Accounting Policies of Oswal Overseas Ltd. Company

Mar 31, 2024

2.3 Summary of Significant Accounting Policies:

2.3.1 Property, Plant & Equipment (PPE):

Property, Plant and equipment including capital work in progress are stated at cost, less accumulated
depreciation and accumulated impairment losses, if any. The cost comprises of purchase price, taxes,
duties, freight and other incidental expenses, directly attributable and related to acquisition and
installation of the concerned assets and is further adjusted by the amount of GST credit availed wherever
applicable. Cost includes borrowing cost for long term construction projects if recognition criteria are met.
When significant parts of plant and equipment are required to be replaced at intervals, the Company
depreciates them separately based on their respective useful lives. Likewise, when a major inspection is
performed, its cost is recognized in the carrying amount of the plant and equipment as a replacement if
the recognition criteria are satisfied. All other repair and maintenance costs are recognized in profit or
loss as incurred.

An item of property, plant and equipment and any significant part initially recognized is derecognized
upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or
loss arising on derecognized of the asset (calculated as the difference between the net disposal proceeds
and the carrying amount of the asset) is included in the income statement when the asset is
derecognized.

The Company identifies and determines cost of each component/ part of the asset separately, if the
component/ part has a cost which is significant to the total cost of the asset and has useful life that is
materially different from that of the remaining asset.

Investment properties are properties held to earn rentals or for capital appreciation or both. Investment
properties are measured initially at their cost of acquisition, including transaction costs.

Capital work- in- progress includes cost of property, plant and equipment under installation / under
development as at the balance sheet date.

The residual values, useful lives and methods of depreciation of property, plant and equipment are
reviewed at each financial year end and adjusted prospectively, if appropriate.

In respect of others assets, depreciation is calculated on a straight-line basis using the rates arrived at
based on the useful lives estimated by the management and in the manner prescribed in Schedule II of
the Companies Act 2013. The useful life is as follows:

2.3.2 Current v/s Non-Current Classification:

The Company presents assets and liabilities in the Balance Sheet based on current/ non-current
classification. An asset is treated as current when it is:

> Expected to be realized or intended to be sold or consumed in normal operating cycle;

> Held primarily for the purpose of trading;

> Expected to be realized within twelve months after the reporting period, or

> Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least
twelve months after the reporting period

All other assets are classified as non-current.

A liability is current when:

> It is expected to be settled in normal operating cycle;

> It is held primarily for the purpose of trading;

> It is due to be settled within twelve months after the reporting period, or

> There is no unconditional right to defer the settlement of the liability for at least twelve months after the
reporting period.

The Company classifies all other liabilities as non-current.

Deferred tax assets and liabilities are classified as non-current assets or liabilities.

The operating cycle is the time between the acquisition of assets for processing and their realization in
cash and cash equivalents. The Company has identified twelve months as its operating cycle.

2.3.3 Taxes:

2.3.3.1 Current Income Tax:

Current income tax assets and liabilities are measured at the amount expected to be recovered from or
paid to the taxation authorities in accordance with the Income Tax Act, 1961 (as amended) and Income
Computation and Disclosure Standards (ICDS) enacted in India by using the tax rates and tax laws that
are enacted or substantively enacted, at the reporting date in India where the Company operates and
generates taxable income.

Current income tax relating to items recognized outside profit or loss is recognized outside profit or loss
(either in other comprehensive income or in equity). Current tax items are recognized in correlation to the
underlying transaction either in OCI or directly in equity. Management periodically evaluates positions
taken in the tax returns with respect to situations in which applicable tax regulations are subject to
interpretation and establishes provisions where appropriate.

2.3.3.2 Deferred Tax:

Deferred tax is provided using the liability method on temporary differences between the tax bases of
assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.
Deferred tax liabilities are recognized for all taxable temporary differences, except:

> When the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a
transaction that is not a business combination and, at the time of the transaction, affects neither the
accounting profit nontaxable profit or loss;

Deferred tax assets (including MAT credit, if any) are recognized for all deductible temporary differences,
the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognized 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, except:

> When the deferred tax asset relating to the deductible temporary difference arises from the initial
recognition of an asset or liability in a transaction that is not a business combination and, at the time of
the transaction, affects neither the accounting profit nor taxable profit or loss

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent
that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred
tax asset to be utilized. Unrecognized deferred tax assets are re-assessed at each reporting date and are
recognized to the extent that it has become probable that future taxable profits will allow the deferred tax
asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year
when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been
enacted or substantively enacted at the reporting date.

