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