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Accounting Policies of Dabur India Ltd. Company

Mar 31, 2015

1.1.1 Basis for preparation of accounts

The accounts have been prepared in accordance with the historical cost convention under accrual basis of accounting as per Indian GAAP. Accounts and Disclosures thereon comply with the Accounting Standards specified in Companies (Accounting Standard) Rules, 2006 which continue to apply under Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014, other pronouncement of ICAI, provisions of the Companies Act and guidelines issued by SEBI as applicable.

All assets and liabilities have been classified as current or non-current as per the company''s normal operating cycle and other criteria set out in Schedule III to the Companies Act, 2013.

2.1.2 Use of Estimates

Indian GAAP enjoins management to make estimates and assumptions that affect reported amount of assets, liabilities, revenue, expenses and contingent liabilities pertaining to years, the financial statement relate to. Actual result could differ from such estimates. Any revision in accounting estimates is recognized prospectively from current year and material revision, including its impact on financial statement, is reported in notes to accounts in the year of incorporation of revision.

2.2. Recognition of Income and Expenses

a. Sales and purchases are accounted for on the basis of passing of title to the goods.

b. Sales comprise of sale price of goods including excise duty but exclude trade discount and Sales Tax/Vat.

c. Income/ loss from future trading of commodities, forming part of inputs, is recognized at the closing point of the contract. For open contracts loss, if any, accrues on balance sheet date is recognized. However profit, if any, accruing on open contracts on balance sheet date is ignored.

d. All the other incomes have been accounted for on accrual basis except for those entailing recognition on realization basis under AS-9 on the ground of uncertainty factor.

e. All expenses are provided on accrual basis unless stated otherwise.

2.3. Fixed Assets

a. Fixed assets are stated at carrying amount i.e. cost less accumulated depreciation.

b. Cost includes freight, duties, taxes and other expenses incidental to acquisition and installation.

c. Depreciation on Fixed Assets has been provided on straight line method in terms of life span of assets specified in Schedule II of the Companies Act, 2013 except for Moulds which are depreciated in four years on straight line method based on technical advice.

d. Patents and trademarks are being amortized over the period of ten years on straight line basis.

e. Softwares are being amortized over the period of five years on straight line basis.

f. For New Projects, all direct expenses and direct overheads (excluding services provided by employees in company''s regular payroll) are capitalized.

g. Capital Subsidy received against fixed capital outlay is deducted from gross value of individual fixed assets, forming part of subsidy scheme granted, by way of proportionate allocation of subsidy amount thereon. Depreciation is charged on net fixed assets after deduction of subsidy amount.

h. On sale of fixed assets, any profit earned towards excess of sale value over gross block of assets (i.e. balancing charge) is transferred from profit & loss account to capital reserve.

2.4. Impairment/discarding of Assets

a. The company identifies impairable fixed assets based on cash generating unit concept for tangible fixed assets and asset specific concept for intangible fixed assets at the year-end in terms of Clause 5 to 13 of AS-28 and Clause 83 of AS-26 respectively for the purpose of arriving at impairment loss thereon, if any, being the difference between the book value and recoverable value of relevant assets. Impairment loss, when crystallizes, is charged against revenue of the year.

b. Apart from test of impairment within the meaning of AS-28, individual tangible fixed assets of various Cash Generating Units (CGUs) are identified for writing down/discarding on the ground of obsolescence, damage, redundancy & un-usability at the year end.

c. Further the company has assessed recoverable value of each CGUs and each intangible asset based on value-in-use method. Such assessment indicated the value in use of corresponding assets higher than corresponding carrying cost of assets thereby ruling out the cause of further arriving at their net-selling-price and exigency of provision against impairment loss.

d. CGUs include Narenderpur plant, Sahibabad plant, each of plants situated at Nashik, Baddi, Jammu, Rudrapur, Silvasa, Pitampur, Kanpur, Alwar, Newai and Jalpaiguri.

e. Annual discount rate considered for arriving at value-in-use of assets of each CGU is 7.50% i.e. the average interest rate of external borrowing plus risk factor @ 2.00 % per annum.

(All amounts in '' crores, unless otherwise stated)

2.5. Investment

Investments that are readily realizable and are intended to be held for not more than one year at the point of acquisition are classified as "Current investments". All other investments are classified as "Non-current investments".

Current investments are stated at the lower of cost and fair value. Long term investments are stated at cost. A provision for diminution is made to recognize a decline other than temporary, if any, in the value of Non current investments.

Investments in Subsidiaries, Joint Ventures and Associates are held for long term and valued at cost reduced by diminution of permanent nature therein, if any.

No profit or losses of subsidiaries are accounted for.

2.6. Research and Development Expenditure

Revenue expenditure on research & development is expensed as incurred including contribution towards scientific research expenses.

2.7. Inventories

Inventories are valued at the lower of cost or net realizable value. Basis of determination of cost remains as follows:

a. Raw material, Packing Material, Stores & Spares: Moving Weighted Average basis

b. Work-in-progress : Cost of Input plus overhead upto the stage of completion

c. Finished Goods : Cost of input plus appropriate overhead

2.8. Deferred Entitlement on Leave Travel Concession:

In terms of opinion of the Expert Advisory Committee of the ICAI, the Company has provided liability accruing on account of deferred entitlement towards Leave Travel Concession in the year in which the employees concerned render their services.