Deferred tax relating to items recognized outside profit or loss is recognized outside profit or loss (either
in other comprehensive income or in equity). Deferred tax items are recognized in correlation to the
underlying transaction either in OCI or directly in equity.

Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off
current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity
and the same taxation authority.

Deferred tax including Minimum Alternate Tax (MAT) recognizes MAT credit available as an asset only to
the extent that there is convincing evidence that the Company will pay normal income tax during specified
period, i.e. the period for which MAT credit is allowed to be carried forward. The Company reviews the
"MAT credit entitlement" asset at each reporting

date and writes down the asset to the extent the Company does not have convincing evidence that it will
pay normal tax during the specified period.

Goods & Service Tax (GST) paid on acquisition of assets or on incurring expenses:

• Expenses and assets are recognized net of the amount of GST/sales/ value added taxes paid, except:

• When the tax incurred on a purchase of assets or services is not recoverable from the taxation
authority, in which case, the tax paid is recognized as part of the cost of acquisition of the asset or as part
of the expense item, as applicable

When receivables and payables are stated with the amount of tax included

The net amount of tax recoverable from, or payable to, the taxation authority is included as part of other
current assets or other current liabilities in the balance sheet.

2.3.4 Inventory

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

Costs incurred in bringing each product to its present location and condition is accounted for as follows:

> Raw materials/ Stores and Spares: Cost includes cost of purchase and other costs incurred in
bringing the inventories to their present location and condition. Cost of Spares is determined on first in,
first out basis.

> Finished goods and Work in Progress: Cost includes cost of direct materials and labored a
proportion of manufacturing overheads based on the normal operating capacity, but excluding borrowing
costs. Cost is determined on first in, first out basis.

> By-Products: Cost of By- Products includes costs incurred in bringing these products to their present
location and condition. Cost is determined on first in, first out basis.

Net realizable 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.

2.3.5 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:

The Company classified its financial assets in the following measurement categories:

> Those to be measured subsequently at fair value (either through other comprehensive income or
through profit & loss)

> Those measured at amortized cost
Initial recognition and measurement:

All financial assets are recognized initially at fair value plus, in the case of financial assets not recorded at
fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial
asset. Purchases or sales of financial assets that require delivery of assets within a time frame
established by regulation or convention in the market place (regular way trades) are recognized on the
trade date, i.e., the date that the Company commits to purchase or sell the asset.

Subsequent measurement:

For purposes of subsequent measurement, financial assets are classified in following categories:

> Debt instruments at amortized cost

A ''debt instrument'' is measured at the amortized cost if both the following conditions are met:

i. Business model test: The asset is held within a business model whose objective is to hold assets for
collecting contractual cash flows (rather than to sell the instrument prior to its contractual maturity to
released its fair value change), and

ii. Cash flow characteristics test: Contractual terms of the asset give rise on specified dates to cash
flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.

This category is the most relevant to the Company. After initial measurement, such financial assets are
subsequently measured at amortized cost using the effective interest rate (EIR) method. Amortized cost is
calculated by taking into account any discount or premium on acquisition and fees or costs that are an
integral part of the EIR. 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 gross carrying
amount of financial assets. When calculating the effective interest rate the Company estimates the
expected cash flow by considering all contractual terms of the financial instruments. The EIR
amortization is included in finance income in the profit or loss. The losses arising from impairment are
recognized in the profit or loss. This category generally applies to trade and other receivables.

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

FVTPL is a residual category for financial instruments. Any financial instrument, which does not meet the
criteria for amortized cost or FVTOCI, is classified as at FVTPL. A gain or loss on a Debt instrument that
is subsequently measured at FVTPL and is not a part of a hedging relationship is recognized in statement
of profit or loss and presented net in the statement of profit and loss within other gains or losses in the
period in which it arises. Interest income from these Debt instruments is included in other income.

Derecognition:

A financial asset (or, where applicable, a part of a financial asset or part of a Company of similar financial
assets) is primarily derecognized (i.e., removed from the Company''s statement of financial position)
when:

1. the rights to receive cash flows from the asset have expired, or

2. the Company has transferred its rights to receive cash flows from the asset or has assumed an
obligation to pay the received cash flows in full without material delay to a third party under a "pass
through" arrangement and either;

a. the Company has transferred the rights to receive cash flows from the financial assets or

b. The Company has retained the contractual right to receive the cash flows of the financial asset, but
assumes a contractual obligation to pay the cash flows to one or more recipients.

