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Accounting Policies of Bengal Tea and Fabrics Ltd. Company

Mar 31, 2015

A) Basis of Preparation

i) The financial statements have been prepared to comply in all materials respects with the Accounting Standards specified under Section 133 of the Companies Act, 2013 read with rule 7 of the Companies (Accounts ) Rules, 2014 (as amended) andthe relevantprovisions of the Companies Act, 2013. The financial statements have been prepared under historical cost convention on an accrual basis, other than certain fixed assets which are stated at revalued amount. Except otherwise mentioned, the accounting policies applied by the Company are consistent with those used in the previous year.

b) Revenue Recognition

i) Sale is recognised on despatch of goods to the customers.

ii) Export sales are accounted on the basis of dates of Bill of Lading.

iii) Export incentives are accounted for in the year of export.

iv) Insurance and other claims to the extent considered recoverable are accounted for in the year of claim.

v) Interest is recognized on a time of proportion basis taking into account amount oustanding and the rate applicable.

vi) Other items of Income are accounted as and when the right to receive arises.

c) Fixed Assets Tangible

(i) Leasehold Land :

Premium on leasehold land is amortised over the period oflease.

(ii) Fixed assets other than revalued are stated at cost of acquisition or construction and net of subsidy/cenvat less accumulated depreciation/amortization/impairment, if any.

(iii) Depreciation :

Tangible

Depreciation on additions/deletions for Tangible Fixed Assets are charged under Straight Line Method (SLM) according to the useful life specified in Schedule II of the Companies Act, 2013 in terms of Section 123 of the Act, on pro-rata basis.

Depreciation on Tangible Fixed Assets is being provided on Straight Line Method basis as per useful lives specified in Schedule II of the Companies Act, 2013.

In respect of revalued assets, the difference of depreciation, between Net Asset Value and revalued amount, has been charged to Revaluation Reserve.

Intangible

(i) Cost of Software is capitalised and where it is expected to provide future enduring economic benefits. Capitalisation includes license fees and cost of implementation/system integration services. The costs are capitalised in the year in which the relevant software is implemented for use. Expenses incurred on upgradation/enhancement is charged off as revenue expenditure unless they bring similar significant additional benefits.

Depreciation:

(ii) Capitalised software costs is amortised on straight line basis over a period of five years as per Accounting Standard -26 as notified by Companies (Accounts) Rules, 2014 (as amended).

d) Impairment of Fixed Assets

The carrying amount of assets are reviewed at each Balance Sheet date if there is any indication of impairment based on internal/external factors. An impairment loss will be recognised wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is greater of the asset net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to the present value by using weighted average cost of capital.

e) Government Grants

Capital Grants relating to specific assets are reduced from the gross value of the fixed assets. Other revenue grants are credited to Profit & Loss Statement or deducted from the related expenses.

f) Investments

Non-current investments are stated at costand where applicable, provision is made in case ofpermanent dimunition in value of investments. Current investments are stated at lower of cost or market value.

g) Inventories

i) Raw Materials are valued at cost or net realisable value, whichever is lower, at Textile Division and at net realisable value in Tea Division. Cost is arrived at on the basis of cost of respective lots remaining in stock and related expenses.

ii) Stores, Coal, etc. are valued at cost. Costs of stores is arrived at on F.I.F.O. basis in Textile Division except coal which is valued on monthly average basis. At Tea Division, all stores are valued on monthly average basis.

iii) Materials-in-Process is valued at cost on absorption basis or net realisable value, whichever is lower.

iv) Yarn is valued at cost on absorption basis or net realisable value whichever is lower including excise duty.

v) Cloth is valued at cost on absorption basis or net realisable value whichever is lower including excise duty.

vi) Finished Tea is valued at net realisable value.

vii) Waste is valued at estimated realisable value.

viii) Materials-in-Transit is valued at cost to date of the Balance Sheet.

ix) Land planned for development is converted into Stock-in-Trade at Fair Market Value (Cost) as at the date of conversion and is valued at lower of Fair Market Value (Cost) and Net Realisable Value at the year end.

h) Borrowing Cost

Interest and other costs in connection with the borrowing of the funds to the extent related/attributed to the acquisition/construction of qualifying fixed assets are capitalised upto the date when such assets are ready for its intended use and all other borrowing costs are recognised as an expense in period for which they are incurred, unless otherwise stated.

i) Exchange Fluctuation

Transactions denominated in foreign currency are normally recorded at the exchange rate prevailing at the time of transaction.

