Accounting Policies of Websol Energy Systems Ltd. Company

Mar 31, 2018

Note 1. : Significant accounting policies

1.1 Statement of Compliance with Ind AS

These financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013. The financial statements have also been prepared in accordance with the relevant presentation requirements of the Companies Act, 2013. The Company adopted Ind AS from 1st April, 2017. Up to the year ended 31st March, 2017, the Company prepared its financial statements in accordance with the requirements of previous Generally Accepted Accounting Principles (GAAP), which includes Standards notified under the Companies (Accounting Standards) Rules, 2006. These are the Company’s first Ind AS financial statements. The date of transition to Ind AS is 1st April, 2016. Details of the exceptions and optional exemptions availed by the Company and principal adjustments along with related reconciliations are detailed in Note 37(13) (First-time Adoption).

2.2 Basis of preparation

The financial statements are prepared in accordance with the historical cost convention, except for certain items that are measured at fair values, as explained in the accounting policies. Historical cost is generally based on the fair value of the consideration in exchange for goods and services.

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, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date.

All amount disclosed in the financial statements including notes thereon have been rounded off to the nearest rupees in lakh as per the requirement of Schedule III to the Act, unless stated otherwise.

2.3 Use of estimates

The preparation of financial statements in conformity with Ind AS requires management to make judgements, estimates and assumptions that affect the application of the accounting policies and the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the year. Actual results could differ from those estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period; they are recognized in the period of the revision and future periods if the revision affects both current and future periods.

2.4 Operating Cycle

All assets and liabilities have been classified as current or non-current as per the Company’s normal operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013 and Ind AS 1 - Presentation of Financial Statements. The Company’s normal operating cycle in respect of operations relating to manufacturing Solar photo-Voltaic Cells and Modules can be considered as 12 months.

2.5 Property, plant and equipment (PPE) and Depreciation

a) Property, plant and equipment are stated at cost of acquisition less accumulated depreciation and impairment, if any. For this purpose, cost includes deemed cost which represents the carrying value of PPE recognized as at 1st April, 2016 measured as per the previous GAAP.

b) Cost is inclusive of inward freight, non-refundable taxes and duties and directly attributable costs of bringing an asset to the location and condition of its intended use. All upgradation / enhancements are charged off as revenue expenditure unless they bring similar significant additional benefits.

The cost and related accumulated depreciation are derecognized from the financial statements upon sale or retirement of the asset and the resultant gains or losses are recognized in the Statement of Profit and Loss.

c) Depreciation of these assets commences when the assets are ready for their intended use. Depreciation on items of PPE is provided on a Straight Line Method (''SLM’) basis to allocate their cost, net of their residual value over the estimated useful life of the respective asset as specified in Schedule II to the Companies Act, 2013.

The estimated useful lives, residual values and method of depreciation are reviewed at each Balance sheet date and changes, if any, are treated as changes in accounting estimate.

2.6 Impairment of Assets

Property, plant and equipment are evaluated for recoverability whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. An impairment loss is recognized for the amount by which the carrying amount of the asset exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use.

If at the balance sheet date there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the impairment loss previously recognized is reversed such that the asset is recognized at its recoverable amount but not exceeding written down value which would have been reported if the impairment loss had not been recognized.

2.7 Inventories

Inventories are valued at lower of cost and net realisable value after providing for obsolescence, if any.

Cost of inventory comprises of purchase price, cost of conversion and other directly attributable costs that have been incurred in bringing the inventories to their respective present location and condition. Borrowing costs are not included in the value of inventories.

The cost of inventories is computed on weighted average basis. Inventories are written down on a case-by-case basis if the anticipated net realizable value declines below the carrying amount of inventories. Such write downs are recognized in the Statement of profit and loss."

Net realizable value is the estimated selling price in the ordinary course of business less estimated cost of completion and estimated costs necessary to make the sale.

2.8 Revenue recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.

a) Sale of goods

Revenue is recognized at the time of transfer of substantial risk and rewards of ownership to the buyer for a consideration.

b) Interest income

Interest income is recorded on accrual basis using the effective interest rate (EIR) method.

c) All other incomes are accounted for on accrual basis.

