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Accounting Policies of DIC India Ltd. Company

Dec 31, 2015

BASIS OF PREPARATION

These financial statements have been prepared in accordance with the generally accepted accounting principles in India under the historical cost convention on accrual basis. Pursuant to Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014, till the Standards of Accounting or any addendum thereto are prescribed by Central Government in consultation and recommendation of the National Financial Reporting Authority, the existing Accounting Standards notified under the Companies Act, 1956 shall continue to apply. Consequently, these financial statements have been prepared to comply, in all material aspects, with the accounting standards notified under Section 211(3C) [Companies (Accounting Standards) Rules, 2006, as amended] of the Companies Act, 1956 and other relevant provisions of the Companies Act, 2013 (the 'Act').

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 the Schedule III to the Act.

FIXED ASSETS

Fixed Assets are stated at cost of acquisition less accumulated depreciation/amortization and accumulated impairment losses, if any.

Cost comprises cost of acquisition including non-refundable taxes/duties, freight and other incidental expenses related to acquisition and installation. Cost of software includes license fees and cost of implementation / system integration services, where applicable.

Subsequent expenditures related to an item of fixed asset (tangible or intangible) are added to its book value only if they increase the future benefits from the existing asset beyond its previously assessed standard of performance.

DEPRECIATION AND AMORTISATION

Depreciation on tangible fixed assets is provided over the estimated useful lives of the assets in keeping with the requirements of Schedule II to the Act which is in line with the technical evaluation carried out during the year by the Company's expert as under:

(i) On Silos and Rollers included in Plant and Equipments on Straight Line Method @ 20%.

(ii) On Research Equipment included in Plant and Equipments on Straight Line Method @ 25%.

(iii) On Computers, on Straight Line Method @ 33.33%.

(iv) For assets set out in (i) to (iii) above, estimated useful lives are different from those specified in Schedule II to Act. On all other tangible assets, depreciation is provided on Written Down Value Method over the useful lives specified in Schedule II to the Act..

(v) All assets costing Rs 5,000 or less are fully depreciated in the year of additions.

(vi) In respect of assets acquired, sold or discarded during the period, prorated depreciation, for the period during which each such asset was in use, after rounding off part of the month to the whole month.

(vii) Also refer Note 46.

Leasehold land is amortized on a straight-line basis over the lease period. Intangible assets (Computer Software) are amortized on a straight-line basis over a period of four years.

IMPAIRMENT

Assessment is done at each Balance Sheet date as to whether there is any indication that an asset (tangible and intangible) may be impaired.

An impairment loss, if any, is recognized wherever the carrying amount of the fixed assets exceeds the recoverable amount i.e. the higher of the assets' net selling price and value in use.

After impairment, depreciation is provided on the revised carrying amount of the fixed asset over its remaining useful life.

INVESTMENTS

Investments that are readily realizable and are intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as long-term investments. Long-term investments are carried at cost less write down for any diminution, other than temporary, in carrying value.

INVENTORIES

Inventories are valued at lower of cost and net realizable value.

Cost is determined on first-in-first-out formula for all categories of inventories except stores and spare parts for which it is determined under weighted average formula.

Cost includes expenditure incurred in the normal course of business in bringing inventories to its present location, condition, labor and overheads, where applicable.

Inventories are written down for obsolete / slow-moving/ non-moving items, wherever necessary.

FOREIGN CURRENCY TRANSACTIONS AS APPLICABLE UNDER ACCOUNTING STANDARD 11 ON 'THE EFFECTS OF CHANGES IN FOREIGN EXCHANGE RATES'

Transactions in foreign currency are recorded at exchange rates prevailing on the date of the transaction. At the year- end, monetary assets and liabilities denominated in foreign currencies are restated at the year-end exchange rates. The resultant exchange differences arising from settlement of foreign currency transactions and from the year-end restatement are recognized in the Statement of Profit and Loss.

Premium or discount arising at the inception of a forward exchange contract entered into hedge an existing asset / liability is amortized as expense or income over the life of the contract. Exchange differences on such a contract are recognized in the Statement of Profit and Loss in the reporting period in which the exchange rates changed. Profit or loss arising on cancellation or renewal of forward contract is recognized as income or expense of the period.

DERIVATIVE CONTRACTS

In respect of derivative contracts (other than forward exchange contracts covered under Accounting Standard 11 on 'The Effects of Changes in Foreign Exchange Rates'), gains/losses on settlement and mark-to-market loss, if any, on outstanding contracts as at the Balance Sheet date are recognised in the Statement of Profit and Loss and mark-to-market gain, if any, on outstanding contracts as at the Balance Sheet date is ignored.

Refer Note on Foreign Currency Transactions above for forward exchange contracts covered under Accounting Standard 11 on 'The Effects of Changes in Foreign Exchange Rates'.

REVENUE

Revenue from sale of goods are recognized when the significant risks and rewards of ownership in the goods are transferred to the buyer as per the terms of the contract. It includes excise duty but excludes value added tax/sales tax, trade discounts, returns, as applicable.