The foreign currency monetary items consisting of loans, trade receivables, and payable at the end of the year have been restated at the rate prevailing at the Balance Sheet date. The difference arising as a result has been accounted as income/expense as per the Accounting Standard 11 (Revised 2003) on "Accounting for the Effects of Changes in Foreign Exchange Rates."

The premium or discount arising at the inception of the forward exchange contracts is amortised as expense or income over the life of the contracts.

Realised gain or loss on cancellation of forward exchange contracts are recognized in the Statement ofProfit and Loss of the period in which they are cancelled.

Forward Contracts remaining unsettled at the Balance Sheet date are revalued at the closing rate and exchange difference arising on such revaluation is charged to the Statement ofProfit and Loss.

j) Employee Benefits

i) Defined Contribution Plans :

The Company has defined benefit contribution plans in the form of Provident Fund, Superannuation Fund, EDLI, ESIC and Labour Welfare Fund and the contributions are charged to the Profit & Loss Statement of the year when the contributions to the respective funds are due. There are no other obligations other than contribution payable to the respective funds.

ii) Defined Benefit Plans :

The Company has defined benefit plans namely Leave Encashment/Compensated Absence and Gratuity for Employees, the liability for which is determined on the basis of actuarial valuation at the end of the year. Gains and losses arising out of actuarial valuation are recognised immediately in the Profit and Loss Statement as income or expense.

iii) Other Defined Benefits :

Provision for other defined benefit for long term leave encashment is made based on an independent actuarial valuation on projected unit credit method at the end of each financial year. Actuarial gains and losses are recognised immediately in the Statement of Profit and Loss as income or expenses. Company recognises the undiscounted amount of short term employee benefits during the accounting period based on service rendered by the employee.

k) Provisions, Contingent Liabilities and Contingent Assets

Provisions involving a substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognised but are disclosed in the financial statements by way of a note. Contingent assets are neither recognised nor disclosed in the financial statements.

l) Taxes on Income

i) Current tax represents the amount computed as per prevailing taxation laws.

ii) Deferred Tax is recognised subject to consideration of prudence on timing difference being the difference between taxable incomes and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred Tax Assets have been recognized where there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised.


Mar 31, 2014

Depreciation on additions to Building, Water Supply Installation, Machineries and Electrical Installation from 1st January, 1976 for Textile Division and from 1st April, 1976 for Tea Division has been provided on Straight Line Basis, in terms of Section 205(2](b] of the Companies Act, 1956 at the rates specified in Schedule XIV to the said Act.

In respect of assets acquired/sold during the year, depreciation has been provided on pro-rata basis.

In respect of revalued assets, the difference of depreciation, between written down value and revalued amount, has been charged to Revaluation Reserve.

Intangible

(ij Cost of Software is capitalised and where it is expected to provide future enduring economic benefits. Capitalisation includes license fees and cost of implementation/system integration services. The costs are capitalised in the year in which the relevant software is implemented for use. Expenses incurred on upgradation/enhancement is charged off as revenue expenditure unless they bring similar significant additional benefits.

(iij Capitalised software costs is amortised on straight line basis over a period of five years.

d) Impairment of Fixed Assets

The carrying amount of assets are reviewed at each Balance Sheet date if there is any indication of impairment based on internal/external factors. An impairment loss will be recognised wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is greater of the asset net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to the present value by using weighted average cost of capital.

e) Government Grants

Capital Grants relating to specific assets are reduced from the gross value of the fixed assets. Other revenue grants are credited to Profit & Loss Statement or deducted from the related expenses.

f) Investments

Non-current investments are stated at costand where applicable, provision is made in case ofpermanent dimunition in value of investments. Current investments are stated at lower of cost or market value.

g) Inventories

ij Raw Materials are valued at cost or net realisable value whichever is lower, at Textile Division and at net realisable value in Tea Division. Cost is arrived at on the basis of cost of respective lots remaining in stock and related expenses. iij Stores, Coal, etc. are valued at cost. Costs of stores is arrived at on F.I.F.O. basis in Textile Division except coal which is valued on monthly average basis. At Tea Division, all stores are valued on monthly average basis. iiij Materials-in-Process is valued at cost on absorption basis or net realisable value, whichever is lower. ivj Yarn is valued at cost on absorption basis or net realisable value whichever is lower including excise duty. vj Cloth is valued at cost on absorption basis or net realisable value whichever is lower including excise duty. vij Finished Tea is valued at net realisable value. viij Waste is valued at estimated realisable value. viiij Materials-in-Transit is valued at cost to date of the Balance Sheet.