2.9 Provisions, contingent liabilities and contingent assets

a) Provisions are recognized only when there is a present obligation, as a result of past events and when a reliable estimate of the amount of obligation can be made at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates. Provisions are discounted to their present values, where the time value of money is material.

b) Contingent liability is disclosed for possible obligations which will be confirmed only by future events not wholly within the control of the Company or present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made.

c) Contingent assets are neither recognized nor disclosed except when the realisation of income is virtually certain, related asset is disclosed.

d) Provisions, contingent liabilities and contingent assets are reviewed at each balance sheet date.

2.10 Employee benefits

a) Short-term employee benefits

Short-term employee benefits in respect of salaries and wages, including non-monetary benefits, are recognized as an expense at the undiscounted amount in the Statement of Profit and Loss for the year in which the related service is rendered.

b) Provident fund

Company’s Contributions to Provident are charged to the Statement of Profit and Loss in the year when the contributions to the respective funds are due.

c) Gratuty

Gratuity is provided on accrual basis.

2.11 Investments in equity instruments of Joint venture

Investment in an overseas joint venture is carried at cost. Cost is the carrying amount under the previous GAAP as at the transition date i.e. 1st April, 2016.

2.12 Financial instruments, Financial assets, Financial liabilities and Equity instruments

Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the relevant instrument and 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 measured at fair value through profit or loss) are added to or deducted from the fair value on initial recognition of financial assets or financial liabilities.

i) Financial Assets

(a) Recognition

Financial assets include Trade receivables, Advances, Security Deposits, Cash and cash equivalents, Bank balances etc. Such assets are initially recognized at transaction price when the Company becomes a party to contractual obligations. The transaction price includes transaction costs unless the asset is being fair valued through the Statement of Profit and Loss.

(b) Classification

Management determines the classification of an asset at initial recognition depending on the purpose for which the assets were acquired. The subsequent measurement of financial assets depends on such classification.

Financial assets are classified as those measured at:

(1) amortised cost, where the financial assets are held solely for the collection of cash flows arising from payments of principal and/ or interest.

(2) fair value through other comprehensive income (FVTOCI), where the financial assets are held not only for the collection of cash flows arising from payments of principal and interest but also from the sale of such assets. Such assets are subsequently measured at fair value, with unrealised gains and losses arising from changes in the fair value being recognized in other comprehensive income.

(3) fair value through profit or loss (FVTPL), where the assets do not meet the criteria for categorization as at amortized cost or as FVTOCI. Such assets are subsequently measured at fair value, with unrealised gains and losses arising from changes in the fair value being recognized in the Statement of Profit and Loss in the period in which they arise.

Trade receivables, Advances, Security Deposits, Cash and cash equivalents, Bank balances etc. are classified for measurement at amortised cost while investments may fall under any of the aforesaid classes. However, in respect of particular investments in equity instruments that would otherwise be measured at fair value through profit or loss, an irrevocable election at initial recognition may be made to present subsequent changes in fair value through other comprehensive income.

(c) Impairment

The Company assesses at each reporting date whether a financial asset (or a group of financial assets) such as investments, trade receivables, advances and security deposits held at amortised cost and financial assets that are measured at fair value through other comprehensive income are tested for impairment based on evidence or information that is available without undue cost or effort. Expected credit losses are assessed and loss allowances recognized if the credit quality of the financial asset has deteriorated significantly since initial recognition.

(d) Reclassification

When and only when the business model is changed, the Company shall reclassify all affected financial assets prospectively from the reclassification date as subsequently measured at amortised cost, fair value through other comprehensive income, fair value through profit or loss without restating the previously recognized gains, losses or interest and in terms of the reclassification principles laid down in the Ind AS relating to Financial Instruments.