BORROWING COSTS

Borrowing costs, if any, attributable to the acquisition and construction of qualifying assets (i.e., the assets that necessarily take a substantial period of time to get ready for their intended use) are added to the cost up to the date when such assets are ready for their intended use. Other borrowing costs are recognized as expense in the period in which these are incurred.

RESEARCH & DEVELOPMENT EXPENDITURE

Revenue expenditure on Research is expensed in the period in which it is incurred. Expenditure on Development is expensed / capitalized in compliance with the provisions of the Accounting Standard 26 on 'Intangible Assets'.

Notes to the Financial Statements

EMPLOYEE BENEFITS

(a) Short-term Employee Benefits

Short-term Employee Benefits (i.e. benefits falling due within one year after the end of the period in which employees render the related service) are recognized as expense in the period in which employee services are rendered as per the Company's scheme based on expected obligations on undiscounted basis.

(b) Post-employment Benefit Plans

Post-employment benefits comprise Provident Fund, Superannuation Fund, Gratuity, Pension and Retirement Benefits which are accounted for as follows:

i. Provident Fund - Certain employees of the Company receive provident fund benefits, which are administered by the Provident Fund Trust set up by the Company. Aggregate contributions along with interest thereon are paid at retirement, death, incapacitation or termination of employment. Both the employees and the Company make monthly contributions at specified percentage of the employees' salary to such Provident Fund Trust. The Company has an obligation to fund any shortfall in return on plan assets over the interest rates prescribed by the authorities from time to time. In view of the Company's obligation to meet the shortfall, this is a defined benefit plan. Actuarial valuation of the Company's liability under such scheme is carried out under the Projected Unit Credit (PUC) Method at the year end and the charge, if any, is recognized in the Statement of Profit and Loss. Actuarial gains/ losses are recognized immediately in the Statement of Profit and Loss as income/expense.

ii. Superannuation Fund - This is a defined contribution plan. The Company contributes a certain percentage of the eligible salary for employees covered under the scheme towards superannuation fund administered by the Trustees. The Company has no further obligations for future superannuation benefits other than its contributions and recognizes such contributions as expense in the period in which the related employee services are rendered.

iii. Gratuity - This is a defined benefit plan covering eligible employees. As per the scheme, the Gratuity Fund Trust administered by Trustees, makes payment to vested employees at retirement, death, incapacitation, or termination of employment, of an amount based on the respective employee's salary and the tenure of employment. Vesting occurs upon completion of five years of service. The liability is determined based on year-end actuarial valuation using PUC Method. Actuarial gains/losses are recognized immediately in the Statement of Profit and Loss as income/expense.

iv. Pension - The Company has discontinued the Defined Pension Benefit scheme with effect from 1st May 2009 and all the employees who were members of the erstwhile Defined Pension Benefit scheme has been brought under the Defined Contribution scheme for benefit provisions under the Pension plan. The present value of benefit obligation is actuarially determined at the end of each year by discounting the present value of crystallised pension as at 30th April 2009. Actuarial gains/ losses are recognised immediately in the Statement of Profit and Loss as income/expense.

v. Retirement Benefit - Liability accrued during the year in respect of retirement benefit payable to certain employees governed by agreement with the Union representing them are treated as a defined benefit plan. As per the scheme, a lump sum benefit is paid to the eligible employees on cessation of service with the Company. The Company's liability is actuarially determined using the PUC method at the end of each year. Actuarial gains/ losses are recognized immediately in the Statement of Profit and Loss as income/expense.

(c) Other Long-term Employee Benefits (unfunded)

The cost of providing other long-term employee benefits (Leave Encashment) is determined using Projected Unit Credit Method, with actuarial valuation being carried out at each Balance Sheet date. Actuarial gains and losses and past service cost are recognized immediately in the Statement of Profit and Loss for the period in which they occur. Other long-term employee benefit obligation recognized in the Balance Sheet represents the present value of related obligation.

(d) Terminal benefits are recognized as expense as and when incurred.

Notes to the Financial Statements

PROVISIONS AND CONTINGENT LIABILITIES

Provisions are recognized when there is a present obligation as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and there is a reliable estimate of the amount of the obligation. Provisions are measured at the best estimate of the expenditure required to settle the present obligation as at the Balance Sheet date and are not discounted to its present value.

A disclosure for contingent liabilities is made when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made.

TAXATION

Current tax represents the amount that otherwise would have been payable under the Income-Tax Act, 1961 had this financial year been reckoned as the basis for computation of tax payable under the prevailing taxation laws. (Also refer Note 29).

Deferred tax is provided on timing differences between taxable income and accounting income measured using tax rates and tax laws that have been enacted or substantively enacted by the Balance Sheet date.

Deferred tax assets are recognized only if there is a virtual / reasonable certainty, as applicable, in keeping with Accounting Standard 22 on 'Accounting for Taxes on Income' that there will be sufficient future taxable income available to realize such assets. Deferred tax assets are reviewed for the appropriateness of their respective carrying amount at each Balance Sheet date.