h) Borrowing Cost

ij Interest and other costs in connection with the borrowing of the funds to the extent related/attributed to the acquisition/construction of qualifying fixed assets are capitalised upto the date when such assets are ready for its intended use and all other borrowing costs are recognised as an expense in period for which they are incurred, unless otherwise stated.

iij Borrowing costs such as the premium paid in connection with the borrowings are being amortised over the period of respective borrowings in proportion with the oustanding balances.

i) Exchange Fluctuation

The foreign currency monetary items consisting of loans, trade receivables and payable at the end of the year have been restated at the rate prevailing at the Balance Sheet date. The difference arising as a result has been accounted as income/expense as per the Accounting Standard 11 (Revised 2003j on "Accounting for the Effects of Changes in Foreign Exchange Rates."

The premium or discount arising at the inception of the forward exchange contracts is amortised as expense or income over the life of the contracts.

Realised gain or loss on cancellation of forward exchange contracts are recognized in the Profit and Loss Statement of the period in which they are cancelled.

Forward Contracts remaining unsettled at the Balance Sheet date are revalued at the closing rate and exchange difference arising on such revaluation is charged to Statement ofProfit and Loss.

j) Employee Benefits

i] Defined Contribution Plans :

The Company has defined benefit contribution plans in the form of Provident Fund, Superannuation Fund, EDLI, ESIC and Labour Welfare Fund and the contributions are charged to the Profit & Loss Statement of the year when the contributions to the respective funds are due. There are no other obligations other than contribution payable to the respective funds.

ii] Defined Benefit Plans :

The Company has defined benefit plans namely Leave Encashment/Compensated Absence and Gratuity for Employees, the liability for which is determined on the basis of actuarial valuation at the end of the year. Gains and losses arising out of actuarial valuation are recognised immediately in the Profit and Loss Statement as income or expense.

iii] Other Defined Benefits :

Provision for other defined benefit for long term leave encashment is made based on an independent actuarial valuation on projected unit credit method at the end of each financial year. Actuarial gains and losses are recognised immediately in the Statement of Profit and Loss as income or expenses. Company recognises the undiscounted amount of short term employee benefits during the accounting period based on service rendered by the employee.

k) Provisions, Contingent Liabilities and Contingent Assets

Provisions involving a substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognised but are disclosed in the financial statements by way of a note. Contingent assets are neither recognised nor disclosed in the financial statements.

l) Taxes on Income

i] Current tax represents the amount computed as per prevailing taxation laws.

ii] Deferred Tax is recognised subject to consideration of prudence on timing difference being the difference between taxable incomes and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred Tax Assets have been recognized where there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised.


Mar 31, 2013

A) Basis of Preparation

i) The financial statements have been prepared to comply in all materials respects with the Accounting Standards notified by the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared under historical cost convention on an accrual basis, other than certain fixed assets which are stated at revalued amount. Except otherwise mentioned, the accounting policies applied by the Company are consistent with those used in the previous year.

b) Revenue Recognition

i) Sale is recognised on despatch of goods to the customers.

ii) Export sales are accounted on the basis of dates of Bill of Lading.

iii) Export incentives are accounted for in the year of export.

iv) Insurance and other claims to the extent considered recoverable are accounted for in the year of claim.

v) Interest is recognized on a time of proportion basis taking into account amount oustanding and the rate applicable.

vi) Other items of Income are accounted as and when the right to receive arises.

c) Fixed Assets Tangible

(i) Leasehold Land:

Premium on leasehold land is amortised over the period oflease.

(ii) Fixed assets other than revalued are stated at cost of acquisition or construction and net of subsidy/cenvat less accumulated depreciation/amortization/impairment, if any.

(iii) Depreciation:

Depreciation on additions to Building, Water Supply Installation, Machineries and Electrical Installation upto 31st December 1975 for Textile Division and upto 31st March, 1976 for Tea Division and on all other Assets is being provided on Written Down Value basis, in terms of Section 205(2)(a) of the Companies Act, 1956 at the rates specified in Schedule XIV to the said Act.