2.9. Retirement Benefits

Liabilities in respect of retirement benefits to employees are provided for as follows:

a. Defined Benefit Plans:

i. Leave Salary of employees on the basis of actuarial valuation as per AS-15.

ii. Post separation benefits of Directors on the basis of actuarial valuation as per AS-15.

iii. Gratuity Liability on the basis of actuarial valuation as per AS-15.

b. Defined Contribution Plans:

i. Liability for superannuation fund on the basis of the premium paid to insurance company in respect of employees covered under Superannuation Fund Policy.

ii. Provident fund & ESI on the basis of actual liability accrued and paid to trust / authority.

2.10. Income Tax and Deferred Tax

The liability of company on account of income tax is estimated considering the provisions of the Income Tax Act, 1961.

Deferred tax is recognized, subject to the consideration of prudence, on timing differences being the difference between taxable income and accounting income that originate in one year and capable of reversal in one or more subsequent years.

2.11. Contingent Liabilities

Disputed liabilities and claims against the company including claims raised by fiscal authorities (e.g. Sales Tax, Income Tax, Excise 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 to accounts.

However, present obligation as a result of past event with possibility of outflow of resources, when reliably estimable, is recognized in accounts.

2.12. Foreign Currency Translation

a. Transactions in foreign currencies are recognized at rate of overseas currency ruling on the date of transactions. Gain / Loss arising on account of rise or fall in overseas currencies vis-a-vis reporting currency between the date of transaction and that of payment is charged to Statement of Profit & Loss.

(All amounts in Rs. crores, unless otherwise stated)

b. Receivables/payables (excluding for fixed assets) in foreign currencies are translated at the exchange rate ruling at the year end date and the resultant gain or loss, is accounted for in the Statement of Profit & Loss.

c. Increase / decrease in foreign currency loan on account of exchange fluctuation are debited / credited to Statement of profit and loss.

d. Impact of exchange fluctuation is separately disclosed in notes to accounts.

2.13. Employee Stock Option Purchase (ESOP)

Aggregate of quantum of option granted under the scheme in monetary term (net of consideration of issue to be paid in cash) in terms of intrinsic value has been shown as Employees Stock Option Scheme outstanding in Reserve and Surplus head of the Balance Sheet with corresponding debit in deferred Employee Compensation under ESOP appearing as a negative item as part of shareholder''s fund as per guidelines to the effect issued by SEBI.

a. With the exercise of option and consequent issue of equity share, corresponding ESOP outstanding is transferred to share premium account.

b. Employees'' contribution for the nominal value of share in respect to option granted to employees of subsidiary company is being reimbursed by subsidiary companies to holding company.

c. Entitlement of option rises proportionately with the issuance of bonus. Nominal value of shares against enhanced options is financed by the company at the point of exercise of such option by employees against utilization of general reserve/security premium.

d. Deferred employees compensation under ESOP is amortised on straight line method over the vesting period.

2.14. Mergers/Amalgamation

Merger / Amalgamation (of the nature of merger) of other company / body corporate with the company are accounted for on the basis of purchase method, the assets / liabilities being incorporated in terms of values of assets and liabilities appearing in the books of transferor entity on the date of such merger / amalgamation for the purpose of arriving at the figure of goodwill or amalgamation reserve.

2.15. Segment Reporting

The Company identifies primary segments based on the pre-dominant sources of risk effects and returns depending on organization and of the management and internal financial reporting system. The operating segments are the segments for which separate financial information are available and operating profit/loss there from are evaluated regularly by the management for allocation of resources and assessment of performance.

Revenue, expenses, assets and liabilities which relate to the company as a whole which are not allocable to segments on direct and/or reasonable basis have been included under "unallocated revenue/ expenses/assets/liabilities".

.16. Operating Leases

Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Lease rentals for operating leases are charged to statement of profit & loss on accrual basis in accordance with the respective lease agreements.

2.17. Earnings Per Share

Basic Earnings per share is calculated by dividing the net profit for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.

For the purpose of calculating diluted earnings per share, the net profit for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares.


Mar 31, 2013

1.1 Basis for preparation of accounts

The accounts have been prepared in accordance with the historical cost convention (except for specifically excluded treatment of accounts referred to in Note no. 50) under accrual basis of accounting as per Indian GAAP. Accounts and Disclosures thereon comply with the Accounting Standards specified in Companies (Accounting Standard) Rules, other pronouncement of ICAI, provisions of the Companies Act, 1956 and guidelines issued by SEBI as applicable.

Indian GAAP enjoins management to make estimates and assumptions that affect reported amount of assets, liabilities, revenue, expenses and contingent liabilities pertaining to years, the financial statement relate to. Actual result could differ from such estimates. Any revision in accounting estimates is recognized prospectively from current year and material revision, including its impact on financial statement, is reported in notes to accounts in the year of incorporation of revision.

All assets and liabilities have been classified as current or non-current as per the company''s normal operating cycle and other criteria set out in Revised Schedule VI to the Companies Act, 1956.

1.2 Recognition of Income and Expenses

(a) Sales and purchases are accounted for on the basis of passing of title to the goods.

(b) Sales comprise of sale price of goods including excise duty but exclude trade discount and Sales tax/Vat.

(c) Income/ loss from future trading of commodities, forming part of inputs, is recognized at the closing point of the contract. For open contracts loss, if any, accrues on balance sheet date is recognized. However profit, if any, accruing on open contracts on balance sheet date is ignored.

(d) All the other incomes have been accounted for on accrual basis except for those income stipulated for recognition on realization basis on the ground of uncertainty under AS-9 or income or expenses referred to in appropriate paragraphs of Note 2.5.

1.3 Fixed Assets

(a) Fixed assets are stated at carrying amount i.e. cost less accumulated depreciation.

