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Accounting Policies of Dai Ichi Karkaria Ltd. Company

Mar 31, 2014

Basis of accounting:

The financial statements are prepared under the historical cost convention in accordance with the generally accepted accounting principles (GAAP) and applicable Accounting Standards notified under Section 211(3C) of the Companies Act, 1956 ("the 1956 Act") (which continue to be applicable in respect of Section 133 of the Companies Act, 2013 ("the 2013 Act") in terms of General Circular 15/2013 dated 13 September, 2013 of the Ministry of Corporate Affairs) and the relevant provisions of the 1956 Act, 2013 Act, as applicable.

Estimates:

The preparation of financial statements require estimates and assumptions to be made that effect the reported amount of assets and liabilities and other information as at the date of the financial statement and reported amounts of revenue and expenses during the recording period. Difference between the actual results and estimates are recognized in the period in which the results are known/materialised.

Fixed assets: (including research and development (R&D) assets)

i. Recognition:

Recognized at cost of acquisition/construction (inclusive of expenses (net) up to attainment of commercial production) except assets at Kasarwadi, Pune as at April 1, 1993, which is stated at revalued figures as on that date.

ii. Impairment:

The carrying amounts of tangible fixed assets are reviewed for impairment if events or changes in the circumstances indicate that the carrying value of the asset may not be recoverable. If there are indicators of impairment, an assessment is made to determine whether the asset''s carrying value exceeds its recoverable amount. Whenever the carrying value of an asset exceeds its recoverable amount, impairment is charged to statement of profit and loss.

iii. Depreciation and Amortisation:

Depreciation is provided at the rates prescribed in Schedule XIV to the Companies Act, 1956 on:

— written down value method for assets at Kasarwadi, Pune (including R & D assets). Incremental depreciation on revalued assets is adjusted to revaluation reserve.

— Straight line method for fixed assets at Kurkumbh, Pune.

— Leasehold assets are amortised over the life of the lease.

Capital work-in-progress:

Projects under which tangible fixed assets are not yet ready for their intended use are carried at cost, comprising direct cost, related incidental expenses and attributable interest.

Research and development:

Capital expenditure is shown as fixed asset and accordingly depreciated. All revenue expenditure is charged to Statement of Profit and Loss.

Investments:

Investments are stated at cost and classified as long term or current. Provision is made for diminution, other than temporary, if any, in respect of a long term investments. Current investments are valued at lower of cost and fair value.

Inventory:

Inventories are valued at lower of cost and net realizable value, on the weighted average basis. Work in progress, Semi finished goods and Finished goods are valued on absorption costing basis. Due allowance is made for slow moving and obsolete stocks.

Notes forming part of the Financial Statements

Sundry Trade Receivables/loans and advances:

Sundry Trade Receivables and loans and advances are stated after making adequate provision for doubtful debts/ advances, if any.

Revenue recognition:

Sale of goods

Sales are recognised, net of returns and trade discounts, on transfer of significant risks and rewards of ownership to the buyer, which generally coincides with the delivery of goods to customers. Sales include excise duty but exclude sales tax and value added tax.

Other income:

Interest income is accounted on accrual basis. Dividend income is accounted for when the right to receive it is established.

Excise:

Excise duty is recognized on goods manufactured.

Employee benefits:

Employee benefits include provident fund, employee state insurance scheme, gratuity fund and compensated absences.

The Company''s contributions to provident fund and employee state insurance scheme are considered as defined contribution plans and are charged as an expense based on the amount of contribution required to be made.

For defined benefit plans in the form of gratuity fund the cost of providing benefits is determined using the Projected Unit Credit method, with actuarial valuations being carried out at each balance sheet date. Actuarial gains and losses are recognised in the Statement of Profit and Loss in the period in which they occur. Past service cost is recognised immediately to the extent that the benefits are already vested and otherwise is amortised on a straight-line basis over the average period until the benefits become vested.

Provision for compensated absences is made on the basis of actuarial valuation carried out as at the Balance Sheet date. Foreign currency transactions:

Transactions in foreign currency are recorded at exchange rates prevailing on the date of the transaction. Year end balance of monetary items is restated at closing rates. Exchange difference arising on restatement or settlement is charged to Statement of Profit and Loss.

Premium/discount in respect of forward cover contract is amortized over period of contract.

