(c) Other Income and Incentives/Benefits are accounted for on accrual basis.

(d) Claims lodged with insurance companies are accounted and credited to the relevant head when recognized by the insurance company.

(e) Inter-divisional sales comprising of sale of power for captive use is reduced from gross turnover in arriving net turnover.

3) Expenditure

(a) Expenses are accounted for on accrual basis and provisions are made for all known losses and liabilities.

(b) Rebate, claims & settlement on goods sold are accounted for as and when these are ascertained with reasonable accuracy.

4) Inventory

Inventories are valued at cost or net realisable value, whichever is lower. The cost in respect of various items of inventory is computed as under :- (a) Cost of raw materials and stores include duties, taxes, freight and other expenses and are net of Duty Drawback, VAT & CST refund, CENVAT credit wherever made applicable.

(b) Cost in relation to finished goods comprises of cost of materials, excise duty, production overheads and depreciation.

(c) Work in process is valued at raw material cost plus conversion cost depending upon the stage of completion.

(d) The material/finished goods despatched from the factory but lying at port pending shipment are taken as a part of finished goods stock.

5) Investments

(a) Investments are stated at cost.

(b) Dividend income is accounted when the right to receive is established.

6) Fixed Assets

Fixed Assets are stated at cost net of CENVAT/VAT credit availed and includes amounts added on revaluation, less accumulated depreciation and impairment loss, if any. All costs, including financing cost till commencement of commercial production, net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the fixed assets are capitalized.

7) Depreciation

(a) (i) Depreciation on Plant & Machinery (other than Computers and Office Equipments), Electric

Installations and Power Plant is provided on Straight Line Method (SLM) considering estimated useful life of 13 years. (ii) Depreciation on other Fixed Assets is provided at the rates specified in Schedule XIV to the Companies Act, 1956 on Straight Line Method.

(b) Depreciation on Fixed Assets for trial run period is not charged.

8) Prior Period Items

Prior period items including adjustment/Claims, arisen / settled / noted during the year are debited / credited to the respective heads of account, if not material in the nature.

9) Borrowing Costs

Borrowing costs attributable to the acquisition or construction of Fixed Assets are capitalized as part of the cost of such assets for the period prior to commencement of commercial production or installation. All other costs are charged to revenue.

10) Government Grants, Subsidy & incentives

(a) Interest subsidy received or receivable on Term Loans taken under TUF Scheme is recognized on accrual basis and reduced from the Financial Expenses. The TUF benefits attributable to the acquisition/ installation of Fixed Assets till the commencement of commercial production are netted against the cost of fixed assets.

(b) Duty Drawback, Sales Tax refunds and other incentives are reduced from the cost of respective assets/ purchases.

11) Foreign Currency Transactions

Foreign currency transactions are recorded at the rates of exchange prevailing on the dates of the respective transactions. Foreign currency assets and liabilities covered by forward contracts are stated at the forward contract rates while those not covered by forward contracts are restated at rates ruling at the year end. Exchange rate differences are dealt with in the Profit and Loss statement except those relating to the acquisition of fixed assets, which are adjusted to the cost of the assets.

12) Financial Derivatives

Foreign Currency Derivative contracts are accounted for on the date of their settlement and realized gain/loss in respect of settled contracts are recognized in the Profit and Loss Account, except where they relate to borrowings attributable to the acquisition of fixed assets, in that case they are adjusted to the carrying cost of the assets..

13) CENVAT

(a) The purchase cost of raw materials and other expenses has been considered net of CENVAT available on inputs.

(a) The CENVAT benefits attributable to acquisition/installation of fixed assets are netted off against the cost of fixed assets.

(a) CENVAT is accounted for on the basis of payments made in respect of goods cleared and provision is ade for goods lying in Stock, if applicable and the same is treated as part of the cost of respective

Stock

14) Research & Development

Revenue expenditure on Research and Development is charged against the profit of the year in which it is incurred. Capital expenditure on research and development is shown as addition to fixed assets.

15) Retirement Benefits

The company''s contribution to Provident and other funds are charged to Profit & Loss Statement. The liability for gratuity is provided on the basis of actuarial valuation and leave encashment liability on actual basis.

16) Provision for Current and Deferred Tax

a) Provision for Current Income Tax is made after considering exemptions and deductions available under the Income Tax Act, 1961.

b) Deferred Tax Liability resulting from timing differences between book and tax profit is accounted for by using the tax rates and laws that are enacted or substantially enacted as on Balance Sheet date. The deferred tax assets is recognized and carried forward only to extent that there is a reasonable certainty that the assets will be realized in future.