Where the Company has transferred an asset, the Company evaluates whether it has transferred
substantially all the risks and rewards of the ownership of the financial assets. In such cases, the financial
asset is derecognized. Where the entity has not transferred substantially all the risks and rewards of the
ownership of the financial assets, the financial asset is not derecognized.

Where the Company has neither transferred a financial asset nor retains substantially all risks and
rewards of ownership of the financial asset, the financial asset is derecognized if the Company has not
retained control of the financial asset. Where the Company retains control of the financial asset, the asset
is continued to be recognized to the extent of continuing involvement in the financial asset.

Impairment of financial assets:

In accordance with IND AS 109, the Company applies expected credit losses (ECL) model for
measurement and recognition of impairment loss on the following financial asset and credit risk exposure

Financial assets measured at amortized cost e.g. Loans, security deposits, trade receivable, bank
balance.

The Company follows “simplified approach” for recognition of impairment loss allowance on trade
receivables. Under the simplified approach, the Company does not track changes in credit risk. Rather, it
recognizes impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial
recognition. The Company uses a provision matrix to determine impairment loss allowance on the
portfolio of trade receivables. The provision matrix is based on its historically observed default rates over
the expected life of trade receivable and is adjusted for forward looking estimates. At every reporting
date, the historical observed default rates are updated and changes in the forward-looking estimates are
analyzed.

For recognition of impairment loss on other financial assets and risk exposure, the Company determines
whether there has been a significant increase in the credit risk since initial recognition. If credit risk has
not increased significantly, 12-month ECL is used to provide for impairment loss. However, if credit risk
has increased significantly, lifetime ECL is used. If, in subsequent period, credit quality of the instrument
improves such that there is no longer a significant increase in credit risk since initial recognition, then the
Company reverts to recognizing impairment loss allowance based on 12- months ECL.

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

Reclassification of financial assets:

The Company determines classification of financial assets and liabilities on initial recognition. After initial
recognition, no reclassification is made for financial assets which are equity instruments and financial
liabilities. For financial assets which are debt instruments, a reclassification is made only if there is a
change in the business model for managing those assets. Changes to the business model are expected
to be infrequent. The Company''s senior management determines change in the business model as a
result of external or internal changes which are significant to the Company''s operations. Such changes
are evident to external parties. A change in the business model occurs when the Company either begins
or ceases to perform an activity that is significant to its operations. If the Company reclassifies financial
assets, it applies the reclassification prospectively from the reclassification date which is the first day of
the immediately next reporting period following the change in business model. The Company does not
restate any previously recognized gains, losses (including impairment gains or losses) or interest.

b. Financial Liabilities:

Initial recognition and measurement:

Financial liabilities are classified at initial recognition as financial liabilities at fair value through profit or
loss, loans and borrowings, and payables, net of directly attributable transaction costs. The Company
financial liabilities include loans and borrowings including bank overdraft, trade payable, trade deposits
and other payables.

Subsequent measurement:

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

Trade Payables:

These amounts represent liabilities for goods and services provided to the Company prior to the end of
financial year which are unpaid. The amounts are unsecured and are usually paid within 0-12 months of
recognition. Trade and other payables are presented as current liabilities unless payment is not due
within 12 months after the reporting period. They are recognized initially at fair value and subsequently
measured at amortized cost using EIR method.

Financial Liabilities at fair value through profit & loss:

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and
financial liabilities designated upon initial recognition as at fair value through profit or loss. Financial
liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near
term. Gains or losses on liabilities held for trading are recognized in the statement of profit and loss.
Financial liabilities designated upon initial recognition at fair value through profit or loss are designated as
such at the initial date of recognition, and only if the criteria in IND AS 109 are satisfied. For liabilities
designated as FVTPL, fair value gains/ losses attributable to changes in own credit risk is recognized in
OCI. These gains/losses are not subsequently transferred to profit and loss. However, the Company may
transfer the cumulative gain or loss within equity. All other changes in fair value of such liability are
recognized in the statement of profit or loss.

Loans & Borrowings:

Borrowings are initially recognized at fair value, net of transaction cost incurred. After initial recognition,
interest-bearing loans and borrowings are subsequently measured at amortized cost using the EIR
method. Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as
through the EIR amortization process. Amortized cost is calculated by taking into account any discount or
premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is
included as finance costs in the statement of profit and loss.

