SIGNIFICANT ACCOUNTING POLICIES a) Accounts are maintained on accrual basis. Claims/Refunds not ascertainable with reasonable certainty are accounted for on settlement basis. b) Cash flows are reported using the indirect method. c) Fixed Assets are stated at cost adjusted by revaluation of certain assets. d) Expenditure during construction/erection period is included under Capital Work-in-Progress and allocated to the respective fixed assets on completion of construction/erection. e) i) Foreign currency transactions are recorded at exchange rates brvailing on the date of transaction. Monetary assets and liabilities in foreign currencies as at the Balance Sheet date are translated at exchange rate brvailing at the year end. Premium or discount in respect of forward contracts covered under AS 11 (revised 2003) is recognized over the life of contract. Exchange differences arising on actual payments / realizations and year end translations including on forward contracts are dealt with in Statement of Profit and Loss. The foreign exchange loss/gain on reporting of long-term foreign currency monetary items and forward contracts, held as on reporting date to be used for, or actually used for repayment of loan taken for debrciable assets, are capitalized. Non Monetary Foreign Currency items are stated at cost. ii) In accordance with Announcement issued by the Institute of Chartered Accountants of India all outstanding derivatives except covered under AS 11 (revised 2003) are marked to market on Balance Sheet date and loss, if any, is recognized in Statement of Profit & Loss and pins are ignored. f) Long term investments are stated at cost Provision for diminution in the value of long term investments is made only if such a decline is other than temporary in the opinion of the management The current investments are stated at lower of cost and quoted / fair value computed category-wise. When investment is made in partly convertible debentures with a view to retain only the convertible portion of the debentures, the excess of the face value of the non-convertible portion over the realisation on sale of such portion is treated as a part of the cost of acquisition of the convertible portion of the debenture. Income in respect of securities with long-term maturities is accounted for as per contractual obligation. g) Inventories are valued at the lower of cost and net realisable value (except scrap/waste which are valued at net realisable value). The cost is computed on weighted average basis. Finished Goods and Process Stock include cost of conversion and other costs incurred in bringing the inventories to their brsent location and condition. h) i) Revenue from operation is recognized when significant risk and reward of ownership is passed on to the customer. ii) Interest Income is recognized on time proportion basis. iii) Dividend Income on investment is accounted for when the right to receive the payment is established. iv) Export incentives, Duty drawbacks and other benefits are recognized in the Statement of Profit and Loss. Project subsidy is credited to Capital Reserve. v) Renewable Energy Certificate (REC) benefits are recognised in Statement of Profit & Loss on receipt of certificate from the relevant authority. i) Revenue expenditure on Research and Development is changed to Statement of Profit and Loss in the year in which it is incurred and capital expenditure is added to Fixed Assets. j) Borrowing cost is chatted to Statement of Profit and Loss except cost of borrowing for acquisition of qualifying assets which is capitalised till the date of commercial use of the asset. The ancillary costs incurred in connection with the arrangement of borrowings are amortised over the life of underlying borrowings. k) i) Debrciation on Buildings, Plant & Machinery, Railway Siding and Other Assets of all Units is provided as per straight line method over their useful lives as brscribed under Schedule II of Companies Act, 2013. Debrciation on additions due to exchange rate fluctuation is provided on the basis of residual life of the assets. Debrciation on assets costing up to Rs. S000/~ and on Temporary Sheds is provided in foil during the year of additions. Intangible Assets are amortised over their respective individual estimated useful lives on Straight Line Method. ii) Debrciation on the increased amount of assets due to revaluation is computed on the basis of the residual life of the assets as estimated by the valuers on straight-line method. iii) Leasehold Land is being amortised over the lease period. I) An asset is treated as impaired when the carrying cost of assets exceeds its recoverable amount. An impairment loss is charged to the Statement of Profit and Loss when an asset is identified as impaired. Reversal of impairment loss recognised in prior periods is recorded when there is an indication that the impairment losses recognised for the assets no longer exist or have decreased. Post impairment, debrciation is provided on the revised carrying value of the asset over its remaining useful life. m) Employee Benefits: i) Defined Contribution Plan Employee benefit in the form of Superannuation Fund is considered as defined contribution plan and changed to the Statement of Profit and Loss in the year when the contribution to the respective fund is due. ii) Defined Benefit Plan Retirement benefits in the form of Gratuity is considered as defined benefit obligation and provided for on the basis of an actuarial valuation, using the projected unit credit method, as at the date of Balance Sheet The Provident Fund Contribution is made to trust administered by the trustees. The interest rate to the members of the trust shall not be lower than the statutory rate declared by the Central Government under Employees' Provident Fund and Miscellaneous Provision Act, 1952. Shortfall, if any, shall be made good by the Company. iii) Other long-term benefits Long term compensated absences are provided for on the basis of an actuarial valuation, using the projected unit credit method, as at the date of Balance Sheet. Actuarial gain/losses, if any, are immediately recognized in the Statement of Profit and Loss. n) Lease rentals in respect of assets taken on Operating/Finance lease are accounted for in reference to lease terms. o) Expenditure incurred against which benefit is expected to flow into future periods, are treated as Deferred Revenue Expenditure and charged to Revenue Account over the expected duration of benefit Share issue expense is charged to Securities Premium Reserve in the year of issue. ECA Premium on loans is to be amortised over the tenure of loan. p) Intangible Assets are being recognised if the future economic benefits attributable to the asset are expected to flow to the company and the cost of the asset can be measured reliably. The same are being amortised over the expected duration of benefits. q) Current tax is the amount of tax payable on the estimated taxable income for the current year as per the provisions of Income Tax Act 1961. Deferred tax assets and liabilities are recognised in respect of current year and prospective years. Deferred Tax Assets are recognised on the basis of reasonable certainty / virtual certainty as the case may be, that sufficient future taxable income will be available against which the same can be realised. r) Provisions involving substantial degree of estimation in measurement are recognised when there is a brsent obligation as a result of past events and tt is probable that there will be an outflow of resources. Contingent liabilities are not recognised but are disclosed in the notes. s) Premium on redemption of brference shares is accounted for in the year of redemption 2 Debrciation has been provided in accordance with Part C, 5chedule II of the Companies Act, 2013 w.e.f. 1st April, 2014. Consequently the Debrciation and amortization expenses for the year are lower by Rs.37.02 Crore. 3. Current year's figures include impact of Scheme of Arrangement, hence brvious year figures are not comparable Previous year's figures have been re-grouped/re-arranged wherever necessary, As per our report of even date FOR S. S. KOTHARI MEHTA & CO. Chartered Accountants Firm Reg. No. 000756N ICS. MEHTA Partner Membership No. 008883 V. KUMARASWAMY Chief Finance Officer S.C. GUPTA Company Secretary For and on behalf of the Board B.H. SINGHANIA Chairman H.P. SINGHANIA Wee Chairman & Monaging Director O.P. GOYAL Whole Time Director UDAYAN BOSE Director |