(b) Cost includes freight, duties, taxes and other expenses incidental to acquisition and installation.

(c) Depreciation on Fixed Assets has been provided on straight line method at rates specified in Schedule XIV of the Companies Act, 1956 and as per the useful lives of the assets estimated by the management when useful life of the assets is deemed less except for part of 5/1 Unit Sahibabad, Alwar unit and Narenderpur unit and for Motor Vehicles where depreciation has been provided for on written down value methods at the rates specified in the aforesaid Schedule.

(d) Fixed Assets purchased for less than Rs. 0.05 have been depreciated at the rate of 100%.

(e) Patents and trademarks are being amortized over the period of ten years on straight line basis.

(f) Softwares are being amortized over the period of five years on straight line basis.

(g) For New Projects, all direct expenses and direct overheads (excluding services provided by employees in company''s regular payroll) are capitalized.

(h) Capital Subsidy received against fixed capital outlay is deducted from gross value of individual fixed assets, forming part of subsidy scheme granted, by way of proportionate allocation of subsidy amount thereon. Depreciation is charged on net fixed assets after deduction of subsidy amount.

(i) During sale of fixed assets, any profit earned towards excess of sale value over gross block of assets (i.e. balancing charge) is transferred from profit & loss account to capital reserve.

1.4 Impairment/discarding of Assets

(a) The company identifies impairable fixed assets based on cash generating unit concept for tangible fixed assets and asset specific concept for intangible fixed assets at the year-end in term of clause 5 to 13 of AS-28 and clause 83 of AS-26 respectively for the purpose of arriving at impairment loss thereon, if any, being the difference between the book value and recoverable value of relevant assets. Impairment loss, when crystallizes, is charged against revenue of the year.

(b) Apart from test of impairment within the meaning of AS-28, individual tangible fixed assets of various CGU''s are identified for writing down/discarding on the ground of obsolescence, damage, redundancy & un- usability at the year end.

(c) Further the company has assessed recoverable value of each cash generating units (CGUs) and each intangible asset based on value-in-use method. Such assessment indicated the value in use of corresponding assets higher than corresponding carrying cost of assets thereby ruling out the cause of further arriving at their net-selling-price and exigency of provision against impairment loss.

(d) CGUs include Narenderpur plant, Sahibabad plant, each of plants situated at Nashik, Baddi, Jammu, Rudrapur, Silvasa, Pitampur, Kanpur, Alwar, Newai and Jalpaiguri.

(e) Annual discount rate considered for arriving at value-in-use of assets of each CGU is 7.50% i.e. the average interest rate of external borrowing plus risk factor @ 2.00 % per annum.

1.5 Financial Assets & Liabilities

(a) Financial assets held for trading

These assets relate to equity instruments, mutual funds held for short term which is carried at fair value. The difference of cost and fair value is accounted for as loss or income, as the case may be, in profit & loss account.

(b) Financial assets available for sale

These relate to non-current investments e.g. Equity Instruments/ Government Securities held for long term which is carried at fair value. The difference between cost and fair value is accounted for in investment revaluation reserve forming part of equity.

(c) Other financial assets/liabilities - Loans, Receivables, Payables

These include all remaining items of assets and liabilities, (excluding equity, fixed (tangible & intangible) assets, inventories and specific exemptions referred to in paragraphs to follow), being carried at amortized cost. The difference between unamortized value and amortized value is accounted for as a loss or income, as the case may be, in profit & loss account.

No amortization is made for financial assets/ liabilities bearing floating rate of interest or where amortization has immaterial impact on profitability in AS - 30.

(d) Financial Instruments

These relate to off - balance sheet exposure towards foreign exchange of the nature of currency fluctuation or forward contract, being marked to market,entered into with the object of hedging against adverse currency fluctuations (not being for trading and speculation) in respect of import/export commitments. Financial Instruments are held at fair value and the profit or loss arising on year closing date on account of difference between contract rate and exchange rate (the latter being the fair value) on open contracts relevant to maturity date is recognized as profit or loss of the year appearing under broad head of "Finance Cost".

(e) Fair value of financial assets - held for trading is determined on the basis of market quotation/ NAV issued by investees. In the absence of scope of determination of fair value, same are held at cost.

(f) Amortized cost is carried at by way of discounting future cash inflow/outflow in respect of relevant asset/liability as on reporting date against application of effective rate of interest.

(g) Interest in subsidiaries/associates/joint venture, employees related dues, obligation under financial lease (in the capacity of lessee/ lessor) have been left out of the purview of treatments referred to herein for financial assets/liabilities because of different accounting standards dealing with them.

(h) No amortized value of fiscal provision or advance tax has been considered because of period of uncertainty of their adjustment.

1.6 Investments in Subsidiaries, Joint Ventures and Associates

These are held for long term and valued at cost reduced by diminution of permanent nature therein, if any.

No profit or losses of subsidiaries are accounted for.

1.7 Research and Development Expenses

Contributions towards scientific research expenses are charged to the Profit & Loss Account in the year in which the contribution is made.

1.8 Inventories

Inventories are valued at the lower of cost or net realizable value. Basis of determination of cost remains as follows:

(a) Raw material, Packing Material, Stores & Spares: Moving weighted Average basis

(b) Work-in-progress : Cost of Input plus overhead upto the stage of completion

(c) Finished Goods : Cost of input plus appropriate overhead

1.9 Deferred Entitlement on Leave Travel Concession

In terms of opinion of the Expert Advisory Committee of the ICAI, the Company has provided liability accruing on account of deferred entitlement towards Leave Travel Concession in the year in which the employees concerned render their services.