LEASES

Leases in which a significant portion of the risks and rewards of ownership are retained by the lesser are classified as operating leases. Payments made under operating leases are charged to the Statement of Profit and Loss on a straight- line basis over the period of lease.


Dec 31, 2014

Not Available.


Dec 31, 2013

BASIS OF PREPARATION

These financial statements have been prepared in accordance with the generally accepted accounting principles in India under the historical cost convention on accrual basis. These financial statements have been prepared to comply, in all material aspects, with the accounting standards notified under Section 211(3C) [Companies (Accounting Standards) Rules, 2006, as amended] and the other relevant provisions of the Companies Act, 1956 (the ''Act'').

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 the Schedule VI to the Act.

FIXED ASSETS

Fixed Assets are stated at cost of acquisition less accumulated depreciation/amortisation and accumulated impairment losses, if any.

Cost comprises cost of acquisition including non-refundable taxes/duties, freight and other incidental expenses related to acquisition and installation.

Subsequent expenditures related to an item of fixed asset (tangible or intangible) are added to its book value only if they increase the future benefits from the existing asset beyond its previously assessed standard of performance.

DEPRECIATION AND AMORTISATION

Depreciation on tangible fixed assets is provided over the estimated useful lives of the assets in accordance with Schedule XIV to the Act as under:

(i) On Plant and Machinery and Computers added during the period 1st November 1977 to 31st October 1987 on Straight Line Method, on the basis of specified period [within the meaning of Section 205(2)(b) of the Act] determined in the year of acquisition, at rates prescribed under the Income Tax Act, 1961 and rules framed thereunder, as was in force during the relevant financial year.

(ii) On Plant and Machinery added from 1st November 1987, on Straight Line Method at rates specified in Schedule XIV to the Act as existing at the time of capitalisation.

(iii) On Silos and Rollers included in Plant and Machinery added from 1st January 2006, on Straight Line Method @ 20%.

(iv) On Research Equipment added from 1st January 2003, on Straight Line Method @ 25%.

(v) On Air conditioners, on Written Down Value Method @ 13.91%.

(vi) On Computers added from 1st November 1987, on Straight Line Method @ 25%.

(vii) On all other assets, on Written Down Value Method, at rates specified in Schedule XIV to the Act.

(viii) All assets costing Rs 5,000 or less are fully depreciated in the year of additions.

(ix) In respect of assets acquired, sold or discarded during the period, prorated depreciation, for the period during which each such asset was in use, after rounding off part of the month to the whole month.

Leasehold land is amortised on straight-line basis over the lease period. Intangible assets (Computer Software) are amortised on a straight-line basis over a period of four years.

IMPAIRMENT

Assessment is done at each Balance Sheet date as to whether there is any indication that an asset (tangible and intangible) may be impaired.

An impairment loss, if any, is recognised wherever the carrying amount of the fixed assets exceeds the recoverable amount i.e. the higher of the assets'' net selling price and value in use.

After impairment, depreciation is provided on the revised carrying amount of the fixed asset over its remaining useful life.

INVESTMENTS

Investments that are readily realisable and are intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as long-term investments. Long-term investments are carried at cost less write down for any diminution, other than temporary, in carrying value.

INVENTORIES

Inventories are valued at lower of cost and net realisable value.

Cost is determined on first-in-first-out formula for all categories of inventories except stores and spare parts for which it is determined under weighted average formula.

Cost includes expenditure incurred in normal course of business in bringing inventories to its present location, condition, labour and overheads, where applicable.

Inventories are written down for obsolete / slow-moving/ non-moving items, wherever necessary.

FOREIGN CURRENCY TRANSACTIONS AS APPLICABLE UNDER ACCOUNTING STANDARD 11 ON ''THE EFFECTS OF CHANGES IN FOREIGN EXCHANGE RATES''

Transactions in foreign currency are recorded at exchange rates prevailing on the date of the transaction. At the year- end, monetary assets and liabilities denominated in foreign currencies are restated at the year-end exchange rates. The resultant exchange differences arising from settlement of foreign currency transactions and from the year-end restatement are recognised in the Statement of Profit and Loss.

Premium or discount arising at the inception of a forward exchange contract entered into to hedge an existing asset / liability is amortised as expense or income over the life of the contract. Exchange differences on such a contract are recognised in the Statement of Profit and Loss in reporting period in which the exchange rates changed. Profit or loss arising on cancellation or renewal of forward contract is recognised as income or expense of the period.

DERIVATIVE CONTRACTS

In respect of derivative contracts (other than forward exchange contracts covered under Accounting Standard 11 on ''The Effects of Changes in Foreign Exchange Rates''), gains/losses on settlement and mark-to-market loss, if any, on outstanding contracts as at the Balance Sheet date are recognised in the Statement of Profit and Loss and mark-to- market gain, if any, on outstanding contracts as at the Balance Sheet date is ignored.