(e) De-recognition

Financial assets are derecognized when the right to receive cash flows from the assets has expired, or has been transferred, and the Company has transferred substantially all of the risks and rewards of ownership. If the asset is one that is measured at:

(i) amortised cost, the gain or loss is recognized in the Statement of Profit and Loss;

(ii) fair value through other comprehensive income, the cumulative fair value adjustments previously taken to reserves are reclassified to the Statement of Profit and Loss unless the asset represents an equity investment in which case the cumulative fair value adjustments previously taken to reserves is reclassified within equity.

ii) Financial liabilities

Borrowings, trade payables and other financial liabilities are initially recognized at the value of the respective contractual obligations. They are subsequently measured at amortised cost.

Financial liabilities are derecognized when the liability is extinguished, that is, when the contractual obligation is discharged, cancelled and on expiry.

iii) Equity instruments

Equity instruments are recognized at the value of the proceeds, net of direct costs of the capital issue.

iv) Offsetting of financial instruments

Financial assets and liabilities are offset and the net amount is included in the Balance Sheet where there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously.

v) Dividend distribution

Dividends paid (including income tax thereon) is recognized in the period in which the interim dividends are approved by the Board of Directors, or in respect of the final dividend when approved by shareholders.

vi) Fair value measurement

Fair value is a market-based measurement, not an entity-specific measurement. Under Ind AS, fair valuation of financial instruments is guided by Ind AS 113 "Fair Value Measurement" (Ind AS - 113).

For some assets and liabilities, observable market transactions or market information might be available. For other assets and liabilities, observable market transactions and market information might not be available. However, the objective of a fair value measurement in both cases is the same-to estimate the price at which an orderly transaction to sell the asset or to transfer the liability would take place between market participants at the measurement date under current market conditions.

In determining the fair value of financial instruments, the Company uses a variety of methods and assumptions that are based on market conditions and risks existing at each balance sheet date.

The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

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

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

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

2.13 Taxes

Taxes on income comprises of current taxes and deferred taxes. Current tax in the Statement of Profit and Loss is provided as the amount of tax payable in respect of taxable income for the period using tax rates and tax laws enacted during the period, together with any adjustment to tax payable in respect of previous years.

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities and the amounts used for taxation purposes (tax base), at the tax rates and tax laws enacted or substantively enacted by the end of the reporting period.

Deferred tax assets are recognized for deductible temporary differences, the carry forward of unused tax credits and any unused tax losses to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carry forward of unused tax credits and unused tax losses can be utilized.

The carrying amount of deferred tax assets is reviewed at each balance sheet 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 assets to be utilized.

Income tax, in so far as it relates to items disclosed under other comprehensive income or equity, are disclosed separately under other comprehensive income or equity, as applicable.

2.14 Earnings per Share

a) Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting attributable taxes) by the weighted-average number of equity shares outstanding during the period.

b) For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted-average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

The number of equity shares and potential dilutive equity shares are adjusted retrospectively for all periods presented for any share split and bonus shares issues including for changes effected prior to the approval of the financial statements by the Board of Directors,

2.15 Operating Segment

The Company is engaged in production of Solar photo-voltaic Cells and Modules. Based on its internal organisation and management structure, the Company operates in only one business segment i.e. manufacturing of Solar Photo-Voltaic Cells and Modules and in only one geographic segment i.e. India. Accordingly, there are no separate reportable segments.

2.16 Foreign Currency Transactions

The functional and presentation currency of the Company is Indian Rupee.

Transactions in foreign currency are accounted for at the exchange rate prevailing on the transaction date. Gains/ losses arising on settlement as also on the translation of monetary items are recognized in the Statement of Profit and Loss.

2.17 Cash Flow Statement

Cash flows are reported using the indirect method, whereby profit/loss 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 flows. The cash flows from operating, investing and financing activities of the Company are segregated.

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Mar 31, 2016

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) The financial statements of the company have been prepared under the historical cost convention. Items of income and expenditure are recognized on accrual basis unless otherwise stated.

(b) Fixed Assets are stated at cost less depreciation (Depreciating asset over its useful life prescribed as per schedule II to the Companies Act 2013 on a pro-rata basis). However management is of the view that the remaining useful life of plant and machinery is lesser than the period for it is depreciated currently. This is the reason management has decided to increase the rate of depreciation thereby decreasing the useful life of these assets.