1.10 Retirement Benefits

Liabilities in respect of retirement benefits to employees are provided for as follows:-

(a) Defined Benefit Plans

i) Leave Salary of employees on the basis of actuarial valuation as per AS-15 (revised).

ii) Post separation benefits of directors, which is of the nature of long term benefit, on the basis of actuarial valuation as per AS-15 (revised).

iii) Gratuity Liability on the basis of actuarial valuation as per AS-15 (revised)

(b) Defined Contribution Plans

i) Liability for superannuation fund on the basis of the premium paid to insurance company in respect of employees covered under Superannuation Fund Policy.

ii) Provident fund & ESI on the basis of actual liability accrued and paid to trust / authority.

(c) Voluntary Retirement Scheme, if paid, is charged to revenue in the year of payment.

1.11 Income Tax and Deferred Tax

The liability of company on account of income tax is estimated considering the provisions of the Income Tax Act, 1961.

Deferred tax is recognized, subject to the consideration of prudence, on timing differences being the difference between taxable income and accounting income that originate in one year and capable of reversal in one or more subsequent years.

1.12 Contingent Liabilities

Disputed liabilities and claims against the company including claims raised by fiscal authorities (e.g. Sales Tax , Income Tax & Excise 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 to accounts. However, present obligation as a result of past event with possibility of outflow of resources, when reliably estimable, is recognized in accounts.

1.13 Foreign Currency Translation

(a) Transactions in foreign currencies are recognized at rate of overseas currency ruling on the date of transactions. Gain / Loss arising on account of rise or fall in overseas currencies vis-a-vis reporting currency between the date of transaction and that of payment is charged to Profit & Loss Account.

(b) Receivables/Payables (excluding for fixed assets) in foreign currencies are translated at the exchange rate ruling at the year end date and the resultant gain or loss, is accounted for in the Profit & Loss Account.

(c) Increase / decrease in foreign currency loan on account of exchange fluctuation are debited / credited to profit and loss account.

(d) Impact of exchange fluctuation is separately disclosed in notes to accounts

1.14 Employee Stock Option Purchase (ESOP) Aggregate of quantum of option granted under the scheme in monetary term (net of consideration of issue to be pai d i n cash ) i n terms of i ntri nsi c val u e has been shown as Employees Stock Option Scheme outstanding in Reserve and Surplus head of the Balance Sheet with corresponding debit in deferred Employee Compensation under ESOP appearing as Miscellaneous Expenditure under broad head of Non-current Assets as per guidelines to the effect issued by SEBI.

(a) With the exercise of option and consequent issue of equity share, corresponding ESOP outstanding is transferred to share premium account.

(b) Employees''contribution for the nominal value of share in respect to option granted to employees of subsidiary company is being reimbursed by subsidiary companies to holding company.

(c) Entitlement of option rises proportionately with the issuance of bonus. Nominal value of shares against enhanced options is financed by the company at the point of exercise of such option by employees against utilization of general reserve/security premium.

1.15 Mergers/Amalgamation

Merger / Amalgamation (of the nature of merger) of other company / body corporate with the company are accounted for on the basis of purchase method, the assets / liabilities being incorporated in terms of values of assets and liabilities appearing in the books of transferor entity on the date of such merger/ amalgamation for the purpose of arriving at the figure of goodwill or amalgamation reserve.

1.16 Segment Reporting

The Company identifies primary segments based on the pre-dominant sources of risk effects and returns depending on organization and of the management and internal financial reporting system. The operating segments are the segments for which separate financial information are available and operating profit/loss there from are evaluated regularly by the management for allocation of resources and assessment of performance.

Revenue, expenses assets and liabilities which relate to the company as a whole which are not allocable to segments on direct and/or reasonable basis have been included under "unallocated revenue/ expenses/assets/liabilities"

1.17 Earnings per Share

Basic Earnings per share is calculated by dividing the net profit for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.

For the purpose of calculating diluted earnings per share, the net profit for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares.

1.18 Miscellaneous Expenditure

(a) Deferred Employees Compensation under ESOP is amortized on straight line basis over vesting period.

(b) Share issue expenses and research fee paid in connection with technical collaborations are charged to revenue in the year of occurrence.


Mar 31, 2012

1. Accounting Convention:

The accounts have been prepared in accordance with the historical cost convention (except for specifically excluded treatment of accounts referred to in B 16(a) under accrual basis of accounting as per Indian GAAP. Accounts and disclosures thereon comply with the Accounting Standards specified in Companies (Accounting Standard) Rules, other pronouncements of ICAI, provisions of the Companies Act, 1956 and guidelines issued by SEBI as applicable.

Indian GAAP enjoins management to make estimates and assumptions that affect reported amount of assets, liabilities, revenue, expenses and contingent liabilities pertaining to year, the financial statements relate to. Actual result could differ from such estimates. Any revision in accounting estimate is recognized prospectively from current year and material revision, including its impact on financial statement, is reported in notes to accounts in the year of incorporation of revision.