Leases:

Lease arrangements where the risks and rewards incidental to ownership of an asset substantially vest with the lessor are recognised as operating leases. Lease rentals under operating leases are recognised in the Statement of Profit and Loss on a straight-line basis.

Taxation:

Provision for current tax is made after taking into account rebate and relief available under Income Tax Act, 1961.

Deferred tax is recognized subject to consideration of prudence, on timing differences between taxable and accounting income that originated in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets are recognized only if there is a virtual/reasonable certainty of realization.

Dividend:

Provision is made for proposed dividend, including corporate dividend tax thereon, subject to approval of members. Contingent Liabilities:

Contingent liabilities are disclosed after careful evaluation of the facts and legal aspects of the issues involved.

(F) The Company has one class of equity shares having par value of Rs.10/- per share. Each equity share holder is eligible for one vote per share held. Each equity share holder is entitled to dividend as and when the Company declares and pays dividend after obtaining share holders approval.


Mar 31, 2013

Basis of accounting:

The financial statements are prepared under the historical cost convention in accordance with the generally accepted accounting principles (GAAP) and applicable Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and provisions of the Companies Act, 1956.

Estimates:

The preparation of financial statements require estimates and assumptions to be made that effect the reported amount of assets and liabilities and other information as at the date of the financial statement and reported amounts of revenue and expenses during the recording period. Difference between the actual results and estimates are recognized in the period in which the results are known/materialised.

Fixed assets: (including research and development (R&D) assets)

i. Recognition:

Recognized at cost of acquisition/construction (inclusive of expenses (net) up to attainment of commercial production) except assets at Kasarwadi, Pune as at April 1, 1993, which is stated at revalued figures as on that date.

ii. Impairment:

The carrying amounts of tangible fixed assets are reviewed for impairment if events or changes in the circumstances indicate that the carrying value of the asset may not be recoverable. If there are indicators of impairment, an assessment is made to determine whether the asset''s carrying value exceeds its recoverable amount. Whenever the carrying value of an asset exceeds its recoverable amount, impairment is charged to profit and loss account.

iii. Depreciation:

Depreciation is provided at the rates prescribed in Schedule XIV to the Companies Act, 1956 on:

— written down value method for assets at Kasarwadi, Pune (including R & D assets). Incremental depreciation on revalued assets is adjusted to revaluation reserve.

— Straight line method for fixed assets at Kurkumbh, Pune.

— Leasehold assets are amortised over the life of the lease.

Capital work-in-progress:

Projects under which tangible fixed assets are not yet ready for their intended use are carried at cost, comprising direct cost, related incidental expenses and attributable interest.

Research and development:

Capital expenditure is shown as fixed asset and accordingly depreciated. All revenue expenditure is charged to Statement of Profit and Loss.

Investments:

Investments are stated at cost and classified as long term or current. Provision is made for diminution, other than temporary, if any, in respect of a long term investments. Current investments are valued at lower of cost and fair value.

Inventory:

Inventories are valued at lower of cost and net realizable value, on the weighted average basis. Work in progress, Semi finished goods and Finished goods are valued on absorption costing basis. Due allowance is made for slow moving and obsolete stocks.

Sundry Trade Receivables/loans and advances:

Sundry Trade Receivables and loans and advances are stated after making adequate provision for doubtful debts/ advances, if any.

Revenue recognition:

Sale of goods

Sales are recognised, net of returns and trade discounts, on transfer of significant risks and rewards of ownership to the buyer, which generally coincides with the delivery of goods to customers. Sales include excise duty but exclude sales tax and value added tax.

Other income:

Interest income is accounted on accrual basis. Dividend income is accounted for when the right to receive it is established

Excise:

Excise duty is recognized on goods manufactured.

Employee benefits:

Employee benefits include provident fund, employee state insurance scheme, gratuity fund and compensated absences.

The Company''s contributions to provident fund and employee state insurance scheme are considered as defined contribution plans and are charged as an expense based on the amount of contribution required to be made.

For defined benefit plans in the form of gratuity fund the cost of providing benefits is determined using the Projected Unit Credit method, with actuarial valuations being carried out at each balance sheet date. Actuarial gains and losses are recognised in the Statement of Profit and Loss in the period in which they occur. Past service cost is recognised immediately to the extent that the benefits are already vested and otherwise is amortised on a straight-line basis over the average period until the benefits become vested.