Derecognition:

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or
expires. When an existing financial liability is replaced by another from the same lender on substantially
different terms, or the terms of an existing liability are substantially modified, such an exchange or
medication is treated as the derecognition of the original liability and the recognition of a new liability. The
difference in the respective carrying amounts is recognized in the statement of profit and loss.

Offsetting of financial instruments:

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

2.3.6 Cash & Cash Equivalents:

Cash and cash equivalents in the balance sheet comprise cash at banks, cash on hand, other short-term
deposits with original maturities of three months or less which are subject to an insignificant risk of
changes in value.

2.3.7 Mandatorily Redeemable Preference Shares:

A mandatorily redeemable preference shares with dividends paid at the issuer''s discretion, which
effectively comprises: a financial liability (the issuer''s obligation to redeem the shares in cash); and an
equity instrument (the holder''s right to receive dividends if declared. Such preference shares are
separated into liability and equity components based on the terms of the contract.

On issuance of the mandatorily redeemable preference shares with dividends declared at the issuer''s
discretion, the present value of the redeemable amount is calculated using a market rate for an equivalent
non-convertible instrument. This amount is classified as a financial liability measured at amortized cost
(net of transaction costs) until it is extinguished on redemption. The unwinding of the discount on this
component is recognized in profit or loss and classified as interest expense.

The remainder of the proceeds is recognized and included in equity as per Ind AS 32. Transaction costs
are deducted from equity, net of associated income tax. The carrying amount of the equity component is
not premeasured in subsequent years.

Transaction costs are apportioned between the liability and equity components of such preference shares
based on the allocation of proceeds to the liability and equity components when the instruments are
initially recognized.

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Mar 31, 2014

1. Basis of Accounting

The company maintains its accounts on accrual basis following the historical cost conventions in accordance with generally accepted Accounting principles (GAAP) and in compliance with the Accounting Standards referred to in section 211(3C) and other requirements of the Companies Act 1956. The preparation of the financial statements in conformity with GAAP requires that the management of the company makes estimates and assumptions that affect the reported amounts of income and expenses of the period, the reported balances of assets and liabilities and the disclosures relating to contingent liabilities as of the date of the financial statements. Examples of such estimates include the useful life of fixed assets and intangible assets, provisions for doubtful debts/advances, future obligations in respect of retirement benefit plans, etc. Actual results could differ from these estimates.

2. Revenue Recognition

Revenue is recognized based on the nature of activity when consideration can be reasonably measured and there exists reasonable certainty of its recovery.

(a) Revenue from sale of goods is recognized when the substantial risks and rewards of ownership are transferred to the buyer under the terms of the contract.

(b) Other income is accounted for on accrual basis as and when the right to receive arises.

3. Inventories Valuation

Inventories except by-products are valued at lower of cost or net realisable value. By-Products are valued at net realisable value. For valuation of finished goods, appropriate overheads are considered. Closing Stock is inclusive of Excise duty. Store inventory is valued at weighted average cost method.

4. Fixed Assets

The fixed assets are stated at cost net of Excise Duty, less accumulated depreciation and impairment loss if any. All costs directly related to the acquisition and installation of fixed assets are capitalised and added to the respective assets. Borrowing Costs relating to acquisition of fixed assets which takes substantial period of time to get ready for its intended use are also included to the extent they relate to the period till such assets are ready to put to use. Fixed assets and stores are booked net of Excise Duty to avail the benefit of CENVAT. Un-availed CENVAT is shown under the head "CENVAT Recoverable" under Loans and Advances.

5. Depreciation

Depreciation is provided on all the fixed assets on Straight Line Method basis in accordance with and in the manner specified in Schedule XIV of the Companies Act, 1956.

6. Foreign Currency Transactions

Transactions denominated in foreign currency are normally recorded at the exchange rates prevailing at the time of the transactions. Monetary items denominated in foreign currencies at the year end are translated at the year end exchange rates. Any income or expenses on account of exchange difference either on settlement or on translation is recognized in the Statement of Profit & Loss Account.

7. Expenditure on new projects & substantial expansions

Expenditure directly relating to construction/substantial expansion activity is capitalized. Indirect expenditure incurred during construction period is capitalized as part of the indirect construction cost to the extent to which the expenditure is indirectly related to construction or is incidental thereto. Income earned for during construction period is deducted from the total of the indirect expenditure.