(c) i) Raw materials, Stores & Spares and Trading goods are valued at cost determined on the weighted average method or market price whichever is lower.

ii) Work-in-process is valued at cost inclusive of appropriate production overheads.

iii) Finished goods are valued at Cost or Market Price whichever is lower.

(d) Transactions in Foreign currencies to the extent not covered by forward contracts are accounted for at exchange rates prevailing on the dates on which the transactions took place. Losses and gains arising from subsequent fluctuations are recognized as and when they are crystallized. Foreign Currency Loans, Creditors and Debtors are stated at exchange rates prevailing on the date of the Balance Sheet. Since Company is in process of restructuring its FCCB liability for which RBI approval is pending on the date of this report company has not provided any exchange fluctuation on the balance sheet date. It should be noted that shareholders have given their approval for the restructuring in the EGM held on 26th May, 2016.

(e) The diminution in carrying amount of investment which are considered temporary are not provided for in the books.

(f) Sales are net of returns. The consumption of Raw Materials and Stores & Spares are net of sale thereof, if any.

(g) Purchases are net of rebates and discounts including those in respect of purchases made in earlier years.

(h) The foreign exchange gain / loss on Sales, Purchases, Debtors, Creditors, Foreign Currency Term Loans and External Commercial Borrowings have been shown as exceptional item in the Statement of Profit and Loss.

(i) In respect of retirement benefits in the form of Provident Fund, the contribution payable by the Company for the year is charged to revenue.

(j) Liability for future payment of Gratuity to employees is covered by Group Gratuity Scheme of Life Insurance Corporation of India. The amount paid/payable to them is charged to revenue as and when demand is raised.

(k) Payment to employees in respect of encashment of leave is accounted for as and when claimed by the employee concerned and paid by the Company.

(l) No provision is made in books of account for future liability, being unascertainable, that may occur on account of warranty on company''s products .

(m) Fixed Assets are reviewed at each Balance Sheet date for impairment. In case, events and circumstances indicate any impairment, recoverable amount of fixed assets is determined. An impairment loss is recognized, wherever the carrying amount of assets either belonging to cash generating unit or otherwise exceeds recoverable amount. The recoverable amount is the greater of net selling price of assets or its value in use. In assessing the value in use, the estimated future cash flow from the use of assets is discounted to their present value at appropriate rate. An impairment loss is reversed if there has been change in the recoverable amount and such loss no longer exists or has decreased. Impairment loss/ reversal thereof is adjusted to the carrying value of the respective assets, which in case of cash generating unit, are allocated to assets on a pro-rata basis.

(n) Borrowing cost incurred in relation to the acquisition or construction of assets are capitalized / allocated as part of the cost of such assets till the date of completion of such assets. Other borrowing costs are charged as an expense in the year in which these are incurred.

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Mar 31, 2015

(a) The financial statements of the company have been prepared under the historical cost convention. Items of income and expenditure are recognized on accrual basis unless otherwise stated.

(b) Fixed Assets are stated at cost less depreciation (Depreciating asset over its useful life prescribed as per schedule II to the Companies Act 2013 on a pro-rata basis).

(c) i) Raw materials, Stores & Spares and Trading goods are valued at cost determined on the weighted average method or market price whichever is lower.

ii) Work-in-process is valued at cost inclusive of appropriate production overheads. iii) Finished goods are valued at Cost or Market Price whichever is lower.

(d) Transactions in Foreign currencies to the extent not covered by forward contracts are accounted for at exchange rates prevailing on the dates on which the transactions took place. Losses and gains arising from subsequent fl uctuations are recognized as and when they are crystallized. Foreign Currency Loans, Creditors and Debtors are stated at exchange rates prevailing on the date of the Balance Sheet.

(e) The diminution in carrying amount of investment which are considered temporary are not provided for in the books.

(f) Sales are net of returns. The consumption of Raw Materials and Stores & Spares are net of sale thereof, if any.

(g) Purchases are net of rebates and discounts including those in respect of purchases made in earlier years.

(h) The foreign exchange gain / loss on Sales, Purchases, Debtors, Creditors, Foreign Currency Term Loans, External Commercial Borrowings and Foreign Currency Convertible Bonds have been shown as exceptional item in the Statement of Profi t and Loss.