Provision for compensated absences is made on the basis of actuarial valuation carried out as at the Balance Sheet date.

Foreign currency transactions:

Transactions in foreign currency are recorded at exchange rates prevailing on the date of the transaction. Year end balance of monetary items is restated at closing rates. Exchange difference arising on restatement or settlement is charged to Statement of Profit and Loss.

Premium/discount in respect of forward cover contract is amortized over period of contract.

Leases:

Lease arrangements where the risks and rewards incidental to ownership of an asset substantially vest with the lessor are recognised as operating leases. Lease rentals under operating leases are recognised in the Statement of Profit and Loss on a straight-line basis.

Taxation:

Provision for current tax is made after taking into account rebate and relief available under Income Tax Act, 1961.

Deferred tax is recognized subject to consideration of prudence, on timing differences between taxable and accounting income that originated in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets are recognized only if there is a virtual/reasonable certainty of realization.

Dividend:

Provision is made for proposed dividend, including corporate dividend tax thereon, subject to approval of members.

Contingent Liabilities:

Contingent liabilities are disclosed after careful evaluation of the facts and legal aspects of the issues involved.


Mar 31, 2012

Basis of accounting:

The financial statements are prepared under the historical cost convention in accordance with the generally accepted accounting principles (GAAP) and applicable accounting standards issued by the Institute of Chartered Accountants of India and provisions of the Companies Act, 1956.

Estimates:

The preparation of financial statements require estimates and assumptions to be made that effect the reported amount of assets and liabilities and other information as at the date of the financial statement and reported amounts of revenue and expenses during the recording period. Difference between the actual results and estimates are recognized in the period in which the results are known/materialized.

Fixed assets: (including research and development (R&D) assets)

i. Recognition:

Recognized at cost of acquisition/construction (inclusive of expenses (net) up to attainment of commercial production) except assets at Kasarwadi, Pune as at April 1, 1993, which is stated at revalued figures as on that date.

ii. Impairment:

The carrying amounts of tangible fixed assets are reviewed for impairment if events or changes in the circumstances indicate that the carrying value of the asset may not be recoverable. If there are indicators of impairment, an assessment is made to determine whether the asset's carrying value exceeds its recoverable amount. Whenever the carrying value of an asset exceeds its recoverable amount, impairment is charged to statement of profit and loss.

iii. Depreciation:

Depreciation is provided at the rates prescribed in schedule XIV to the Companies Act, 1956 on:

- written down value method for assets at Kasarwadi, Pune (including R&D assets). Incremental depreciation on revalued assets is adjusted to revaluation reserve.

- Straight line method for fixed assets at Kurkumbh, Pune.

Borrowing cost:

Interest on specific borrowing related to qualifying assets is included in the cost of asset. All other borrowing costs are charged to profit and loss account in the period in which they are incurred.

Research and development:

Capital expenditure is shown as fixed asset and accordingly depreciated. All revenue expenditure is charged to profit and loss account.

Investments:

Investments are stated at cost and classified as long term or current. Provision is made for diminution, other than temporary, if any, in respect of a long term investments..Current investments are valued at lower of cost and fair value.

Inventory:

Inventories are valued at lower of cost and net realizable value, on the weighted average basis. Work in progress, Semi finished goods and Finished goods are valued on absorption costing basis. Due allowance is made for slow moving and obsolete stocks.

Sundry debtors/loans and advances:

Sundry debtors and loans and advances are stated after making adequate provision for doubtful debts/advances, if any.

Sales:

Revenue is recognized on delivery of product and/or on passage of title to the buyer.

Excise:

Excjse duty is recognized on goods manufactured.

Employee benefits:

The company has gratuity scheme funded with Life Insurance Corporation of India. Payments, determined as per actuarial valuation, under the scheme are charged to profit and loss account. Under this arrangement, in the event of an employee resigning in between/before superannuation, the company has to bear a part of the actual liability which is accounted as and when the event occurs since the differential gratuity may not be material.

Provision for leave encashment has been actuarially determined at the balance sheet date. Actuarial gain and losses are recognized in of profit and loss account.

Foreign currency transactions:

Transactions in foreign currency are recorded at exchange rates prevailing on the date of the transaction. Yearend balance of monetary items is restated at closing rates. Exchange difference arising on restatement or settlement is charged to profit and loss account.