As regards indirect expenditure on expansion, only that portion is capitalized which represents the marginal increase in such expenditure involved as a result of capital expansion. Both direct and indirect expenditure are capitalized only if they increase the value of the asset beyond its original standard of performance.

8. Impairment of Assets

At each balance sheet date, the carrying amounts of fixed assets are reviewed by the management to determine whether there is any indication that those assets suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of impairment loss (recoverable amount is the higher of an assets net selling price or value in use). In assessing the value in use, the estimated future cash flows expected from the continuing use of the assets and from its disposal are discounted to their present value using a pre discounted rate that reflects the current market assessment of time value of money and risks specific to the asset.

Reversal of impairment loss is recognized immediately as income in the profit and Loss account

9. Government Grants and Subsidies

Grants and subsidies from the government are recognized when there is reasonable assurance that the grant/subsidy will be received and all attaching conditions will be complied with.

When grant or subsidy relates to an expense item, it is recognized as income over the periods necessary to match them on a systematic basis with the related cost, which it is intended to compensate. Where grant/subsidy relates to an asset, its value is deducted in arriving at the carrying amount of the related asset against which grant/subsidy has been received and further where the grant/subsidy is in the nature of promoters contribution the amount of grant/subsidy is accounted for as a capital reserve.

10. Investments

Investments that are readily realizable and intended to be held for less then one year are classified as current investments, Current investments are carried at lower of cost or market value, whereas long term investments are carried at historical cost. The provision for diminution in the value of investment other than temporary is provided for.

11. Miscellaneous Expenditure

Preliminary expenses and cost incurred in raising funds are written off to the Statement of profit and loss account in the year in which the same are incurred.

12. Employees Benefits

Provision for Leave encashment liability and Provision for Gratuity is made on Actuarial valuation basis. Provident Fund: Contribution to provident fund is made in accordance with the provisions of the Employees Provident Fund Act, 1952.

13. Tax Expenses

Tax expenses comprises of current and deferred income tax and wealth tax. Current income tax is calculated at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act, 1961. Deferred income taxes reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.

14. Deferred Tax

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognized only to the extent that there is virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax assets can be realized. If the company has carry forward of unabsorbed depreciation and tax losses, deferred tax, assets are recognized only if there is virtual certainty supported by convincing evidence that such deferred tax assets can be realized against further taxable profits. Unrecognized deferred tax assets of earlier years are re-assessed and recognized to the extent that it has become reasonably certain that further taxable income will be available against which such deferred tax assets can be realized.

15. Earnings per Share

Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividend & taxes) by the weighted average number of equity shares outstanding during the year. Equity shares that are partly paid up are treated as a fraction of an equity share to the extent they entitled to participate in dividends. The weighted average numbers of equity shares outstanding during the year are adjusted for events such as bonus issue, bonus element in a right issue to the existing shareholders, share split and consolidation of shares.

For the purpose of calculating diluted EPS, the net profit or loss attributable to equity share holders and weighted average number of equity shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

16. Segment Reporting

a). Segment accounting policies are in line with the accounting policies of the company. In addition, the following specific accounting policies have been followed for segment reporting.

(1) . Segment revenue includes sales and other income directly identifiable with/allocable to the segment including inter segment sales.

(2) Expenses that are directly identifiable with/allocable to segment are considered for determining the segment result. Expenses which relate to the company as a whole and not allocable to segment are included under Un-allocable corporate expenditure.

(3) Income which relates to the company as a whole and not allocable to segments is included in un-allocable corporate income.

(4) Segment assets and liabilities include those directly identifiable with the respective segments. Un-allocable corporate assets and liabilities represent the assets and liabilities that relate to company as a whole and not allocable to any segment. Un-allocable assets mainly comprise corporate head office assets, investments and tax deposited with the Income Tax Authorities. Un-allocable liabilities include mainly Unsecured Loans and Tax Payable to Income Tax authorities.

b). Inter Segment transfer pricing

Segment revenue resulting from transactions with other business segments is accounted on the basis of market price.

17. Provisions & Contingent liabilities

A provision is recognized when an enterprise has

(1) A present obligation as a result of past events.

(2) It is probable that an outflow of resources will be required to settle the obligation.

(3) In respect of which a reliable estimate can be made.