17) Impairment of Assets

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

18) Deferred Revenue Expenditure

The Company does not recognize any Deferred Revenue Expenditure.

19) Provisions and Contingencies

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past event and it is probable that there will be an outflow of resources. Provisions except in respect of employee benefits are not discounted to its present vale and are determined based on best estimate of the expenditure required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimate. A contingent liability is disclosed unless the possibility of an out flow of resources embodying economic benefit is remote. Contingent assets are neither recognized nor disclosed in the financial statements.

---

Mar 31, 2012

1) Basis for preparation of Financial Statement

(a) The financial statements have been prepared under the historical cost convention and on the principles of going concern in accordance with Indian Generally Accepted Accounting Principles, applicable Accounting Standards and provisions of the Companies Act, 1956.

(b) Accounting policies, not specifically referred to, are consistent with Generally Accepted Accounting Principles.

2) Revenue Recognition :

(a) Sales are recognised when goods are supplied and effective control of goods associated with ownership is transferred to the buyer. Sales are recorded net of Sales Tax, return, discounts and rebates but including Excise Duties.

(b) Foreign exchange differences relating to sales are included in Revenue from operation.

(c) Other Income and Incentives/Benefits are accounted for on accrual basis.

(d) Claims lodged with insurance companies are accounted and credited to the relevant head when recognized by the insurance company.

(e) Inter-divisional sales comprising of sale of power for captive use is reduced from gross turnover in arriving net turnover.

3) Expenditure

(a) Expenses are accounted for on accrual basis and provisions are made for all known losses and liabilities.

(b) Rebate, claims & settlement on goods sold are accounted for as and when these are ascertained with reasonable accuracy.

4) Inventory

Inventories are valued at cost or net realisable value, whichever is lower. The cost in respect of various items of inventory is computed as under

(a) Cost of raw materials and stores include duties, taxes, freight and other expenses and are net of Duty Drawback, VAT & CST refund, CENVAT credit wherever made applicable.

(b) Cost in relation to finished goods comprises of cost of materials, excise duty, production overheads and depreciation.

(c) Work in process is valued at raw material cost plus conversion cost depending upon the stage of completion.

(d) The material/finished goods despatched from the factory but lying at port pending shipment are taken as a part of finished goods stock.

5) Investments

(a) Investments are stated at cost.

(b) Dividend income is accounted when the right to receive is established.

6) Fixed Assets

Fixed Assets are stated at cost net of CENVAT/VAT credit availed and includes amounts added on revaluation, less accumulated depreciation and impairment loss, if any. All costs, including financing cost till commencement of commercial production, net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the fixed assets are capitalized.

7) Depreciation

(a) (i) Depreciation on Plant & Machinery (other than Computers and Office Equipments), Electric Installations and Power Plant is provided on Straight Line Method (SLM) considering estimated useful life of 13 years.

(ii) Depreciation on other Fixed Assets is provided at the rates specified in Schedule XIV to the Companies Act, 1956 on Straight Line Method.

(b) Depreciation on Fixed Assets for trial run period is not charged.

8) Prior Period Items

Prior period items including adjustment/Claims, arisen / settled / noted during the year are debited / credited to the respective heads of account, if not material in the nature.

9) Borrowing Costs

Borrowing costs attributable to the acquisition or construction of Fixed Assets are capitalized as part of the cost of such assets for the period prior to commencement of commercial production or installation. All other costs are charged to revenue.

10) Government Grants, Subsidy & incentives

(a) Interest subsidy received or receivable on Term Loans taken under TUF Scheme is recognized on accrual basis and reduced from the Financial Expenses. The TUF benefits attributable to the acquisition/installation of Fixed Assets till the commencement of commercial production are netted against the cost of fixed assets.

(b) Duty Drawback, Sales Tax refunds and other incentives are reduced from the cost of respective assets/ purchases.

11) Foreign Currency Transactions

Foreign currency transactions are recorded at the rates of exchange prevailing on the dates of the respective transactions. Foreign currency assets and liabilities covered by forward contracts are stated at the forward contract rates while those not covered by forward contracts are restated at rates ruling at the year end. Exchange rate differences are dealt with in the Profit and Loss statement except those relating to the acquisition of fixed assets, which are adjusted to the cost of the assets.

12) Financial Derivatives

Foreign Currency Derivative contracts are accounted for on the date of their settlement and realized gain/loss in respect of settled contracts are recognized in the Profit and Loss Account, except where they relate to borrowings attributable to the acquisition of fixed assets, in that case they are adjusted to the carrying cost of the assets.