(i) In respect of retirement benefi ts in the form of Provident Fund, the contribution payable by the Company for the year is charged to revenue.

(j) Liability for future payment of Gratuity to employees is covered by Group Gratuity Scheme of Life Insurance Corporation of India. The amount paid/payable to them is charged to revenue as and when demand is raised.

(k) Payment to employees in respect of encashment of leave is accounted for as and when claimed by the employee concerned and paid by the Company.

(l) No provision is made in books of account for future liability, being unascertainable, that may occur on account of warranty on company's products [Please refer Note No. 31(b) also]

(m) Fixed Assets are reviewed at each Balance Sheet date for impairment. In case, events and circumstances indicate any impairment, recoverable amount of fi xed assets is determined. An impairment loss is recognized, wherever the carrying amount of assets either belonging to cash generating unit or otherwise exceeds recoverable amount. The recoverable amount is the greater of net selling price of assets or its value in use. In assessing the value in use, the estimated future cash fl ow from the use of assets is discounted to their present value at appropriate rate. An impairment loss is reversed if there has been change in the recoverable amount and such loss no longer exists or has decreased. Impairment loss/ reversal thereof is adjusted to the carrying value of the respective assets, which in case of cash generating unit, are allocated to assets on a pro-rata basis.

(n) Borrowing cost incurred in relation to the acquisition or construction of assets are capitalized / allocated as part of the cost of such assets till the date of completion of such assets. Other borrowing costs are charged as an expense in the year in which these are incurred.

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Mar 31, 2014

(a) The financial statements of the company have been prepared under the historical cost convention. Items of income and expenditure are recognized on accrual basis unless otherwise stated.

(b) Fixed Assets are stated at cost less depreciation (on Straight Line Method at applicable rates prescribed in Schedule XIV of the Companies Act, 1956, on a pro-rata basis).

(c) i) Raw materials, Stores & Spares and Trading goods are valued at cost determined on the weighted average method or market price whichever is lower.

ii) Work-in-process is valued at cost inclusive of appropriate production overheads.

iii) Finished goods are valued at Cost or Market Price whichever is lower.

(d) Transactions in Foreign currencies to the extent not covered by forward contracts are accounted for at exchange rates prevailing on the dates on which the transactions took place. Losses and gains arising from subsequent fluctuations are recognized as and when they are crystallized. Foreign Currency Loans, Creditors and Debtors are stated at exchange rates prevailing on the date of the Balance Sheet.

(e) The diminution in carrying amount of investment which are considered temporary are not provided for in the books.

(f) Sales are net of returns. The consumption of Raw Materials and Stores & Spares are net of sale thereof, if any.

(g) Purchases are net of rebates and discounts including those in respect of purchases made in earlier years.

(h) The foreign exchange gain / loss on Sales, Purchases, Debtors, Creditors, Foreign Currency Term Loans, External Commercial Borrowings and Foreign Currency Convertible Bonds have been shown as exceptional item in the Statement of Profit and Loss.

(i) In respect of retirement benefits in the form of Provident Fund, the contribution payable by the Company for the year is charged to revenue.

(j) Liability for future payment of Gratuity to employees is covered by Group Gratuity Scheme of Life Insurance Corporation of India. The amount paid/payable to them is charged to revenue as and when demand is raised.

(k) Payment to employees in respect of encashment of leave is accounted for as and when claimed by the employee concerned and paid by the Company.

(l) No provision is made in books of account for future liability, being unascertainable, that may occur on account of warranty on company''s products [Please refer Note No. 31(b) also]

(m) Fixed Assets are reviewed at each Balance Sheet date for impairment. In case, events and circumstances indicate any impairment, recoverable amount of fixed assets is determined. An impairment loss is recognized, wherever the carrying amount of assets either belonging to cash generating unit or otherwise exceeds recoverable amount. The recoverable amount is the greater of net selling price of assets or its value in use. In assessing the value in use, the estimated future cash flow from the use of assets is discounted to their present value at appropriate rate. An impairment loss is reversed if there has been change in the recoverable amount and such loss no longer exists or has decreased. Impairment loss/ reversal thereof is adjusted to the carrying value of the respective assets, which in case of cash generating unit, are allocated to assets on a pro-rata basis.