Premium/discount in respect of forward cover contract is amortized over period of contract.

Taxation:

Provision for current tax is made after taking into account rebate and relief available under Income Tax Act, 1961.

Deferred tax is recognized subject to consideration of prudence, on timing differences between taxable and accounting income that originated in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets are recognized only if there is a virtual/reasonable certainty of realization.

Dividend:

Provision is made for proposed dividend, including corporate dividend tax thereon, subject to approval of members. Contingent Liabilities:

Contingent liabilities are disclosed after careful evaluation of the facts and legal aspects of the issues involved.


Mar 31, 2011

Basis of accounting:

The financial statements are prepared under the historical cost convention in accordance with the generally accepted accounting principles (GAAP) and applicable accounting standards issued by the Institute of Chartered Accountants of India and provisions of the Companies Act, 1956.

Estimates:

The preparation of financial statements require estimates and assumptions to be made that effect the reported amount of assets and liabilities and other information as at the date of the financial statement and reported amounts of revenue and expenses during the recording period. Difference between the actual results and estimates are recognized in the period in which the results are known/materialised.

Fixed assets: (including research and development (R&D) assets)

(i) Recognition:

Recognized at cost of acquisition/construction (inclusive of expenses (net) up to attainment of commercial production) except assets at Kasarwadi, Pune as at April 1, 1993, which is stated at revalued figures as on that date.

(ii) Impairment:

The carrying amounts of tangible fixed assets are reviewed for impairment if events or changes in the circu mstances indicate that the carrying value of the asset may not be recoverable. If there are indicators of impairment, an assessment is made to determine whether the assets carrying value exceeds its recoverable amount. Whenever the carrying value of an asset exceeds its recoverable amount, impairment is charged to profit and loss account.

(iii) Depreciation:

Depreciation is provided at the rates prescribed in schedule XIV to the Companies Act, 1956 on:

- written down value method for assets at Kasarwadi, Pune (including R&D assets). Incremental depreciation on revalued assets is adjusted to revaluation reserve.

- Straight line method for fixed assets at Kurkumbh, Pune.

Borrowing cost:

Interest on specific borrowing related to qualifying assets is included in the cost of asset. All other borrowing costs are charged to profit and loss account in the period in which they are incurred.

Research and development:

Capital expenditure is shown as fixed asset and accordingly depreciated. All revenue expenditure is charged to profit and loss account.

Investments:

Investments are stated at cost and classified as long term or current. Provision is made for diminution, other than temporary, if any, in respect of a long term investments. Current investments are valued at lower of cost and fair value.

Inventory:

Inventories are valued at lower of cost and net realizable value, on the weighted average basis. Work in progress, Semi finished goods and Finished goods are valued on absorption costing basis. Due allowance is made for slow moving and obsolete stocks.

Sundry debtors/loans and advances:

Sundry debtors and loans and advances are stated after making adequate provision for doubtful debts/advances, if any.

Sales:

Revenue is recognized on delivery of product and/or on passage of title to the buyer.

Excise:

Excise duty is recognized on goods manufactured.

Employee benefits:

The company has gratuity scheme funded with Life Insurance Corporation of India. Payments, determined as per actuarial valuation, under the scheme are charged to profit and loss account. Under this arrangement, in the event of an employee resigning in between/before superannuation, the company has to bear a part of the actual liability which is accounted as and when the event occurs since the differential gratuity may not be material.

Provision for leave encashment has been actuarially determined at the balance sheet date. Actuarial gain and losses are recognized in profit and loss account.

Foreign currency transactions:

Transactions in foreign currency are recorded at exchange rates prevailing on the date of the transaction. Year end balance of monetary items is restated at closing rates. Exchange difference arising on restatement or settlement is charged to profit and loss account.

Premium/discount in respect of forward cover contract is amortized over period of contract.

Taxation:

Provision for current tax is made after taking into account rebate and relief available under Income Tax Act, 1961.

Deferred tax is recognized subject to consideration of prudence, on timing differences between taxable and accounting income that originated in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets are recognized only if there is a virtual/reasonable certainty of realization.

Dividend:

Provision is made for proposed dividend, including corporate dividend tax thereon, subject to approval of members.

Contingent Liabilities:

Contingent liabilities are disclosed after careful evaluation of the facts and legal aspects of the issues involved.

 
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