13) CENVAT

(a) The purchase cost of raw materials and other expenses has been considered net of CENVAT available on inputs.

(b) The CENVAT benefits attributable to acquisition/installation of fixed assets are netted off against the cost of fixed assets.

(c) CENVAT is accounted for on the basis of payments made in respect of goods cleared and provision is made for goods lying in Stock, if applicable and the same is treated as part of the cost of respective Stock

14) Research & Development

Revenue expenditure on Research and Development is charged against the profit of the year in which it is incurred. Capital expenditure on research and development is shown as addition to fixed assets.

15) Retirement Benefits

The company's contribution to Provident and other funds are charged to Profit & Loss Statement. The liability for gratuity is provided on the basis of actuarial valuation and leave encashment liability on actual basis.

16) Provision for Current and Deferred Tax

a) Provision for Current Income Tax is made after considering exemptions and deductions available under the Income Tax Act, 1961.

b) Deferred Tax Liability resulting from timing differences between book and tax profit is accounted for by using the tax rates and laws that are enacted or substantially enacted as on Balance Sheet date. The deferred tax assets is recognized and carried forward only to extent that there is a reasonable certainty that the assets will be realized in future.

17) Impairment of Assets

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

18) Deferred Revenue Expenditure

The Company does not recognize any Deferred Revenue Expenditure.

19) Provisions and Contingencies

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past event and it is probable that there will be an outflow of resources. Provisions except in respect of employee benefits are not discounted to its present vale and are determined based on best estimate of the expenditure required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimate. A contingent liability is disclosed unless the possibility of an out flow of resources embodying economic benefit is remote. Contingent assets are neither recognized nor disclosed in the financial statements.

---

Mar 31, 2011

1) Basis for preparation of Financial Statement

(a) The financial statements have been prepared under the historical cost convention and on the principles of going concern in accordance with Indian Generally Accepted Accounting Principles, applicable Accounting Standards and provisions of the Companies Act, 1956.

(b). Accounting policies, not specifically referred to, are consistent with Generally Accepted Accounting Principles.

2) Revenue Recognition :

(a) Sales are recognised when goods are supplied and effective control of goods associated with ownership is transferred to the buyer. Sales are recorded net of Sales Tax, return, discounts and rebates but including Excise Duties. Sale of surplus Power is also recognized as sales.

(b) Other Income and Incentives/Benefits are accounted for on accrual basis.

(c) Claims lodged with insurance companies are accounted and credited to the relevant head when recognized by the insurance company.

(d) Inter-divisional sales comprising of sale of power for captive use is reduced from gross turnover in arriving net turnover.

3) Expenditure

(a) Expenses are accounted for on accrual basis and provisions are made for all known losses and liabilities.

(b) Rebate, claims & settlement on goods sold are accounted for as and when these are ascertained with reasonable accuracy.

4) Inventory

Inventories are valued at cost or net realisable value, whichever is lower. The cost in respect of various items of inventory is computed as under :- (a) Cost of raw materials and stores include duties, taxes, freight and other expenses and are net of Duty

Drawback, VAT & CST refund, CENVAT credit wherever made applicable. The cost is determined on FIFO basis.

(b) Cost in relation to finished goods comprises of cost of materials, excise duty, production overheads and depreciation.

(c) Work in process is valued at raw material cost plus conversion cost depending upon the stage of completion.

(d) The material/finished goods despatched from the factory but lying at port pending shipment are taken as a part of finished goods stock.

5) Investments

(a) Investments are stated at cost.

(b) Dividend income is accounted when the right to receive is established.

6) Fixed Assets

Fixed Assets are stated at cost net of CENVAT/VAT credit availed and includes amounts added on revaluation, less accumulated depreciation and impairment loss, if any. All costs, including financing cost till commencement of commercial production, net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the fixed assets are capitalized.

7) Depreciation

(a) (i) Depreciation on Plant & Machinery (other than Computers and Office Equipments), Electric Installations and Power Plant is provided on Straight Line Method (SLM) considering estimated useful life of 13 years. Earlier the same was provided on the basis of rate applicable to Continuous Process Plant on SLM as provided in Schedule XIV. (ii) Depreciation on other Fixed Assets is provided at the rates specified in Schedule XIV to the Companies Act, 1956 on Straight Line Method.

(b) Depreciation on Fixed Assets for trial run period is not charged.

8) Prior year Adjustments

Earlier year items, adjustment/Claims, arisen / settled / noted during the year are debited / credited to the respective heads of account being not material in the nature.