2. Fixed Assets and Depreciation:

a. Fixed assets are stated at carrying amount i.e. subject to deduction of accumulated depreciation.

b. Cost includes inward freight, duties, taxes and other expenses incidental to acquisition and installation.

c. Depreciation on Fixed Assets has been provided on straight line method at rates specified in Schedule XIV of the Companies Act and as per the useful lives of the assets estimated by the management when useful life of the assets is deemed less except for part of 5/1 Unit Sahibabad, Alwar unit and Narenderpur unit and for Motor Vehicles where depreciation has been provided for on written down value methods at the rates specified in the aforesaid Schedule.

d. Fixed Assets purchased for less than Rs. 5000/- have been depreciated at the rate of 100%.

e. Patents and trademarks are being amortized over the period of ten years on straight line basis.

f. Softwares are being amortized over the period of five years on straight line basis.

g. For New Projects, all direct expenses and direct overheads (excluding services provided by employees in Company's regular payroll) are capitalized.

h. Capital Subsidy received against fixed capital outlay is deducted from gross value of individual fixed assets, forming part of subsidy scheme granted, by way of proportionate allocation of subsidy amount thereon. Depreciation is charged on net fixed assets after deduction of subsidy amount.

i. During sale of fixed assets, any profit earned towards excess of sale value over gross block of assets, is transferred from profit & loss account to capital reserve.

3. Impairment /discarding of assets:

The Company identifies impairable fixed assets based on cash generating unit concept for tangible fixed assets and asset specific concept for intangible fixed assets at the year-end in term of clause 5 to 13 of AS -28 and clause 83 of AS- 26 respectively for the purpose of arriving at impairment loss thereon, if any, being the difference between the book value and recoverable value of relevant assets. Impairment loss, when crystallizes, is charged against revenue of the year. Apart from test of impairment within the meaning of AS 28, individual tangible fixed assets of various CGU's are identified for writing down on the ground of obsolescence, damage, redundancy & un-usability at the year end.

4. Financial Assets & Liabilities:

a. Financial assets held for trading:

These assets relate to equity instruments, mutual funds held for short term which are carried at fair value. The difference of cost and fair value is accounted for as loss or income, forming part of transitional provisions, adjustable against opening balance of General Reserves.

b. Financial assets available for sale:

These relate to non-current investments eg. Equity Instruments/ Government Securities held for long term carried at fair value. The difference between cost and fair value is accounted for in investment revaluation reserve forming part of equity.

c. Other financial Assets/Liabilities - Loans, Receivables, Payables:

These include all remaining items of assets and liabilities, (excluding equity, fixed (tangible & intangible) assets inventories and specific exemptions referred to in note 4(g) to follow), being carried at amortized cost. The difference between unamortized value and amortized value is accounted for as a loss or income, forming part of transitional provisions, adjustable against opening balance of revenue reserves.

No amortization is made for financial assets/ liabilities bearing floating rate of interest or where amortization has immaterial impact on profitability in AS - 30.

d. Financial Instruments:

These relate to off - balance sheet exposure towards foreign exchange of the nature of currency fluctuation or forward contract, being mark to market, entered into with the object of hedging against adverse currency fluctuations (not being for trading and speculation) in respect of import/export commitments.

Financial Instruments are held at fair value and the profit or loss arising on year closing date on account of difference between contract rate and exchange rate (the latter being the fair value) on open contracts is recognized as profit or loss of the year appearing under broad head of "Finance Cost"

e. Fair value of financial assets - held for trading is determined on the basis of market quotation/NAV issued by investees. In the absence of scope of determination of fair value, same are held at cost.

f. Amortized cost is carried at by way of discounting future cash inflow/outflow in respect of relevant asset/liability as on reporting date against application of effective rate of interest.

g. Interest in subsidiaries/associates/joint venture, employees related dues, obligation under financial lease (in the capacity of lessee/ lessor) have been left out of the purview of treatments referred to for financial assets/liabilities because of different accounting standards dealing with them.

h. No amortized value of fiscal provision or advance tax has been considered because of period of uncertainty of their adjustment.

5. Investments in Subsidiaries, Joint Ventures and Associates:

These are held for long term and valued at cost reduced by diminution of permanent nature therein, if any.

No profit or losses of subsidiaries are accounted for.

6. Deferred Entitlement on LTC :

In terms of the opinion of the Expert Advisory Committee of the ICAI, the Company has provided liability accruing on account of deferred entitlement towards LTC in the year in which the employees concerned render their services.

7. Inventories:

Stocks are valued at lower of cost or net realizable value. Basis of determination of cost remain as follows:

a. Raw materials, Packing materials, Stores & Spares : Moving weighted Average Basis

b. Work-in-process : Cost of input plus overhead upto the stage of completion.

c. Finished goods : Cost of input plus appropriate overheads.

8. Research and Development Expenses:

Contributions towards scientific research expenses are charged to the Profit & Loss Account in the year in which the contribution is made.

9. Retirement Benefits:

Liabilities in respect of retirement benefits to employees are provided for as follows :-

a. Defined Benefit Plans :

i) Leave Salary of employees on the basis of actuarial valuation as per AS 15 (revised).

ii) Post separation benefits of directors, which is of the nature of long term benefit, on the basis of actuarial valuation as per AS 15 (revised).

iii) Gratuity Liability on the basis of actuarial valuation as per AS 15 (revised)

b. Defined Contribution Plans:

i) Liability for superannuation fund on the basis of the premium paid to insurance company in respect of employees covered under Superannuation Fund Policy.

ii) Provident fund & ESI on the basis of actual liability accrued and paid to trust / authority.

c. VRS, if paid, is charged to revenue in the year of payment.

10. Recognition of Income and expenses:

a. Sales and purchases are accounted for on the basis of passing of title to the goods.

b. Sales comprise of sale price of goods including excise duty but exclude trade discount and sales tax / VAT.

c. All items of incomes and expenses have been accounted for on accrual basis except for those income stipulated for recognition on realization basis on the ground of uncertainty under AS-9 or income or expenses referred to in appropriate paragraphs of A (4) above.