(n) Borrowing cost incurred in relation to the acquisition or construction of assets are capitalized / allocated as part of the cost of such assets till the date of completion of such assets. Other borrowing costs are charged as an expense in the year in which these are incurred.

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Mar 31, 2013

(a) The financial statements of the company have been prepared under the historical cost convention. Items of income and expenditure are recognised on accrual basis unless otherwise stated.

(b) Fixed Assets are stated at cost less depreciation (on Straight Line Method at applicable rates prescribed in Schedule XIV of the Companies Act, 1956, on a pro-rata basis).

(c) i) Raw materials, Stores & Spares and Trading goods are valued at cost determined on the weighted average method or market price whichever is lower.

ii) Work-in-process is valued at cost inclusive of appropriate production overheads.

iii) Finished goods are valued at Cost or Market Price whichever is lower.

(d) Transactions in Foreign currencies to the extent not covered by forward contracts are accounted for at exchange rates prevailing on the dates on which the transactions took place. Losses and gains arising from subsequent fluctuations are recognised as and when they are crystallised. Foreign Currency Loans & Creditors and corresponding fixed assets and purchases are stated at exchange rates prevailing on the date of the Balance Sheet.

(e) The diminution in carrying amount of investment which are considered temporary are not provided for in the books.

(f) Sales are net of returns. The consumption of Raw Materials and Stores & Spares are net of sale thereof, if any.

(g) Purchases are net of rebates and discounts including those in respect of purchases made in earlier years.

(h) The foreign exchange gain / loss on Sales, Purchases, Debtors, Creditors, Foreign Currency Term Loans, External Commercial Borrowings, Foreign Currency Convertible Bonds, Capex FLC, Buyer''s Credit and Supplier''s Credit have been shown as exceptional item in the Statement of

Profit and Loss. (i) In respect of retirement benefits in the form of Provident Fund, the contribution payable by the Company for the year is charged to revenue.

(j) Liability for future payment of Gratuity to employees is covered by Group gratuity scheme of Life Insurance Corporation of India. The amount paid/payable to them is charged to revenue as and when demand is raised. The provision for the period from 01st July 2012 to 31st March 2013 has been made on an estimated basis pending the actuarial valuation certificate.

(k) Payment to employees in respect of encashment of leave is accounted for as and when claimed by the employee concerned and paid by the Company.

(l) No provision is made in books of account for future liability, being unascertainable, that may occur on account of warranty on company''s products [Please refer Note No. 31(c) also]

(m) Fixed Assets are reviewed at each Balance Sheet date for impairment. In case, events and circumstances indicate any impairment, recoverable amount of fixed assets is determined. An impairment loss is recognized, wherever the carrying amount of assets either belonging to cash generating unit or otherwise exceeds recoverable amount. The recoverable amount is the greater of net selling price of assets or its value in use. In assessing the value in use, the estimated future cash flow from the use of assets is discounted to their present value at appropriate rate. An impairment loss is reversed if there has been change in the recoverable amount and such loss no longer exists or has decreased. Impairment loss/ reversal thereof is adjusted to the carrying value of the respective assets, which in case of cash generating unit, are allocated to assets on a pro-rata basis.

(n) Borrowing cost incurred in relation to the acquisition or construction of assets are capitalized / allocated as part of the cost of such assets till the date of completion of such assets. Other borrowing costs are charged as an expense in the year in which these are incurred.

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Jun 30, 2012

(a) The financial statements of the company have been prepared under the historical cost convention. Items of income and expenditure are recognised on accrual basis unless otherwise stated.

(b) Fixed Assets are stated at cost less depreciation (on Straight Line Method at applicable rates prescribed in Schedule XIV of the Companies Act, 1956, on a pro-rata basis).

(c) i) Raw materials, Stores & Spares and Trading goods are valued at cost determined on the weighted average method or market price whichever is lower.

ii) Work-in-process is valued at cost inclusive of appropriate production overheads.

iii) Finished goods are valued at Cost or Market Price whichever is lower.