Refer Note on Foreign Currency Transactions above for forward exchange contracts covered under Accounting Standard 11 on ''The Effects of Changes in Foreign Exchange Rates''.

REVENUE

Revenue from sale of goods are recognised when the substantial risks and rewards of ownership in the goods are transferred to the buyer as per the terms of the contract. It includes excise duty but excludes value added tax/sales tax, trade discounts, returns, as applicable.

BORROWING COSTS

Borrowing costs, if any, attributable to the acquisition and construction of qualifying assets (i.e., the assets that necessarily take a substantial period of time to get ready for their intended use) are added to the cost up to the date when such assets are ready for their intended use. Other borrowing costs are recognised as expense in the period in which these are incurred.

RESEARCH & DEVELOPMENT EXPENDITURE (R & D)

Revenue expenditure on R&D is expensed in the period in which it is incurred. Capital expenditure on Development is capitalised on compliance with the provisions of the Accounting Standard 26 on ''Intangible Assets''

EMPLOYEE BENEFITS

(a) Short-term Employee Benefits

Short term Employee Benefits (i.e. benefits falling due within one year after the end of the period in which employees render the related service) are recognised as expense in the period in which employee services are rendered as per the Company''s scheme based on expected obligations on undiscounted basis.

(b) Post-Employment Benefit Plans

Post-employment benefits comprise of Provident Fund, Superannuation Fund, Gratuity, Pension and Retirement Benefits which are accounted for as follows:

i. Provident Fund - Certain employees of the Company receive provident fund benefits, which are administered by the Provident Fund Trust set up by the Company. Aggregate contributions along with interest thereon are paid at retirement, death, incapacitation or termination of employment. Both the employees and the Company make monthly contributions at specified percentage of the employees'' salary to such Provident Fund Trust. The Company has an obligation to fund any shortfall in return on plan assets over the interest rates prescribed by the authorities from time to time. In view of the Company''s obligation to meet the shortfall, this is a defined benefit plan. Actuarial valuation of the Company''s liability under such scheme is carried out under the Projected Unit Credit (PUC) Method at the year end and the charge/ gain, if any, is recognized in the Statement of Profit and Loss. Actuarial gains/ losses are recognised immediately in the Statement of Profit and Loss as income/expense.

ii. Superannuation Fund - This is a defined contribution plan. The Company contributes a certain percentage of the eligible salary for employees covered under the scheme towards superannuation fund administered by the Trustees. The Company has no further obligations for future superannuation benefits other than its contributions and recognizes such contributions as expense in the period in which the related employee services are rendered.

iii. Gratuity - This is a defined benefit plan covering eligible employees. As per the scheme, the Gratuity Fund Trust administered by trustees, makes payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee''s salary and the tenure of employment. Vesting occurs upon completion of five years of service. The liability is determined based on year-end actuarial valuation using PUC Method. Actuarial gains/losses are recognised immediately in the Statement of Profit and Loss as income/expense.

iv. Pension - The Company has discontinued the Defined Pension Benefit scheme with effect from 1st May 2009 and all the employees who were member of the erstwhile Defined Pension Benefit scheme has been brought under the Defined Contribution scheme for benefit provisions under the Pension plan. The present value of benefit obligation is actuarially determined using the PUC method at the end of each year by discounting the present value of crystallised pension as at 30th April 2009. Actuarial gains/ losses are recognised immediately in the Statement of Profit and Loss as income/expense.

v. Retirement Benefit - Liability accrued during the year in respect of retirement benefit payable to certain employees governed by agreement with the Union representing them are treated as a defined benefit plan. As per the Scheme, a lump sum benefit is paid to the eligible employees on cessation of service with the Company. The Company''s liability is actuarially determined using the PUC method at the end of each year. Actuarial gains/ losses are recognised immediately in the Statement of Profit and Loss as income/expense.

(c) Other Long-term Employee Benefits (unfunded)

The cost of providing other Long-term Employee Benefits (Leave Encashment) is determined using Projected Unit Credit Method, with actuarial valuation being carried out at each Balance Sheet date. Actuarial gains/losses and past service cost are recognised immediately in the Statement of Profit and Loss for the period in which they occur. Other Long-term Employee Benefit obligation recognised in the Balance Sheet represents the present value of related obligation.

(d) Terminal benefits are recognised as expense as and when incurred.

PROVISIONS AND CONTINGENT LIABILITIES

Provisions are recognised when there is a present obligation as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and there is a reliable estimate of the amount of the obligation. Provisions are measured at the best estimate of the expenditure required to settle the present obligation as at the Balance Sheet date and are not discounted to its present value.

A disclosure for contingent liabilities is made when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made.

TAXATION

Current tax represents the amount that otherwise would have been payable under the Income Tax Act, 1961 had this financial year been reckoned as the basis for computation of tax payable under the prevailing taxation laws (also refer Note 29).

Deferred tax is provided on timing differences between taxable income and accounting income measured using tax rates and tax laws that have been enacted or substantively enacted by the Balance Sheet date.