The provisions are determined based on the best estimates required to fulfill the obligation on the balance sheet date. The provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

Contingent liability is a possible obligation that arises from past events and the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the enterprise: or a present obligation that arises from past events but is not recognized.

The Contingent liabilities are not recognized but are disclosed in the notes. The Contingent Assets are neither recognized nor disclosed in financial statements.

18. Cash and Cash equivalents

Cash and cash equivalents in the balance sheet comprise cash at bank, cash in hand & short term investments.

19. Borrowing Cost

Borrowing Costs that are attributable to the acquisition, Construction or Production of qualifying assets are capitalized as part of cost of such asset till such asset is ready for its intended use or sale. A qualifying asset is an asset that necessarily requires a substantial period of time to get ready for its intended use or sale. All other Borrowing Costs are recognized as an expense in the period in which they are incurred.

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Mar 31, 2012

1. Basis of Accounting

The company maintains its accounts on accrual basis following the historical cost conventions in accordance with generally accepted Accounting principles (GAAP) and in compliance with the Accounting Standards referred to in section 211(3C) and other requirements of the Companies Act 1956.

The preparation of the financial statements in conformity with GAAP requires that the management of the company makes estimates and assumptions that affect the reported amounts of income and expenses of the period, the reported balances of assets and liabilities and the disclosures relating to contingent liabilities as of the date of the financial statements. Examples of such estimates include the useful life of fixed assets and intangible assets, provisions for doubtful debts/advances, future obligations in respect of retirement benefit plans, etc. Actual results could differ from these estimates.

2. Revenue Recognition

Revenue is recognized based on the nature of activity when consideration can be reasonably measured and there exists reasonable certainty of its recovery.

(a) Revenue from sale of goods is recognized when the substantial risks and rewards of ownership are transferred to the buyer under the terms of the contract.

(b) Other income is accounted for on accrual basis as and when the right to receive arises.

3. Inventories Valuation

Inventories except by-products are valued at lower of cost or net realisable value. By-Products are valued at net realisable value. For valuation of finished goods, appropriate overheads are considered. Closing Stock is inclusive of Excise duty. Store inventory is valued at weighted average cost method.

4. Fixed Assets

The fixed assets are stated at cost net of Excise Duty, less accumulated depreciation and impairment loss if any. All costs directly related to the acquisition and installation of fixed assets are capitalised and added to the respective assets. Borrowing Costs relating to acquisition of fixed assets which takes substantial period of time to get ready for its intended use are also included to the extent they relate to the period till such assets are ready to put to use

5. Depreciation

Depreciation is provided on all the fixed assets on Straight Line Method basis in accordance with and in the manner specified in Schedule XIV of the Companies Act, 1956.

6. Research & Development

Revenue expenditure on research and development is charged under the respective heads of accounts. Capital expenditure on research and development is included as part of fixed assets and depreciated on the same basis as other fixed assets.

7. Expenditure on new projects & substantial expansions

Expenditure directly relating to construction/substantial expansion activity is capitalized. Indirect expenditure incurred during construction period is capitalized as part of the indirect construction cost to the extent to which the expenditure is indirectly related to construction or is incidental thereto. Income earned for during construction period is deducted from the total of the indirect expenditure.

As regards indirect expenditure on expansion, only that portion is capitalized which represents the marginal increase in such expenditure involved as a result of capital expansion. Both direct and indirect expenditure are capitalized only if they increase the value of the asset beyond its original standard of performance.

10. Cenvat Credit

Fixed assets and stores are booked net of Excise Duty to avail the benefit of CENVAT. Un- availed CENVAT is shown under the head "CENVAT Recoverable" under Loans and Advances.

11. Commercial Tax

Commercial Tax liabilities are accounted for on the basis of Commercial Tax Returns filed by the Company. Any additional liability that arises at the time of assessment is accounted for in the year of finalization of assessment.

12. Borrowing Cost

Borrowing Costs that are attributable to the acquisition, Construction or Production of qualifying assets are capitalized as part of cost of such asset till such asset is ready for its intended use or sale. A qualifying asset is an asset that necessarily requires a substantial period of time to get ready for its intended use or sale. All other Borrowing Costs are recognized as an expense in the period in which they are incurred.