11. Income Tax & Deferred Taxation:

The liability of Company on account of income tax is estimated considering the provisions of the Income Tax Act, 1961. Deferred tax is recognized, subject to the consideration of prudence, on timing differences being the difference between taxable income and accounting income that originate in one year and capable of reversal in one or more subsequent years.

12. Contingent Liabilities:

Disputed liabilities and claims against the Company including claims raised by fiscal authorities (e.g. Sales Tax , Income Tax, Excise 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 to accounts.

However, present obligation as a result of past event with possibility of outflow of resources, when reliably estimable, is recognized in accounts.

13. Foreign Currency Translation:

a. Transactions in foreign currencies are recognized at rate of overseas currency ruling on the date of transactions. Gain / Loss arising on account of rise or fall in overseas currencies vis-a-vis reporting currency between the date of transaction and that of payment is charged to Profit & Loss Account.

b. Receivables/payables (excluding for fixed assets) in foreign currencies are translated at the exchange rate ruling at the year end date and the resultant gain or loss, is accounted for in the Profit & Loss Account.

c. Increase / decrease in foreign currency loan on account of exchange fluctuation are debited / credited to profit and loss account.

d. Impact of exchange fluctuation is separately disclosed in notes to accounts.

14. Employee Stock Option Purchase (ESOP):

Aggregate of quantum of option granted under the scheme in monetary term (net of consideration of issue to be paid in cash) in terms of intrinsic value has been shown as Employees Stock Option Scheme outstanding in Reserve and Surplus head of the Balance Sheet with corresponding debit in deferred Employee Compensation under ESOP appearing as Miscellaneous Expenditure under broad head of non-current assets as per guidelines to the effect issued by SEBI.

a. With the exercise of option and consequent issue of equity share, corresponding ESOP outstanding is transferred to share premium account.

b. Employees' contribution for the nominal value of share in respect to option granted to employees of subsidiary Company is being reimbursed by subsidiary companies to holding Company.

15. Merger / Amalgamation:

Merger / Amalgamation (of the nature of merger) of other Company / body corporate with the Company are accounted for on the basis of purchase method, the assets / liabilities being incorporated in terms of values of assets and liabilities appearing in the books of transferor entity on the date of such merger / amalgamation for the purpose of arriving at the figure of goodwill or amalgamation reserve.

16. Miscellaneous Expenditure:

- Deferred Employees Compensation under ESOP is amortized on straight line basis over vesting period.

- Share issue expenses and research fee paid to technical collaborators are charged to revenue in the year of is occurrence


Mar 31, 2011

1. Accounting Convention:

The accounts have been prepared in accordance with the historical cost convention under accrual basis of accounting as per Indian GAAP. Accounts and disclosures thereon comply with the Accounting Standards specified in Companies (Accounting Standard) Rules, other pronouncements of ICAI, provisions of the Companies Act, 1956 and guidelines issued by SEBI as applicable.

Indian GAAP enjoins management to make estimates and assumptions that affect reported amount of assets, liabilities, revenue, expenses and contingent liabilities pertaining to year, the financial statements relate to. Actual result could differ from such estimates. Any revision in accounting estimate is recognized prospectively from current year and material revision, including its impact on financial statement, is reported in notes to accounts in the year of incorporation of revision.

2. Fixed Assets and Depreciation:

- Fixed assets are stated at carrying amount i.e. subject to deduction of accumulated depreciation.

- Cost includes inward freight, duties, taxes and other expenses incidental to acquisition and installation.

- Depreciation on Fixed Assets has been provided on straight line method at rates specified in Schedule XIV of the Companies Act and as per the useful lives of the assets estimated by the management when useful life of the assets is deemed less except for part of 5/1 Unit Sahibabad, Alwar unit and Narenderpur unit where depreciation has been provided for on written down value methods at the rates specified in the aforesaid Schedule.

- Patents and trademarks are being amortized over the period of ten years on straight line basis.

- Softwares are being amortized over the period of five years on straight line basis.

- For New Projects, all direct expenses and direct overheads (excluding services provided by employees in companys regular payroll) are capitalized.

- Capital Subsidy received against fixed capital outlay is deducted from gross value of individual fixed assets, forming part of subsidy scheme granted, by way of proportionate allocation of subsidy amount thereon. Depreciation is charged on net fixed assets after deduction of subsidy amount.

- During sale of fixed assets, any profit earned towards excess of sale value over gross block of assets, is transferred from profit &loss account to capital reserve.

3. Impairment /discarding of assets :-

The company identifies impairable fixed assets based on cash generating unit concept for tangible fixed assets and asset specific concept for intangible fixed assets at the year-end in term of clause 5 to 13 of AS -28 and clause 83 of AS- 26 respectively for the purpose of arriving at impairment loss thereon, if any, being the difference between the book value and recoverable value of relevant assets. Impairment loss, when crystallizes, is charged against revenue of the year.

Apart from test of impairment within the meaning of AS 28, individual tangible fixed assets of various CGUs are identified for writing down on the ground of obsolescence, damage, redundancy & un-usability at the year end.

4. Investments :

Current investments are held at lower of cost and NAV/Market value. Long term investments are held at cost less diminution, if any, in carrying cost of investments other than temporary in nature.

Loss, if any, sustained by any subsidiary is not recognized.

5. Deferred Entitlement on LTC :

In terms of the opinion of the Expert Advisory Committee of the ICAI, the Company has provided liability accruing on account of deferred entitlement towards LTC in the year in which the employees concerned render their services.