(d) Transactions in Foreign currencies to the extent not covered by forward contracts are accounted for at exchange rates prevailing on the dates on which the transactions took place. Losses and gains arising from subsequent fluctuations are recognised as and when they are crystallised. Foreign Currency Loans & Creditors and corresponding fixed assets and purchases are stated at exchange rates prevailing on the date of the Balance Sheet.

(e) The diminution in carrying amount of investment which are considered temporary are not provided for in the books.

(f) Sales are net of returns and are inclusive of sale of Raw Materials, stores & spares and impact of foreign exchange gain/loss if any. Accordingly, consumption of Raw Materials and Stores & Spares also includes the sale thereof, if any.

(g) Purchases are net of rebates and discounts including those in respect of purchases made in earlier years and impact of foreign exchange gain / loss, if any.

(h) The foreign exchange gain / loss on Foreign Currency Term Loans, External Commercial Borrowings, Foreign Currency Convertible Bonds, Capex FLC, Buyer's Credit and Supplier's Credit have been shown as exceptional items in the Statement of Profit and Loss.

(i) In respect of retirement benefits in the form of Provident Fund, the contribution payable by the Company for the year is charged to revenue.

(j) Liability for future payment of Gratuity to employees is covered by Group gratuity scheme of Life Insurance Corporation of India. The amount paid/payable to them is charged to revenue as and when demand is raised. The Company has obtained an actuarial valuation certificate for the total amount of gratuity to be provided till 30th June 2011. The provision for the period from 01st July 2011 to 30th June 2012 has been made on an estimated basis pending the actuarial valuation certificate.

(k) Payment to employees in respect of encashment of leave is accounted for as and when claimed by the employee concerned and paid by the Company.

(l) No provision is made in books of account for future liability, being unascertainable, that may occur on account of warranty on company's products [Please refer Note No. 28(d) also]

(m) Fixed Assets are reviewed at each Balance Sheet date for impairment. In case, events and circumstances indicate any impairment, recoverable amount of fixed assets is determined. An impairment loss is recognised, wherever the carrying amount of assets either belonging to cash generating unit or otherwise exceeds recoverable amount. The recoverable amount is the greater of net selling price of assets or its value in use. In assessing the value in use, the estimated future cash flow from the use of assets is discounted to their present value at appropriate rate. An impairment loss is reversed if there has been change in the recoverable amount and such loss no longer exists or has decreased. Impairment loss/ reversal thereof is adjusted to the carrying value of the respective assets, which in case of cash generating unit, are allocated to assets on a pro- rata basis.

(n) Borrowing cost incurred in relation to the acquisition or construction of assets are capitalised / allocated as part of the cost of such assets till the date of completion of such assets. Other borrowing costs are charged as an expense in the year in which these are incurred.

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Mar 31, 2011

A) The financial statements of the company have been prepared under the historical cost convention. Items of income and expenditure are recognised on accrual basis unless otherwise stated.

b) Fixed Assets are stated at cost less depreciation (on Straight Line Value Method at applicable rates prescribed in Schedule XIV of the Companies Act, 1956, on a pro-rata basis).

c) i) Raw materials, Stores & Spares and Trading goods are valued at cost determined on the weighted average method.

ii) Work-in-process is valued at cost inclusive of appropriate production overheads.

iii) Finished goods are valued at Cost or Market Price whichever is lower.

d) Transactions in Foreign currencies to the extent not covered by forward contracts are accounted for at exchange rates prevailing on the dates on which the transactions took place. Losses and gains arising from subseguent fluctuations are recognised as and when they are crystallised. Foreign Currency Loans & Creditors and corresponding fixed assets and purchases are stated at exchange rates prevailing on the date of the Balance Sheet.

e) Sales are net of returns and are inclusive of sale of Raw Materials and stores & spares, if any. Accordingly, consumption of Raw Materials and Stores & Spares also includes the sale thereof, if any.

f) Purchases are net of rebates and discounts including those in respect of purchases made in earlier years.