Deferred tax assets are recognised only if there is a virtual / reasonable certainty, as applicable, in keeping with Accounting Standard 22 on ''Accounting for Taxes on Income'' that there will be sufficient future taxable income available to realise such assets. Deferred tax assets are reviewed for the appropriateness of their respective carrying amount at each Balance Sheet date.

LEASES

Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to the Statement of Profit and Loss on a straight-line basis over the period of lease.


Dec 31, 2012

ACCOUNTING CONVENTION

The financial statements are prepared to comply in all material aspects with all the applicable accounting principles in India, the applicable Accounting Standards notified under Section 211 (3C) of the Companies Act, 1956 and the relevant provisions of the Companies Act, 1956.

Basis of Accounting

Financial statements are prepared in accordance with the historical cost convention.

All assets and liabilities have been classified as current and non-current as per Company''s normal operating cycle and other criteria set in revised Schedule VI to the Companies Act, 1956 based on the nature of products and the time between the acquisition of assets for processing and the realization in cash and cash equivalents.

TANGIBLE ASSETS

- Fixed assets are stated at their original cost (including cost incidental to acquisition) less depreciation.

- Loss on scrapping of Fixed Assets and profit or losses on sale of Fixed Assets are included in the Statement of Profit and Loss and calculated as the difference between the value realized and the book value.

Depreciation is provided in accordance with Section 205 read with Schedule XIV to the Companies Act, 1956(Act), in the following manner:

(i) On Plant and Machinery and Computers added during the period 1st November 1977 to 31st October 1987 on Straight Line Method, on the basis of specified period (within the meaning of Section 205(2)(b) of the Act) determined in the year of acquisition, at rates prescribed under the Income Tax Act, 1961 and rules framed thereunder, as was in force during the relevant financial year.

(ii) On Plant and Machinery added from 1st November 1987, on Straight Line Method at rates specified in Schedule XIV to the Act as existing at the time of capitalisation.

(iii) On Silos and Rollers included in Plant and Machinery added from 1st January 2006, on Straight Line Method @ 20%.

(iv) On Research Equipment added from 1 st January 2003, on Straight Line Method @ 25%.

(v) On Air conditioners, on WrittenDown Value Method@ 13.91%.

(vi) On Computers added from 1 st November 1987, on Straight Line Method @ 25%.

(vii) On all other assets, on Written Down Value Method, at rates specified in Schedule XIV to the Act.

(viii) All assets costing Rs 5,000 or less are fully depreciated in the year of additions.

(ix) In respect of assets acquired, sold or discarded during the period, prorated depreciation, for the period during which each such asset was in use, after rounding off part of the month to the whole month.

(x) Leasehold land is amortized over the period of the lease and freehold land is not depreciated.

Cash generating units/assets are assessed for possible impairment at Balance Sheet dates based on external and internal sources of information. Impairment loses, if any, is recognised as an expense in the Statement of Profit and

INTANGIBLE ASSETS

Intangible assets (not internally generated) are recognised only when future economic benefits attributable to the assets will flow to the enterprises and cost can be measured reliably and are being amortized in equal instalments over its useful life of four years.

ASSETS ACQUIRED UNDER LEASE

For assets acquired under operating lease, rentals payable are charged to the Statement Profit and Loss.

INVENTORIES

Inventories are valued at the lower of cost and net realizable value.

Cost comprise of all cost of purchase and other cost incurred in bringing the inventories to their present location and condition. In determining the cost, the FIFO method is used for all categories of inventories except Stores and Spare parts.

In respect of finished goods / intermediates, cost includes relevant overheads calculated on bases appropriate to the business carried on by the Company.

Stores and Spare parts are valued at weighted average cost.

INVESTMENTS

Long term investments are stated at cost, and where applicable, provision is made against diminution in value. Profit or Loss on sale of investment are included in the Statement of Profit and Loss and calculated as the difference between the net proceeds realised and the book value. Dividends are accounted for in the year in which it is received.

EMPLOYEE BENEFITS

a) Contribution to Superannuation Fund are recognized in the Statement of Profit and Loss on accrual basis.

Contribution to Superannuation scheme are made to a separate fund administered by an Insurance Company.

b) Defined Benefit Plan-

i. Gratuity - The Company provides for Gratuity, a Defined Benefit plan covering the eligible employees in accordance with the Payment of Gratuity Act, 1972 .The Company''s liability is actuarially determined using the Projected Unit Credit (PUC) method at the end of each year.

ii. Pension - The Company has discontinued the Defined Pension Benefit scheme with effect from 1 st May 2009 and all the employees who were erstwhile member of the Defined Pension benefit scheme has been brought under the Defined Contribution scheme for benefit provisions under the Pension plan. The present value of benefit obligation is actuarially determined using the PUC method at the end of each year by discounting the present value of crystallized pension as at 30th April 2009.

iii. Retirement Benefit - Liability accrued during the year in respect of retirement/ terminal benefit payable to certain employees governed by agreement with the Union representing them are treated as a defined benefit plan . The Company''s liability is actuarially determined using the PUC method at the end of each year.

iv. Leave Encashment - Liability accrued upto the close of the year for encashment of leave not availed by certain categories of employees as stipulated in their respective terms of employment are treated as a defined benefit plan. The Company''s liability is actuarially determined using the PUC method at the end of each year.

v. Trust Administered Provident Fund — Provident fund contributions are made to a Trust administered by the Company. The interest rate payable to the members of the Trust are not lower than the statutory rate of interest declared by the Central Government. Any interest shortfall are actuarially determined using the . deterministic method at the end of the year and provided for in the accounts, however contribution for the shortfall are made good by the Company on a year to year basis.