Depreciation on additions to Building, Water Supply Installation, Machineries and Electrical Installation from 1st January, 1976 for Textile Division and from 1st April, 1976 for Tea Division has been provided on Straight Line Basis, in terms of Section 205(2)(b) of the Companies Act, 1956 at the rates specified in Schedule XIV to the said Act.

In respect of assets acquired/sold during the year, depreciation has been provided on pro-rata basis.

In respect of revalued assets, the difference of depreciation, between written down value and revalued amount, has been charged to Revaluation Reserve.

Intangible

(i) Cost of Software is capitalised and where it is expected to provide future enduring economic benefits. Capitalisation includes license fees and cost of implementation/system integration services. The costs are capitalised in the year in which the relevant software is implemented for use. Expenses incurred on upgradation/enhancement is charged off as revenue expenditure unless they bring similar significant additional benefits.

(ii) Capitalised software costs is amortised on straight line basis over a period of five years.

d) Impairment of Fixed Assets

The carrying amount of assets are reviewed at each Balance Sheet date if there is any indication of impairment based on internal/external factors. An impairment loss will be recognised wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is greater of the asset net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to the present value by using weighted average cost of capital.

e) Government Grants

Capital Grants relating to specific assets are reduced from the gross value of the fixed assets. Other revenue grants are credited to Profit & Loss Statement or deducted from the related expenses.

f) Investments

Non-current investments are stated at cost and where applicable, provision is made in case of permanent dimunition in value of investments. Current investments are stated at lower of cost or market value.

g) Inventories

i) Raw Materials are valued at cost or net realisable value whichever is lower, at Textile Division and at net realisable value in Tea Division. Cost is arrived at on the basis of cost of respective lots remaining in stock and related expenses.

ii) Stores, Coal, etc. are valued at cost. Costs of stores is arrived at on F.I.F.O. basis in Textile Division except coal which is valued on monthly average basis. At Tea Division, all stores are valued on monthly average basis.

iii) Materials-in-Process is valued at cost on absorption basis or net realisable value, whichever is lower.

iv) Yarn is valued at cost on absorption basis or net realisable value whichever is lower including excise duty.

v) Cloth is valued at cost on absorption basis or net realisable value whichever is lower including excise duty.

vi) Finished Tea is valued at net realisable value.

vii) Waste is valued at estimated realisable value.

viii) Materials-in-Transit is valued at cost to date of the Balance Sheet.

h) Borrowing Cost

i) Interest and other costs in connection with the borrowing of the funds to the extent related/attributed to the acquisition/construction of qualifying fixed assets are capitalised upto the date when such assets are ready for its intended use and all other borrowing costs are recognised as an expense in period for which they are incurred, unless otherwise stated.

ii) Borrowing costs such as the premium paid in connection with the borrowings are being amortised over the period of respective borrowings in proportion with the oustanding balances.

i) Exchange Fluctuation

The foreign currency monetary items consisting of loans, trade receivables, and payable at the end of the year have been restated at the rate prevailing at the Balance Sheet date. The difference arising as a result has been accounted as income/expense as per the Accounting Standard 11 (Revised 2003) on "Accounting for the Effects of Changes in Foreign Exchange Rates."

The premium or discount arising at the inception of the forward exchange contracts is amortised as expense or income over the life of the contracts.

Realised gain or loss on cancellation of forward exchange contracts are recognized in the Profit and Loss Statement of the period in which they are cancelled.

Forward Contracts remaining unsettled at the Balance Sheet date are revalued at the closing rate and exchange difference arising on such revaluation is charged to Profit and Loss Statement.

j) Employee Benefits

i) Defined Contribution Plans :

The Company has defined benefit contribution plans in the form of Provident Fund, Superannuation Fund, EDLI, ESIC and Labour Welfare Fund and the contributions are charged to the Profit & Loss Statement of the year when the contributions to the respective funds are due. There are no other obligations other than contribution payable to the respective funds.

ii) Defined Benefit Plans :

The Company has defined benefit plans namely Leave Encashment/Compensated Absence and Gratuity for Employees, the liability for which is determined on the basis of actuarial valuation at the end of the year. Gains and losses arising out of actuarial valuation are recognised immediately in the Profit and Loss Statement as income or expense.