6. Inventories:

Stocks are valued at lower of cost or net realizable value. Basis of determination of cost remain as follows:

- Raw materials, Packing materials, stores & Spares : Weighted Average Basis

- Work-in-process : Cost of input plus overhead upto the stage of completion.

- Finished goods : Cost of input plus appropriate Overheads.

7. Research and Development Expenses:

Contributions towards scientific research expenses are charged to the Profit & Loss Account in the year in which the contribution is made.

8. Retirement Benefits:

Liabilities in respect of retirement benefits to employees are provided for as follows :-

A. Defined Benefit Plans :

- Leave Salary of employees on the basis of actuarial valuation as per AS 15 (revised).

- Post separation benefits of directors, which is of the nature of long term benefit, on the basis of actuarial valuation as per AS 15 (revised).

- Gratuity Liability on the basis of actuarial valuation as per AS 15 (revised)

B. Defined Contribution Plans :

- Liability for superannuation fund on the basis of the premium paid to insurance company in respect of employees covered under Superannuation Fund Policy.

- Provident fund & ESI on the basis of actual liability accrued and paid to trust / authority.

C. VRS, if paid, is charged to revenue in the year of payment.

9. Recognition of Income and expenses:

- Sales and purchases are accounted for on the basis of passing of title to the goods.

- Sales comprise of sale price of goods including excise duty but exclude trade discount and sales tax / VAT.

- All items of incomes and expenses have been accounted for on accrual basis except for those income stipulated for recognition on realization basis on the ground of uncertainty under AS-9.

10. Income Tax & Deferred Taxation

The liability of company on account of income tax is estimated considering the provisions of the Income Tax Act, 1961. Deferred tax is recognized, subject to the consideration of prudence, on timing differences being the difference between taxable income and accounting income that originate in one year and capable of reversal in one or more subsequent years.

11. Contingent Liabilities:

Disputed liabilities and claims against the company including claims raised by fiscal authorities (e.g. Sales Tax , Income Tax, Excise 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 to accounts.

However, present obligation as a result of past event with possibility of outflow of resources, when reliably estimable, is recognized in accounts.

12. Foreign Currency Translation:

- Transactions in foreign currencies are recognized at rate of overseas currency ruling on the date of transactions. Gain / Loss arising on account of rise or fall in overseas currencies vis-a-vis reporting currency between the date of transaction and that of payment is charged to Profit & Loss Account.

- Receivables/payables (excluding for fixed assets) in foreign currencies are translated at the exchange rate ruling at the year end date and the resultant gain or loss, is accounted for in the Profit & Loss Account.

- Increase / decrease in foreign currency loan on account of exchange fluctuation are debited / credited to profit and loss account.

- Impact of exchange fluctuation is separately disclosed in notes to accounts.

13 Employee Stock Option Purchase (ESOP):

Aggregate of quantum of option granted under the scheme in monetary term (net of consideration of issue to be paid in cash) in terms of intrinsic value has been shown as Employees Stock Option Scheme outstanding in Reserve and Surplus head of the Balance Sheet by way of debiting deferred Employee Compensation under ESOP as per guidelines to the effect issued by SEBI.

- With the exercise of option and consequent issue of equity share, corresponding ESOP outstanding is transferred to share premium account.

- Employees contribution for the nominal value of share in respect to option granted to employees of subsidiary company is being reimbursed by subsidiary companies to holding company.

14. Derivative Trading :

The company enters into derivative transaction of the nature of currency future or forward contract with the object of hedging against adverse currency fluctuation only (not being for trading or speculation) in respect of import / export commitment and exposure in foreign currency. The contracts are by and large mark to market and loss, if any, sustained on open contract is recognized in accounts. However gain, if any, in this connection is not recognized as a measure of prudence.

15. Merger / Amalgamation:

Merger / Amalgamation (of the nature of merger) of other company / body corporate with the company are accounted for on the basis of purchase method, the assets / liabilities being incorporated in terms of values of assets and liabilities appearing in the books of transferor entity on the date of such merger / amalgamation for the purpose of arriving at the figure of goodwill or amalgamation reserve.

16. Miscellaneous Expenditure:

- Deferred Employees Compensation under ESOP is amortized on straight line basis over vesting period.

- Share issue expenses and research fee paid to technical collaborators are charged to revenue in the year of its occurrence


Mar 31, 2010

1. Accounting Convention:

The accounts have been prepared in accordance with the historical cost convention under accrual basis of accounting as per Indian GAAP. Accounts and disclosures thereon comply with the Accounting Standards specified in Companies (Accounting Standard) Rules, other pronouncements of ICAI, provisions of the Companies Act, 1956 and guidelines issued by SEBI as applicable.

Indian GAAP enjoins management to make estimates and assumptions that affect reported amount of assets, liabilities, revenue, expenses and contingent liability pertaining to year, the financial statements relate to. Actual result could differ from such estimates. Any revision in accounting estimate is recognized prospectively from current year and material revision, including its impact on financial statement, is reported in notes to accounts in the year of incorporation of revision.

2. Fixed Assets and Depreciation:

- Fixed assets are stated at carrying amount i.e. subject to deduction of accumulated depreciation.

- Cost includes inward freight, duties, taxes and other expenses incidental to acquisition and installation.

- Depreciation on Fixed Assets have been provided on straight line method at rates specified in Schedule XIV of the Companies Act and as per the useful lives of the assets estimated by the management when useful life of the assets is deemed less except for part of 5/1 Unit Sahibabad, Alwar unit and Narenderpur unit where depreciation have been provided for on written down value methods at the rates specified in the aforesaid Schedule.

- Patents are being amortized over the period of ten years on straight line basis.