Acturial gains and losses are recognized in the Statement of Profit & Loss in the year in which they arise.

c) As per service rules, part of the leave accrued during the year, which cannot be accumulated are accounted for on accrual basis and charged to Statement of Profit and Loss as short term benefit.

d) Terminal benefits are recognized as expense as and when incurred.

SALES

Sales are recognized when goods are supplied in accordance with the terms of the sale and are inclusive of Excise Duty and net of turnover discount.

TRANSACTIONS IN FOREIGN CURRENCIES

Transactions in foreign currencies are accounted for in the following manner:

(a) In case of forward exchange contract the premium or discount arising at the inception of such contract is amortized as expense or income over the life of the contract. Exchange differences on such a contract are recognised in the Statement of Profit and Loss in reporting period in which the exchange rates changed. Profit or loss arising on cancellation or renewal of forward contract is recognised as income or expense of the period.

(b) Foreign currency transactions not covered by forward exchange contracts are accounted for at exchange rates prevailing at the date of the transaction. Gains / losses arising from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies are recognised in the Statement of Profit and Loss.

BORROWING COST

Borrowing costs that are directly attributable to the acquisition or construction of a qualifying asset that necessarily takes a substantial period of time to get ready for its intended use are capitalised till substantial completion of all the activities that are necessary for this purpose. Other borrowing costs are charged to revenue.

ACCOUNTING FOR TAXES ON INCOME

Current Tax represents the amount that otherwise would have been payable under the Income Tax Act, 1961 had this financial year been reckoned as the basis for computation of tax payable under the prevailing taxation laws.

Deferred Tax is recognised, subject to the consideration of prudence, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets are not recognised unless there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised.

RESEARCH AND DEVELOPMENT

Revenue expenditure incurred on Research and Development is charged to revenue. Capital expenditure incurred for Research and Development is included under Fixed Assets


Dec 31, 2011

FIXED ASSETS

- Fixed assets are stated at their original cost (including cost incidental to acquisition) less depreciation.

- Loss on scrapping of Fixed Assets and profit or loss on sale of Fixed Assets are included in the Profit & Loss Account and calculated as the difference between the value realized and the book value.

Depreciation is provided in accordance with Section 205 read with Schedule XIV to the Companies Act, 1956 (Act), in the following manner:

(i) On Plant and Machinery and Computers added during the period 1st November 1977 to 31st October 1987 on Straight Line Method, on the basis of specified period (within the meaning of Section 205(2)(b) of the Act) determined in the year of acquisition, at rates prescribed under the Income Tax Act, 1961 and Rules framed thereunder, as was in force during the relevant financial year.

(ii) On Plant and Machinery added from 1st November 1987, on Straight Line Method at rates specified in Schedule XIV to the Act as existing at the time of capitalisation.

(iii) On Silos and Rollers included in Plant and Machinery added from 1st January 2006, on Straight Line Method @20%.

(iv) On Research Equipment added from 1st January 2003, on Straight Line Method @25%.

(v) On Air conditioners, on Written Down Value Method @ 13.91%.

(vi) On computers added from 1st November 1987, on Straight Line Method @25%.

(vii) On all other assets, on Written Down Value Method, at rates specified in Schedule XIV to the Act.

(viii) All assets costing Rs 5,000 or less are fully depreciated in the year of additions.

(ix) In respect of assets acquired, sold or discarded during the period, prorated depreciation, for the period during which each such asset was in use, after rounding off part of the month to the whole month.

(x) Leasehold land is amortized over the period of the lease and freehold land is not depreciated.

Cash generating units/assets are assessed for possible impairment at balance sheet dates based on external and internal sources of information. Impairment loses, if any, recognised as an expense in the Profit & Loss Account.

INTANGIBLE ASSETS

Intangible Assets (not internally generated) are recognised only when future economic benefits attributable to the assets will flow to the enterprises and cost can be measured reliably and are being amortized in equal installments over its useful life of four years.

ASSETS ACQUIRED UNDER LEASE

For assets acquired under operating lease, rentals payable are charged to Profit & Loss Account.

INVENTORIES

Inventories are valued using weighted average cost formula and are valued at the lower of cost and net realizable value.