iii) Other Defined Benefits :

Provision for other defined benefit for long term leave encashment is made based on an independent actuarial valuation on projected unit credit method at the end of each financial year. Actuarial gains and losses are recognised immediately in the Statement of Profit and Loss as income or expenses. Company recognises the undiscounted amount of short term employee benefits during the accounting period based on service rendered by the employee.

k) Provisions, Contingent Liabilities and Contingent Assets

Provisions involving a substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognised but are disclosed in the financial statements by way of a note. Contingent assets are neither recognised nor disclosed in the financial statements.

l) Taxes on Income

i) Current tax represents the amount computed as per prevailing taxation laws.

ii) Deferred Tax is recognised subject to consideration of prudence on timing difference being the difference between taxable incomes and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred Tax Assets have been recognized where there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised.


Mar 31, 2012

A) Basis of Preparation

i) The financial statements have been prepared to comply in all materials respects with the Accounting Standards notified by the Companies(Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared under historical cost convention on an accrual basis, other than certain fixed assets which are stated at revalued amount. Except otherwise mentioned, the accounting policies applied by the Company are consistent with those used in the previous year.

b) Revenue Recognition

i) Sale is recognized on dispatch of goods to the customers.

ii) Export sales are accounted on the basis of dates of Bill of Lading.

iii) Export incentives are accounted for in the year of export.

iv) Insurance and other claims to the extent considered recoverable are accounted for in the year of claim.

v) Interest is recognized on a time of proportion basis taking into account amount outstanding and the rate applicable.

vi) Other items of Income are accounted as and when the right to receive arises.

c) Fixed Assets Tangible

(i) Leasehold Land:

Premium on leasehold land is amortized over the period of lease.

(ii) Fixed assets other than revalued are stated at cost of acquisition or construction and net of subsidy/canvas less accumulated depreciation/amortization/impairment, if any.

(iii) Depreciation

Depreciation on additions to Building, Water Supply Installation, Machineries and Electrical Installation up to 31st December 1975 for Textile Division and up to 31st March, 1976 for Tea Division and on all other Assets is being provided on Written Down Value basis, in terms of Section 205(2)(a) of the Companies Act, 1956 at the rates specified in Schedule XIV to the said Act.

Depreciation on additions to Building, Water Supply Installation, Machineries and Electrical Installation from 1st January, 1976 for Textile Division and from 1st April, 1976 for Tea Division has been provided on Straight Line Basis, in terms of Section 205(2)(b) of the Companies Act, 1956 at the rates specified in Schedule XIV to the said Act.

In respect of assets acquired/sold during the year, depreciation has been provided on pro-rata basis.

In respect of revalued assets, the difference of depreciation, between written down value and revalued amount, has been charged to Revaluation Reserve.

Intangible

(i) Cost of Software is capitalized where it is expected to provide future enduring economic benefits. Capitalization includes license fees and cost of implementation/system integration services. The costs are capitalized in the year in which the relevant software is implemented for use. Expenses incurred on up gradation/enhancement is charged off as revenue expenditure unless they bring similar significant additional benefits.

(ii) Capitalized software costs is amortized on straight line basis over a period of five years.

d) Impairment of Fixed Assets

The carrying amount of assets are reviewed at each Balance Sheet date if there is any indication of impairment based on internal/external factors. An impairment loss will be recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is greater of the asset net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to the present value by using weighted average cost of capital.

e) Government Grants

Capital Grants relating to specific assets are reduced from the gross value of the fixed assets. Other revenue grants are credited to Profit & Loss Statement or deducted from the related expenses.

f) Investments

Non-current investments are stated at cost and where applicable, provision is made in case of permanent diminution in value of investments. Current investments are stated at lower of cost or market value.

g) Inventories

i) Raw Materials are valued at cost or net realizable value whichever is lower, at Textile Division and at net realizable value in Tea Division. Cost is arrived at on the basis of cost of respective lots remaining in stock and related expenses.

ii) Stores, Coal etc. are valued at cost. Costs of stores is arrived at on F.I.F.O. basis in Textile Division except coal which is valued on monthly average basis. At Tea Division, all stores are valued on monthly average basis.

iii) Materials-in-Process is valued at cost on absorption basis or net realizable value, whichever is lower.

iv) Yarn is valued at cost on absorption basis or net realizable value whichever is lower including excise duty.

