A. Significant Accounting Policies
1. Accounts are maintained on accrual basis. Claims/Refunds not
ascertainable with reasonable certainly are accounted for on settlement
2. Fixed Assets are stated at cost.
3. Expenditure during construction/erection period is included in
Capital Work-in-Progress and is allocated to the respective fixed
assets on commencement of Commercial Production.
4. Depreciation on Fixed Assets in use is provided on Straight Line
Method as per the rates specified in Schedule XIV of the Companies Act
1956. No depreciation is provided on Fixed Assets if not in use.
Leasehold land is amortised over the period of lease. Software is
amortised over a period of five years.
5. Inventories are valued at the lower of cost and 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 present location and condition.
6. Retirement benefits are accounted on accrual basis.
7. Duty drawback and other export benefits on Revenue account are
recognised in the Profit & Loss account and on Capital Account are
reduced from Gross Value of Fixed Assets. Project subsidy is credited
to Capital Reserve.
8. Expenditure incurred against which benefit is expected to flow into
future periods are treated as Deferred Revenue Expenditure and charged
to revenue accounts over expected duration of benefit.
9. Long-term investments are stated at cost.
10. Foreign currencies outstanding are converted to Rupees at the
Exchange rate prevailing at the year-end or at forward contracted
rates. Exchange difference in respect of fixed assets is adjusted to
the carrying cost of fixed assets and in respect of others is charged
to Profit and Loss Account.
11. Borrowing cost is charged to profit & loss account except for
acquisition of qualifying assets, which is capitalised till the date of
commercial use of the asset.
12. 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 accordance
with AS 22. Deferred Tax Asset is recognised on the basis of
reasonable/virtual certainty that sufficient future taxable income will
be available against which the same can be realised.