g) In respect of retirement benefits in the form of Provident Fund, the contribution payable by the Company for the year is charged to revenue.

h) Liability for future payment of Gratuity to employees is covered by Group gratuity scheme of Life Insurance Corporation of India. The amount paid/payable to them is charged to revenue as and when demand is raised.

i) Payment to employees in respect of encashment of leave is accounted for as and when claimed by the employee concerned and paid by the Company.

j) No provision is made in books of account for future liability, being unascertainable, that may occur on account of warranty on company's products [Please refer Note No. 3(d) also]

k) Fixed Assets are reviewed at each Balance Sheet date for impairment. In case, events and circumstances indicate any impairment, recoverable amount of fixed assets is determined. An impairment loss is recognized, wherever the carrying amount of assets either belonging to cash generating unit or otherwise exceeds recoverable amount. The recoverable amount is the greater of net selling price of assets or its value in use. In assessing the value in use, the estimated future cash flow from the use of assets is discounted to their present value at appropriate rate. An impairment loss is reversed if there has been change in the recoverable amount and such loss no longer exists or has decreased. Impairment loss/ reversal thereof is adjusted to the carrying value of the respective assets, which in case of cash generating unit, are allocated to assets on a pro- rata basis.

l) Borrowing cost incurred in relation to the acguisition or construction of assets are capitalized / allocated as part of the cost of such assets till the date of completion of such assets. Other borrowing costs are charged as an expense in the year in which these are incurred.

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Jun 30, 2010

A) The financial statements of the have been prepared under the historical cost convention. Items of income and expenditure are recognised on accrual basis unless otherwise stated.

b) Fixed Assets are stated at cost less depreciation (on Straight Line Value Method at applicable rates prescribed in Schedule XIV of the Companies Act, 1956, on a pro-rata basis).

c) i) Raw materials, Stores & Spares and Trading goods are valued at cost determined on the weighted average method. ii) Work-in-process is valued at cost inclusive of appropriate production overheads.

iii) Finished goods are valued at Cost or Market Price whichever is lower.

d) Transactions in Foreign currencies to the extent not covered by forward contracts are accounted for at exchange rates prevailing on the dates on which the transactions took place. Losses and gains arising from subsequent fluctuations are recognised as and when they are crystallised. Foreign Currency Loans & Creditors and corresponding fixed assets and purchases are stated at exchange rates prevailing on the date of the Balance Sheet.

e) Sales are net of returns and are inclusive of sale of Raw Materials and stores & spares. Accordingly, consumption of Raw Materials and Stores & Spares also includes the sale thereof.

f) Purchases are net of rebates and discounts including those in respect of purchases made in earlier years.

g) In respect of retirement benefits in the form of Provident Fund, the contribution payable by the Company for the year is charged to revenue.

h) Liability for future payment of Gratuity to employees is covered by Group gratuity scheme of Life Insurance Corporation of India. The amount paid/payable to them is charged to revenue as and when demand is raised.

i) Payment to employees in respect of encashment of leave is accounted for as and when claimed by the employee concerned and paid by the Company.

j) No provision is made in books of account for future liability, being unascertainable, that may occur on account of warranty on companys products [Please refer Note No. 3(d) also]

k) Fixed Assets are reviewed at each Balance Sheet date for impairment. In case, events and circumstances indicate any impairment, recoverable amount of fixed assets is determined. An impairment loss is recognized, wherever the carrying amount of assets either belonging to cash generating unit or otherwise exceeds recoverable amount. The recoverable amount is the greater of net selling price of assets or its value in use. In assessing the value in use, the estimated future cash flow from the use of assets is discounted to their present value at appropriate rate. An impairment loss is reversed if there has been change in the recoverable amount and such loss no longer exists or has decreased. Impairment loss/ reversal thereof is adjusted to the carrying value of the respective assets, which in case of CGU, are allocated to assets on a pro-rata basis.

l) Borrowing cost incurred in relation to the acquisition or construction of assets are capitalized / allocated as part of the cost of such assets till the date of completion of such assets. Other borrowing cost are charged as an expense in the year in which these are incurred.