9) Borrowing Costs

Borrowing costs attributable to the acquisition or construction of Fixed Assets are capitalized as part of the cost of such assets for the period prior to commencement of commercial production or installation. All other costs are charged to revenue.

10) Government Grants, Subsidy & incentives

(a) Interest subsidy received or receivable on Term Loans taken under TUF Scheme is recognized on accrual basis and reduced from the Financial Expenses. The TUF benefits attributable to the acquisition/installation of Fixed Assets till the commencement of commercial production are netted against the cost of fixed assets.

(b) Duty Drawback, Sales Tax refunds and other incentives are reduced from the cost of respective assets/ purchases.

11) Foreign Currency Transactions

Foreign currency transactions are recorded at the rates of exchange prevailing on the dates of the respective transactions. Foreign currency assets and liabilities covered by forward contracts are stated at the forward contract rates while those not covered by forward contracts are restated at rates ruling at the year end. Exchange rate differences are dealt with in the Profit and Loss account except those relating to the acquisition of fixed assets, which are adjusted to the cost of the assets.

12) Financial Derivatives

Foreign Currency Derivative contracts are accounted for on the date of their settlement and realized gain/ loss in respect of settled contracts are recognized in the Profit and Loss Account, except where they relate to borrowings attributable to the acquisition of fixed assets, in that case they are adjusted to the carrying cost of the assets.

13) CENVAT

(a) The purchase cost of raw materials and other expenses has been considered net of CENVAT available on inputs.

(b) The CENVAT benefits attributable to acquisition/installation of fixed assets are netted off against the cost of fixed assets in accordance with the Guidance Note issued by the Institute of Chartered Accountants of India.

14) Excise Duty

Excise Duty is accounted for on the basis of payments made in respect of goods cleared and provision is made for goods lying in Stock and the same is treated as part of the cost of respective Stock

15) Research & Development

Revenue expenditure on Research and Development is charged against the profit of the year in which it is incurred. Capital expenditure on research and development is shown as addition to fixed assets.

16) Retirement Benefits

The company's contribution to Provident and other funds are charged to Profit & Loss Account. The liability for gratuity is provided on the basis of actuarial valuation and leave encashment liability on actual basis.

17) Provision for Current and Deferred Tax

a) Provision for Current Income Tax is made after considering exemptions and deductions available under the Income Tax Act,1961.

b) Deferred Tax Liability resulting from timing differences between book and tax profit is accounted for by using the tax rates and laws that are enacted or substantially enacted as on Balance Sheet date. The deferred tax assets is recognized and carried forward only to extent that there is a reasonable certainty that the assets will be realized in future.

18) Impairment of Assets

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

19) Deferred Revenue Expenditure

The Company does not recognize any Deferred Revenue Expenditure.

20) Provisions and Contingencies

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past event and it is probable that there will be an outflow of resources. Provisions except in respect of employee benefits are not discounted to its present value and are determined based on best estimate of the expenditure required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimate. A contingent liability is disclosed unless the possibility of an out flow of resources embodying economic benefit is remote. Contingent assets are neither recognized nor disclosed in the financial statements.

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Mar 31, 2010

1) Basis for preparation of Financial Statement

(a) The financial statements have been prepared under the historical cost convention and on the principles of going concern in accordance with Generally Accepted Accounting Principles, applicable Accounting Standards and provisions of the Companies Act, 1956.

(b) Accounting policies, not specifically referred to, are consistent with Generally Accepted Accounting Principles.

2) Use of Estimates

The presentation of financial statements, in conformity with the generally accepted accounting principles, requires estimates and assumptions 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 results and estimates are recognized in the period in which the results are known / materialized.

3) Revenue Recognition :

(a) Sales are recognised when goods are supplied and effective control of goods associated with ownership is transferred to the buyer. Sales are recorded net of Sales Tax, return, discounts and rebates but including Excise Duties and exchange fluctuations. Sale of surplus Power is also recognized as sales.

(b) Other Income and Incentives/Benefits are accounted for on accrual basis.

(c) Claims lodged with insurance companies are accounted and credited to the relevant head when recognized by the insurance company.

(d) Inter-divislonal sales comprising of sale of power for captive use is reduced from gross turnover in arriving net turnover.

4) Expenditure

(a) Expenses are accounted for on accrual basis and provisions are made for all known losses and liabilities.

(b) Rebate, claims & settlement on goods sold are accounted for as and when these are ascertained with reasonable accuracy.