v) Cloth is valued at cost or absorption basis or net realizable value whichever is lower including excise duty.

vi) Finished Tea is valued at net realizable value.

vii) Waste is valued at estimated realizable value.

viii) Materials-in-Transit is valued at cost to date of the Balance Sheet.

h) Borrowing Cost

i) Interest and other costs in connection with the borrowing of the funds to the extent related/attributed to the acquisition/construction of qualifying fixed assets are capitalized up to the date when such assets are ready for its intended use and all other borrowing costs are recognized as an expense in period for which they are incurred, unless otherwise stated.

ii) Borrowing costs such as the premium paid in connection with the borrowings are being mortised over the period of respective borrowings in proportion with the outstanding balances.

i) Exchange Fluctuation

The foreign currency monetary items consisting of loans, trade receivables and payable at the end of the year have been restated at the rate prevailing at the Balance Sheet date. The difference arising as a result has been accounted as income/expense as per the Accounting Standard 11 (Revised 2003) on "Accounting for the Effects of Changes in Foreign Exchange Rates."

The premium or discount arising at the inception of the forward exchange contracts is mortised as expense or income over the life of the contracts.

Realized gain or loss on cancellation of forward exchange contracts are recognized in the Profit and Loss Statement of the period in which they are cancelled.

Forward Contracts remaining unsettled at the Balance Sheet date are revalued at the closing rate and exchange difference arising on such revaluation is charged to Profit and Loss Statement.

j) Employee Benefits

i) Defined Contribution Plans :

The Company has defined benefit contribution plans in the form of Provident Fund, Superannuation Fund, EDLI, ESIC and Labor Welfare Fund and the contributions are charged to the Profit & Loss Statement of the year when the contributions to the respective funds are due. There are no other obligations other than contribution payable to the respective funds.

ii) Defined Benefit Plans :

The Company has defined benefit plans namely Leave Encashment/Compensated Absence and Gratuity for Employees, the liability for which is determined on the basis of actuarial valuation at the end of the year. Gains and losses arising out of actuarial valuation are recognized immediately in the Profit and Loss Statement as income or expense.

iii) Other Defined Benefits :

Provision for other defined benefit for long term leave encashment is made based on an independent actuarial valuation on projected unit credit method at the end of each financial year. Actuarial gains and losses are recognized immediately in the statement of profit and loss account as income or expenses. Company recognizes the undiscounted amount of short term employee benefits during the accounting period based on service rendered by the employee.

iv) Retrenchment Compensation:

Retrenchment compensation is being mortised over a period of future benefit as estimated by the management.

k) Provisions, Contingent Liabilities and Contingent Assets Provisions involving a substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in the financial statements by way of a note. Contingent assets are neither recognized nor disclosed in the financial statements.

l) Taxes on Income

i) Current tax represents the amount computed as per prevailing taxation laws.

ii) Deferred Tax is recognized subject to consideration of prudence on timing difference being the difference between taxable incomes and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred Tax Assets have been recognized where there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.


Mar 31, 2011

1. System of Accounting

i) The Company generally follows the mercantile system of accounting and recognises income and expenditure on accrual basis except those with significant uncertainties.

ii)Financial statements are based on historical cost convention modified by revaluation of certain fixed assets. These costs are not adjusted to reflect the impact of the changing value in the purchasing power of money.

2. Fixed Assets and Depreciation

A) Fixed Assets:

Fixed Assets, other than revalued are stated at cost of acquisition or construction and net of Subsidy / Cenvat less accumulated depreciation (except on freehold ^/amortisation.

B) Depreciation and Amortisation:

a) Leasehold Land: Premium on leasehold land is amortised over the period of lease.

b) Other Fixed Assets:

i) Depreciation on additions to Building, Water Supply Installation, Machineries and Electrical Installation upto 31st December 1975 for Textile Divif ion and upto 31st March, 1976 for Tea Division and on all other Assets is being provided on Written Down Value Basis, in terms of Section 205(2)(a) of the Companies Act, 1956 at the rates specified in Schedule XIV to the said Act.

ii) Depreciation on additions to Building, Water Supply Installation, Machineries and Electrical Installation from 1st January, 1976 for Textile Division and from 1st April, 1976 for Tea Division has been provided on Straight Line Basis, in terms of Section 205(2) (b) of the Companies Act, 1956 at the rates specified in Schedule XIV to the said Act.

iii) In respect of assets acquired/sold during the year, depreciation has been provided on pro-rata basis.

iv) In respect of revalued assets the difference of depreciation, between written down value and revalued amount, has been charged to Revaluation Reserve.