In respect of finished goods, cost, which comprises of expenditure incurred in the normal course of business in bringing inventories to their location and condition including relevant overheads, is calculated on basis appropriate to the business carried on by the Company. Excise duty payable on finished goods lying in the factory of manufacture are included in the value of closing stock after creating suitable provision for the liability. In respect of Intermediates, cost includes attributable production overheads.

Cost for raw material includes expenditure incurred in the normal course of business in bringing inventories to their present location. Customs Duty payable for materials cleared from port but kept in bonded warehouse are included in the value of closing stock after creating suitable provision for liability.

INVESTMENT

Long term investments are stated at cost, and where applicable, provision is made against diminution in value. Profit or loss on sale of investment are included in the Profit & Loss Account and calculated as the difference between the net proceeds realised and the book value. Dividends are accounted for in the year in which they are received.

RETIREMENT/TERMINAL BENEFITS

a) Contribution to Superannuation and Provident Fund Schemes are recognized in the Profit & Loss Account on accrual basis. Provident Fund contributions are made to a Trust administered by the Company. The interest rate payable to the members of the Trust is not lower than the statutory rate of interest declared by the Central Government. Contribution for the shortfall is made good by the Company on a year to year basis. Contribution to Superannuation Scheme is made to a separate fund administered by Insurance Company.

b) The following Defined Benefit Plans are provided for based on valuations as at the Balance Sheet date, made by independent actuaries:

i. Liability for Gratuity.

ii. Expected annual cost of providing pension to management staff as per respective conditions of their employment.

iii. Liability accrued during the year in respect of retirement/terminal benefit payable to certain employees governed by agreement with the Union representing them.

iv. Liability accrued up to the close of the year for encashment of leave not availed by the management staff as stipulated in their respective terms of employment.

c) Actuarial gains or losses are charged to Profit & Loss Account.

d) As per service rules, part of the leave accrued during the year, which cannot be accumulated are accounted for on accrual basis and charged to Profit & Loss Account as short term benefit.

e) Terminal benefits are recognized as expense as and when incurred.

SALES

Sales are recognized when goods are supplied in accordance with the terms of the sale and are inclusive of excise duty and net of turnover discount. *"

TRANSACTIONS IN FOREIGN CURRENCIES

Transactions in foreign currencies are accounted for in the following manner:

(a) In case of forward exchange contract, the premium or discount arising at the inception of a such contract is amortized as expense or income over the life of the contract. Exchange differences on such a contract are recognised in the statement of Profit & Loss in reporting period in which the exchange rates changed. Profit or loss arising on cancellation or renewal of forward contract is recognised as income or expense of the period.

(b) Foreign currency transactions not covered by forward exchange contracts are accounted for at exchange rates prevailing at the date of the transaction. Gains/losses arising from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies are recognised in the Profit & Loss Account

BORROWING COST

Borrowing costs that are directly attributable to the acquisition or construction of a qualifying asset that necessarily takes a substantial period of time to get ready for its intended use are capitalised till substantial completion of all the activities that are necessary for this purpose. Other borrowing costs are charged to revenue.

ACCOUNTING FOR INCOME TAX

Current Tax represents the amount that otherwise would have been payable under the Income Tax Act, 1961 had this financial year been reckoned as the basis for computation of tax payable under the prevailing taxation laws.

Deferred Tax is recognised, subject to the consideration of prudence, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred Tax assets are not recognised unless there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised.

RESEARCH AND DEVELOPMENT

Revenue expenditure incurred on Research and Development is charged to revenue. Capital expenditure incurred for Research and Development is included under Fixed Assets.


Dec 31, 2010

ACCOUNTING CONVENTION

The financial statements are prepared to comply in all material aspects with all the applicable accounting principles in India, the applicable Accounting Standards notified under Section 21K3C) of the Companies Act, 1956 and the relevant provisions of the Companies Act, 1956.

FIXED ASSETS

- Fixed Assets are stated at their original cost (including cost incidental to acquisition) less depreciation.

- Loss on scrapping of Fixed Assets and profit or losses on sale of Fixed Assets are included in the Profit & Loss Account and calculated as the difference between the value realized and the book value.

Depreciation is provided in accordance with Section 205 read with Schedule XIV to the Companies Act, 1956(Act), in the following manner:

(i) On Plant and Machinery and Computers added during the period 1st November, 1977 to 31st October, 1987 on Straight Line Method, on the basis of specified period (within the meaning of Section 205(2)(b) of the Act) determined in the year of acquisition, at rates prescribed under the Income Tax Act, 1961 and Rules framed thereunder, as was in force during the relevant financial year.

(ii) On Plant and Machinery added from 1st November, 1987, on Straight Line Method at rates specified in Schedule XIV to the Act as existing at the time of capitalisation.

(iii) On Silos and Rollers included in Plant and Machinery added from 1st January, 2006, on Straight Line Method @ 20%.

(iv) On Research Equipment added from 1st January, 2003, on Straight Line Method @ 25%.

(v) On Air conditioners, on Written Down Value Method @ 13.91%).