13. Earnings Per Share

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividend & taxes) by the weighted average number of equity shares outstanding during the year. Equity shares that are partly paid up are treated as a fraction of an equity share to the extent they entitled to participate in dividends. The weighted average numbers of equity shares outstanding during the year are adjusted for events such as bonus issue, bonus element in a right issue to the existing shareholders, share split and consolidation of shares. For the purpose of calculating diluted EPS, the net profit or loss attributable to equity share holders and weighted average number of equity shares outstanding during the period are adjusted of all dilutive potential equity shares.

14. Taxes on Income

Tax expenses comprises of current, deferred and fringe benefit tax. Current income tax and fringe benefits tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income Tax Act 1961. Deferred income taxes reflects the impact of current year timing difference between taxable income and accounting income for the year and reversal of timing difference of earlier years.

Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient further taxable income will be available against which such deferred tax assets can be realized. If the company has carry forward of unabsorbed depreciation and tax losses, deferred tax assets are recognized only if there is virtual certainty that such deferred tax assets can be realized against further taxable profits. Unrecognized deferred tax assets of earlier years are reassessed and recognized to the extent that it has become reasonably certain that further taxable income will be available against which such deferred tax assets can be realized.

15. Segment Reporting Policy

(a) Segment accounting policies are in line with the accounting policies of the company. In addition, the following specific accounting policies have been followed for segment reporting.

(1) Segment revenue includes sales and other income directly identifiable with/allocable to the segment including inter segment sales.

(2) Expenses that are directly identifiable with/allocable to segment are considered for determining the segment result. Expenses which relate to the company as a whole and not allocable to segment are included under Unallowable corporate expenditure.

(3) Income which relates to the company as a whole and not allocable to segments is included in Unallowable corporate income.

(4) Segment assets and liabilities include those directly identifiable with the respective segments. Unallowable corporate assets and liabilities represent the assets and liabilities that relate to company as a whole and not allocable to any segment. Unallowable assets mainly comprises corporate head office assets, Land , Land & Site Development and Tax Deposited with Income Tax authorities. Unallowable liabilities includes mainly Unsecured Loans and Tax payable to Income Tax authorities.

(b) Inter Segment transfer pricing

Segment revenue resulting from transactions with other business segments is accounted on the basis of Transfer Price agreed between the segments.

16 Intangible' Assets

An intangible asset is recognized if, and only if:

(a) it is probable that the future economic benefits that are attributable to the asset will flow to the enterprise

(b) the cost of the asset can be measured reliably; An intangible asset is measured initially at cost

The depreciable amount of an intangible asset will be allocated on a systematic basis over the best estimate of its useful life.



The amortization method will be used to reflect the pattern in which the asset's economic benefits are consumed by the enterprise. If that pattern cannot be determined reliably, the straight line method will be used.

17. Impairment of Assets

At each balance sheet date, the carrying amounts of fixed assets are reviewed by the management to determine whether there is any indication that those assets suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of impairment loss (recoverable amount is the higher of an assets net selling price or value in use). In assessing the value in use, the estimated future cash flows expected from the continuing use of the assets and from its disposal are discounted to their present value using a pre discounted rate that reflects the current market assessment of time value of money and risks specific to the asset.

Reversal of impairment loss is recognized immediately as income in the profit and Loss account

18. Provisions

A provision is recognized when an enterprise has

(1) A present obligation as a result of past events.

(2) It is probable that an outflow of resources will be required to settle the obligation.

(3) In respect of which a reliable estimate can be made.

Provisions are determined based on the best estimates required to fulfill the obligation on the balance sheet date. Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

19. Cash & Cash equivalent

Cash and cash equivalent in the balance sheet comprises cash at bank, cash in hand & Short term investment

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Mar 31, 2010

The financial statements are prepared under the historical cost convention and the significant accounting policies adopted are as follows:

a) Loans and advances:

Provision is made for doubtful loans and advances. Bad debts are written off as they arise.

b) Pre-operative expenses:

All expenses related to various projects by the company are treated as pre-operative expenses till the commencement of commercial production.

c) Payables and accruals:

Liabilities are recognized for amounts to be paid for goods or services received whether or not invoiced to the company.

d) Staff end of service gratuity:

Staff end of service gratuity is accounted on cash basis.

e) Foreign currency transactions:

Transactions in foreign currencies are converted into US Dollar at the rate of exchange ruling on the date of the transaction.

Assets and liabilities expressed in foreign currencies are translated into US Dollar at the rate of exchange ruling at the balance sheet date.

Resulting exchange gains/losses are taken to the income statement.