3. Borrowing Cost

i) Interest and other costs in connection with the borrowing of the funds to the extent related/attributed to the acquisition/construction of qualifying fixed assets are capitalized upto the date when such assets are ready for its intended use and all other borrowing costs are recognised as an expense in period for which they are incurred unless otherwise stated

ii) Borrowing costs such as the premium paid in connection with the borrowings are being amortised over the period of respective borrowings in proportion with the outstanding balances.

4. Government Grants

Capital Grants relating to specific assets are reduced from the gross value of the fixed assets. Other revenue grants are credited to Profit & Loss Account or deducted from the rehted expenses.

5. Investments

All investments are held as Long Term Investments, unless otherwise mentioned and are stated at cost, unless there is a permanent fall in the value of Investments.

6. Inventories

i) Raw Materials are valued at cost or net realisable value whichever is lower, at Textile Division and at net realisable value in Tea Division. Cost is arrived at on the basis of cost of respective lots remaining in stock and related expenses.

ii) Stores, Coal, etc are valued at cost. Costs of stores is arrived at on F.I.F.O. basis in Textile Division except coal which is valued on monthly average basis. At Tea Division, all stores are valued on monthly average basis.

iii) Materials-in-Process is valued at cost on absorption basis or net realisable value, whichever is lower.

iv) Yarn is valued at cost on absorption basis or net realisable value whichever is lower including excise duty.

v) Cloth is valued at cost on absorption basis or net realisable value whichever is lower including excise duty.

vi) Finished Tea is valued at net realisable value.

vii) Waste is valued at estimated realisable value.

viii) Materials-in-Transit is valued at cost to date of the Balance Sheet.

7. Exchange Fluctuations

Monetae Current Assets and Liabilities in foreign currency outstanding at the close of the financial year are valued at the appropriate exchange rates at the close of the year The loss or gain due to fluctuation of exchange rates is charged to Profit & Loss Account.

8. Sales

i) Sale of goods is recognised at the point of despatch of finished goods to the customers.

ii) Export sales are accounted on the basis of dates of Bill of Lading.

iii) Export benefits in the nature of "Duty Entitlement Pass Book under the Duty Exemption Scheme", "Duty Draw back Scheme" and "Bishesh Krishi Upaz Yozana (BKU Yozana Scheme)" are accounted in the year of export.

9. Employee Benefits

i) Defined Contribution Plans: The Company has defined benefit contribution plans in the form of Provident Fund Superannuation Fund EDLI, ESIC and Labour Welfare Fund and the contributions are charged to the Profit & Loss Account of the year when the contributions to the respective funds are due. There are no other obligations other than the contribution payable to the respective funds

ii) Defined Benefit Plans: The Company has defined benefit plans namely Leave encashment/compensated absence and Gratuity for employees, the liability for which is determined on the basis of actuarial valuations at the end of the year. Gains and losses arising out of actuarial valuations are recognised immediately in the Profit and Loss Account as income or expense

iii) Other Defined Benefits: Provision for other Defined Benefit for long term leave encashment is made based on an independent actuarial valuation on projected unit credit method at the end of each financial year. Actuarial gains and losses are recognised immediately in the statement of profit and loss account as income or expenses. Company recognises the undiscounted amount of short term employee benefits during the accounting period based on service rendered by employee.

iv) Retrenchment Compensation: Retrenchement Compensation is being amortised over a period of future benefit as estimated by the management.

10. Impairment of Assets

The carrying amount of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal/external factors. An impairment loss will be recognised wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is greater of the asset net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to the present valuf by using weighted average cost of capital.

11. Provisions, Contingent Liabilities and Contingent Assets

Provisions involving a substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognised but are disclosed in the accounts by way of a note. Contingent assets are neither recognised nor disclosed in the financial statements.

12. Taxes on Income

i) Current tax is determined as the amount of tax payable in respect of taxable income for the year.

ii) Deferred tax is recognised on the basis of timing differences, being the difference between taxable income and accounting income that originate in one period and capable of reversal in one or more subsequent periods.

 
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