5) Inventory

Inventories are valued at cost or net realisable value, whichever is lower. The cost in respect of various items of inventory is computed as under :-

(a) Cost of raw materials and stores include duties, taxes, freight and other expenses and are net of Duty Drawback, VAT & CST refund, CENVAT credit wherever made applicable. The cost is determined on FIFO basis.

(b) Cost in relation to finished goods comprises of cost of materials, excise duty, production overheads and depreciation.

(c) Work in process, at raw material cost plus conversion cost depending upon the stage of completion.

(d) The material/finished goods despatched from the factory but lying at port pending shipment are taken as a part of finished goods stock.

6) Investments

(a) Investments are stated at cost.

(b) Dividend income is accounted when the right to receive is established.

7) Fixed Assets

Fixed Assets are stated at cost net of CENVAT/VAT credit availed and includes amounts added on revaluation, less accumulated depreciation and impairment loss, if any. All costs, including financing cost till commencement of commercial production, net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the fixed assets are capitalized.

8) Depreciation

(a) (i) Depreciation on Plant & Machinery, Electric Installations, 10.50 MW Thermal Power Plant and 7.67 MW F.O. Power Plant is provided on the rates applicable to Continuous Process Plant - Straight Line Method as provided in Schedule XTV to the Companies Act, 1956. (ii) Depreciation on other Fixed Assets is provided at the rates specified in Schedule XIV to the Companies Act, 1956 on Straight Line Method.

(b) Depreciation on Fixed Assets for trial run period has not been charged.

9) Prior year Adjustments

Earlier year items, adjustment/Claims, arisen / settled / noted during the year are debited / credited to the respective heads of account being not material in the nature.

10) Borrowing Costs

Borrowing costs attributable to the acquisition or construction of Fixed Assets are capitalized as part of the cost of such assets for the period prior to commencement of commercial production or installation. All other costs are charged to revenue.

11) Government Grants, Subsidy & incentives

(a) Interest subsidy received or receivable on Term Loans taken under TUF Scheme is recognized on accrual basis and reduced from the Financial Expenses. The TUF benefits attributable to the acquisition/installation of Fixed Assets till the commencement of commercial production are netted against the cost of fixed assets.

(b) Duty Drawback, Sales Tax refunds and other incentives are reduced from the cost of respective assets/ purchases.

12) Foreign Currency Transactions

Foreign currency assets and liabilities covered by forward contracts are stated at the forward contract rates while those not covered by forward contracts are restated at rates ruling at the year end. Exchange rate differences are dealt with in the Profit and Loss account except those relating to the acquisition of fixed assets, which are adjusted to the cost of the assets.

13) Financial derivatives

Foreign Currency Derivative contracts are accounted on the date of their settlement and realized gain/loss in respect of settled contracts are recognized in the Profit and Loss Account, except where they relate to borrowings attributable to the acquisition of fixed assets, in that case they are adjusted to the carrying cost of the assets.

14) CENVAT / Duty Drawback

(a) The purchase cost of raw materials and other expenses has been considered net of CENVAT available on inputs.

(b) The CENVAT benefits attributable to acquisition/installation of fixed assets are netted off against the cost of fixed assets in accordance with the Guidance Note issued by the Institute of Chartered Accountants of India.

15) Excise Duty

Excise Duty is accounted for on the basis of payments made in respect of goods cleared and provision is made for goods lying in Stock and the same is treated as part of the cost of respective Stock

16) Research & Development

Revenue expenditure on Research and Development is charged against the profit of the year in which it is incurred. Capital expenditure on research and development is shown as addition to fixed assets.

17) Retirement Benefits

The companys contribution to Provident and other funds are charged to Profit & Loss Account. The liability for gratuity is provided on the basis of actuarial valuation and leave encashment liability on actual basis.

18) Provision for Current and Deferred Tax

(a) Provision for Current Income Tax is made after considering exemptions and deductions available under the Income Tax Act, 1961.

(b) Deferred Tax Liability resulting from timing differences between book and tax profit is accounted for by using the tax rates and laws that are enacted or substantially enacted as on Balance Sheet date. The deferred tax assets is recognized and carried forward only to extent that there is a reasonable certainty that the assets will be realized in future.

19) Impairment of Assets

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

20) Deferred Revenue Expenditure

The Company does not recognize any Deferred Revenue Expenditure.

21) Provisions and Contingencies

Provision is recognized when the company has a present obligation as a result of past event. It is probable that an outflow of resources embodying economic benefit will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions except in respect of employee benefits are not discounted to its present vale and are determined based on best estimate of the expenditure required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimate. A contingent liability is disclosed unless the possibility of an out flow of resources embodying economic benefit is remote.