- Software are being amortized over the period of five years on straight line basis.

- For New Projects , all direct expenses and direct overheads (excluding services provided by employees in companys regular payroll) are capitalized.

- Capital Subsidy received against fixed capital outlay is deducted from gross value of individual fixed assets, forming part of subsidy scheme granted, by way of proportionate allocation of subsidy amount thereon. Depreciation is charged on net fixed assets after deduction of subsidy amount.

- During sale of fixed assets, any profit earned towards excess of sale value over gross block of assets, is transferred from profit & loss account to capital reserve.

3. Impairment /discarding of assets :

The company identifies impair able fixed assets based on cash generating unit concept for tangible fixed assets and asset specific concept for intangible fixed assets at the year-end in term of clause 5 to 13 of AS -28 and clause 83 of AS- 26 respectively for the purpose of arriving at impairment loss thereon, if any, being the difference between the book value and recoverable value of relevant assets. Impairment loss, when crystallizes, is charged against revenue of the year.

Apart from test of impairment within the meaning of AS 28, individual tangible fixed assets of various CGUs are identified for writing down on the ground of obsolescence, damage, redundancy & un-usability at the year end.

4. Investments :

Current investments are held at lower of cost and NAV/Market value. Long term investments are held at cost less diminution, if any, in carrying cost of investments other than temporary in nature.

Loss, if any, sustained by any subsidiary is not recognized.

5. Deferred Entitlement on LTC :

In terms of the opinion of the Expert Advisory Committee of the ICAI, the Company has provided liability accruing on account of deferred entitlement towards LTC in the year in which the employees concerned render their services.

6. Inventories:

Stocks are valued at lower of cost or net realizable value. Basis of determination of cost remain as follows:

- Raw materials, Packing materials, stores & Spares : Weighted Average Basis

- Work-in-process : Cost of input plus overheadupto the stage of completion.

- Finished goods : Cost of input plus appropriate Overhead.

7. Research and Development Expenses:

Contributions towards scientific research expenses are charged to the Profit & Loss Account in the year in which the contribution is made.

8. Retirement Benefits:

Liabilities in respect of retirement benefits to employees are provided for as follows :- A. Defined Benefit Plans :

- Leave Salary of employees on the basis of actuarial valuation as per AS 15 (revised).

- Post separation benefits of directors, which is of the nature of long term benefit, on the basis of actuarial valuation as per AS 15 (revised).

- Gratuity Liability on the basis of actuarial valuation as per AS 15 (revised). B. Defined Contribution Plans :

- Liability for superannuation fund on the basis of the premium paid to insurance company in respect of employees covered under Superannuation Fund Policy.

- Provident fund & ESI on the basis of actual liability accrued and paid to trust / authority. C . VRS, if paid, is charged to revenue in the year of payment.

9. Recognition of Income and expenses:

- Sales and purchases are accounted for on the basis of passing of title to the goods.

- Sales comprise of sale price of goods including excise duty but exclude trade discount and sales tax / VAT.

- All items of incomes and expenses have been accounted for on accrual basis except for those income stipulated for recognition on realization basis on the ground of uncertainty under AS -9.

10. Income Tax & Deferred Taxation:

The liability of company on account of income tax is estimated considering the provisions of the Income Tax Act , 1961. Deferred tax is recognized, subject to the consideration of prudence, on timing differences being the difference between taxable income and accounting income that originate in one year and capable of reversal in one or more subsequent years.

11. Contingent Liabilities:

Disputed liabilities and claims against the company including claims raised by fiscal authorities (e.g. Sales Tax , Income Tax, Excise 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 to accounts.

However, present obligation as a result of past event with possibility of outflow of resources, when reliably estimable, is recognized in accounts.

12. Foreign Currency Translation:

- Transaction in foreign currencies are recognized at rate of overseas currency ruling on the date of transactions. Gain / Loss arising on account of rise or fall in overseas currencies vis-a-vis reporting currency between the date of transaction and that of payment is charged to Profit & Loss Account.

- Receivables/payables (excluding for fixed assets) in foreign currencies are translated at the exchange rate ruling at the year end date and the resultant gain or loss, is accounted for in the Profit & Loss Account.

- Increase / decrease in foreign currency loan on account of exchange fluctuation are debited / credited to profit and loss account.

- Impact of exchange fluctuation is separately disclosed in notes to accounts.

13. Employee Stock Option Purchase (ESOP):

Aggregate of quantum of option granted under the scheme in monetary term (net of consideration of issue to be paid in cash) in terms of intrinsic value has been shown as Employees Stock Option Scheme outstanding in Reserve and Surplus head of the Balance Sheet by way of debiting deferred Employee Compensation under ESOP as per guideline to the effect issued by SEBI.

- With the exercise of option and consequent issue of equity share, corresponding ESOP outstanding is transferred to share premium account.

- Employees contribution for the nominal value of share in respect to option granted to employees of subsidiary company is being reimbursed by subsidiary companies to holding company.

14. Derivative Trading :

The company enters into derivative transaction of the nature of currency future or forward contract with the object of hedging against adverse currency fluctuation only (not being for trading or speculation) in respect of import / export commitment and exposure in foreign currency. The contracts are by and large mark to market and loss, if any, sustained on open contract is recognized in accounts. However gain, if any, in this connection is not recognized as a measure of prudence.

15. Miscellaneous Expenditure:

- Deferred Employees Compensation under ESOP is amortized on straight line basis over vesting period.

- Share issue expenses and research fee paid to technical collaborators are charged to revenue in the year of is occurrence



 
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