SIGNIFICANT ACCOUNTING POLICIES 1. Basis of brparation of Financial Statements (a) The financial statements have been brpared under the historical cost convention in accordance with the generally accepted accounting principles (GAAP) in India and the provisions of the Companies Act, 2013, as adopted consistently by the Company. (b) The Company recognises income and expenditure on accrual basis except those of significant uncertainties. 2. Fixed Assets Fixed Assets are stated at cost net of CENVAT and includes amounts added on revaluation, less accumulated debrciation. All costs, including interest on borrowings attributable to acquisition of Fixed Assets up to the date of commissioning of the assets and net charges on foreign exchange contracts and adjustments arising from exchange rate variations relating to borrowings attributable to the fixed assets are capitalised. 3. Debrciation (I) Debrciation on Fixed assets is provided on Straight Line Method ( SLM) considering specified useful / remaining useful lives of the assets as brscribed in Schedule II to the Companies Act, 2013 except in cases of Plant & Machineries relating to Tuber Plant of Lighting Division and Pipe Mills & CR Plant of Steel Division where the useful life has been assessed as 25 Years on the basis of technical evaluation. (ii) Debrciation on additions is being provided on pro rata basis from the date of such additions. (iii) Debrciation on assets sold, discarded, disabled or demolished during the year is being provided up to the date in which such assets are sold, discarded, disabled or demolished. (iv) Debrciation on additions / deductions on account of increase / decrease due to revaluation of foreign currency loan are provided based on the useful life life of the assets. 4. Foreign Currency Transactions (I) The Monetary items denominated in foreign currency are translated at the exchange rate brvailing on the last day of the accounting year where the Company has entered into forward exchange contracts, the difference between the forward rate and the exchange rate at the date of the transaction is recognised in the statement of profit & loss over the life of the contract. However the difference relating to borrowings attributable to the fixed assets are capitalised (ii) Exchange differences arising due to repayment or restatement of monetary items denominated in foreign currency are recognised in Profit & Loss Account. However the exchange difference relating to borrowings attributable to the fixed assets are capitalized. 5. Investments Investments that are readily realisable and intended to be held for not more than a year are classified as current investments. All other investments are classified as long-term investments. Current investments are carried at lower of cost and fair value. Long-term investments are carried at cost. However, provision for diminution in value is made to recognise a decline other than temporary in the value of the investments. 6. Employee Benefits I. Contribution to the provident fund with the government at br-determined rates is a defined contribution scheme and is charged to the Profit and Loss account. There are no other obligations other than contribution to PF Schemes. ii. Liabilities in respect of defined benefit plan of Gratuity is determined as per actuarial valuations made by an independent actuary as at the balance sheet date. The actuarial gains or losses are recognised immediately in the profit and loss account. The contributions made by the Company through approved gratuity trust time to time are invested with Life Insurance Corporation of India and SBI Life Insurance Company Limited. iii. Provisions for other long term employee benefits-leave, a defined benefit scheme, is made on the basis of actuarial valuation at the end of each financial year and are charged to the profit and loss account . All actuarial gains or losses are recognised immediately in the profit and loss account. 7. Use of Estimates The brparation of financial statements in conformity with generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities as at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Any revision to accounting estimates is recognised prospectively in current and future periods. 8. Inventories (i) Raw material, Stores & Spares are valued at cost on FIFO basis. (ii) Finished Goods are valued at cost or net realisable value whichever is lower. (iii) Work in Progress are valued at cost or net realisable value whichever is lower. (iv) Scrap and Salvage is valued at realisable value. (v) Excise duty is included in value of finished goods. 9. Revenue Recognition Sale of goods are recognised where significant risk and reward in goods is passed to customers. In case of export, sale are recognised on the basis of shipping bills date and initially recorded at the relevant exchange rates brvailing on the date of transaction. 10. Taxation Income-Tax is accounted for in accordance with the Accounting Standard 22 "Accounting for taxes on income". Taxes comprise both current and deferred tax. The provision for the current tax is made considering the liability estimated to arise on the results for the year in accordance with Income-Tax Act, 1961. The deferred tax for timing differences between the book and tax profits for the year is accounted for using the tax rates and laws that have been enacted or substantively enacted as of the balance sheet date. Deferred tax assets arising from timing differences are recognised to the extent there is reasonable certainty that the assets can be realised in future. Deferred tax assets are reviewed at each balance sheet date for its realisability. 7. Use of Estimates The brparation of financial statements in conformity with generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities as at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Any revision to accounting estimates is recognised prospectively in current and future periods. 8. Inventories (i) Raw material, Stores & Spares are valued at cost on FIFO basis. (ii) Finished Goods are valued at cost or net realisable value whichever is lower. (iii) Work in Progress are valued at cost or net realisable value whichever is lower. (iv) Scrap and Salvage is valued at realisable value. (v) Excise duty is included in value of finished goods. 9. Revenue Recognition Sale of goods are recognised where significant risk and reward in goods is passed to customers. In case of export, sale are recognised on the basis of shipping bills date and initially recorded at the relevant exchange rates brvailing on the date of transaction. 10. Taxation Income-Tax is accounted for in accordance with the Accounting Standard 22 "Accounting for taxes on income". Taxes comprise both current and deferred tax. The provision for the current tax is made considering the liability estimated to arise on the results for the year in accordance with Income-Tax Act, 1961. The deferred tax for timing differences between the book and tax profits for the year is accounted for using the tax rates and laws that have been enacted or substantively enacted as of the balance sheet date. Deferred tax assets arising from timing differences are recognised to the extent there is reasonable certainty that the assets can be realised in future. Deferred tax assets are reviewed at each balance sheet date for its realisability. |