| 1.1 Basis of Accounting:
The Financial statements have been prepared on accrual basis, except
wherever otherwise stated, under the historical cost convention, in
accordance with the accounting principles generally accepted in India
and compiled with the accounting standards referred to in the Company's
Accounting Standards Rules 2006, issued by the Central Government in
exercise of the powers conferred under subsection (i)(a) of Section 642
and the relevant provisions of the Companies Act, 1956.
1.2 Use of Estimates
The preparation of financial statements in conformity with the
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and the disclosures of contingent liabilities on the
date of financial statements. Actual results could differ from those
estimates. Any revision to accounting estimates is recognized
prospectively in the current and future periods.
1.3 Inventory
Inventories are valued at lower of the cost or net realizable value.
For this purpose cost includes direct material duties and taxes.
1.4 Revenue Recognition
All expenses and revenue are accounted for on accrual basis except
wherever stated otherwise.
1.5 Fixed Assets and Depreciation:
Fixed Assets are stated at cost of acquisition / construction less
accumulated depreciation and impairment loss. Cost includes related
expenditure and Pre-operative and Project expenses for the period up to
completion of construction / assets are put to use.
Depreciation on Fixed Assets is provided on Written Down Value Method
at the rates and in the manner prescribed in Schedule XIV to the
Companies Act, 1956.
1.6 Borrowing Costs
Borrowing costs attributable to the acquisition / construction of a
qualifying asset are capitalized as part of the cost of such assets, up
to the date the assets are ready for their intended use. Other
borrowing costs are recognised as an expense in the period in which
they are incurred.
1.7 Investments
All long term investments are stated at cost, less any diminution in
the value, if any, other than temporary.
1.8 Taxation
i) Current tax is determined as the amount of tax payable in respect of
taxable incomes for the year based on applicable tax rates and
provisions.
ii) Deferred tax is recognised on timing differences, being the
difference between taxable incomes and accounting income that originate
in one period and are capable of reversal on one or more subsequent
periods and is measured using tax rates that have been enacted or
substantively enacted as on the Balance Sheet date. Where there is
unabsorbed depreciation or carry forward losses, deferred tax assets
are recognised only if there is virtual certainty of realisation of
such assets. Other deferred tax assets are recoginsed only to the
extent there is reasonable certainty of realization in future. Deferred
tax assets/ liabilities are reviewed on yearly basis to reassess their
realization or otherwise.
1.9 Impairment of Assets
The Company identifies Impairable assets based on cash generated unit
concept at the year end in terms of paragraphs - 5 to 13 of Accounting
Standard - 28 for the purpose of arriving at impairment
loss thereon, if any, being the difference between the book value and
recoverable value of relevant assets. An impairment loss is recognized
wherever the carrying amount of an asset exceeds its recoverable
amount. Impairment loss when crystallizes is charged against revenue of
the year.
1.10 Contingent Liabilities
Disputed liabilities and claims against the Company including claims
raised by various revenue authorities (e.g. Sales Tax, Income Tax,
etc.), pending in appeal/court for which no reliable estimate can be
made of the amount of the obligation or which are remotely poised for
crystallization are not provided for in accounts but disclosed in Notes
on Accounts.
However, present obligation as a result of past event with possibility
of outflow of resources, when reliably estimable, is recognized in
accounts.
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