(vi) On computers added from 1st November, 1987, on Straight Line Method @ 25%).

(vii) On all other assets, on Written Down Value Method, at rates specified in Schedule XIV to the Act.

(viii) All assets costing Rs.5,000 or less are fully depreciated in the year of additions.

(ix) In respect of assets acquired, sold or discarded during the period, prorated depreciation, for the period during which each such asset was in use, after rounding off part of the month to the whole month.

(x) Leasehold land is amortized over the period of the lease and freehold land is not depreciated. Cash generating units/assets are assessed for possible impairment at balance sheet dates based on external and internal sources of information. Impairment loses, if any, recognised as an expense in the Profit and Loss Account.

INTANGIBLE ASSETS

Intangible Assets (not internally generated) are recognised only when future economic benefits attributable to the assets will flow to the enterprises and cost can be measured reliably and are being amortized in equal instalments over its useful life of four years.

ASSETS ACQUIRED UNDER LEASE

For Assets acquired under operating lease, rentals payable are charged to Profit & Loss Account.

INVENTORIES

Inventories are valued using weighted average cost formula and are valued at the lower of cost and net realizable value.

In respect of finished goods, cost, which comprises of expenditure incurred in the normal course of business in bringing inventories to their location and condition including relevant overheads, is calculated on bases appropriate to the business carried on by the Company. Excise Duty payable on finished goods lying in the factory of manufacture are included in the value of closing stock after creating suitable provision for the liability.

In respect of Intermediates cost includes attributable production overheads.

Cost for raw material includes expenditure incurred in the normal course of business in bringing inventories to their present location. Customs Duty payable for materials cleared from port but kept in bonded warehouse are included in the value of closing stock after creating suitable provision for liability.

INVESTMENTS

Long term investments are stated at cost, and where applicable, provision is made against diminution in value. Profit or Loss on sale of investment are included in the Profit & Loss Account and calculated as the difference between the net proceeds realised and the book value. Dividends are accounted for in the year in which it is received.

RETIREMENT/TERMINAL BENEFITS

(i) Contribution to defined contribution plans like Superannuation and Provident Fund Schemes are recognized in the Profit & Loss account on accrual basis. Provident fund contributions are made to a Trust administered by the Company. The interest rate payable to the members of the trust are not lower than the statutory rate of interest declared by the Central Government and shortfall, if any, is made good by the Company. Contribution to Superannuation Scheme is made to a separate fund administered by an Insurance Company.

(if) The following defined benefit plans are provided for based on valuations, as at the Balance Sheet date, made by independent actuaries:

(a) Liability for Gratuity;

(b) expected annual cost of providing pension to management staff as per respective conditions of their employment;

(c) liability accrued during the year in respect of retirement/terminal benefit payable to certain employees governed by agreement with the Union representing them;

Cd) liability accrued upto the close of the year for encashment of leave not availed by the management staff as stipulated in their respective terms of employment.

(iii) Actuarial gains or losses are charged to Profit & Loss Account.

(iv) As per service rules, part of the leave accrued during the year, which cannot be accumulated are accounted for on accrual basis and charged to Profit & Loss Account as short term benefit.

(v) Terminal Benefits are recognized as expenses as and when incurred.

SALES

Sales are recognized when goods are supplied in accordance with the terms of the sale and are inclusive of Excise Duty and net of turnover discount.

TRANSACTIONS IN FOREIGN CURRENCIES

Transactions in foreign currencies are accounted for in the following manner:

(i) In case of forward exchange contract the premium or discount arising at the inception of a such contract is amortized as expense or income over the life of the contract. Exchange differences on such a contract are recognised in the statement of Profit & Loss Account in reporting period in which the exchange rates changed. Profit or loss arising on cancellation or renewal of forward contract is recognised as income or expense of the period.

(ii) Foreign currency transactions not covered by forward exchange contracts are accounted for at exchange rates prevailing at the date of the transaction. Gains/Losses arising from the settlement of such transactions and from the translation of monetary Assets and Liabilities denominated in foreign currencies are recognised in the Profit & Loss Account.

BORROWING COSTS

Borrowing Costs that are directly attributable to the acquisition or construction of a qualifying asset that necessarily takes a substantial period of time to get ready for its intended use are capitalised till substantial completion of all the activities that are necessary for this purpose. Other borrowing costs are charged to revenue.

ACCOUNTING FOR INCOME TAX

Current Tax represents the amount that otherwise would have been payable under the Income Tax Act, 1961 had this financial year been reckoned as the basis for computation of tax payable under the prevailing taxation laws.

Deferred Tax is recognised, subject to the consideration of prudence, on timing differences, 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 are not recognised unless there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised.




Dec 31, 2009

ACCOUNTING CONVENTION

The financial statements are prepared to comply in all material aspects with all the applicable accounting principles in India, the applicable Accounting Standards notified under Section 211(3C) of the Companies Act, 1956 and the relevant provisions of the Companies Act, 1956.

FIXED ASSETS

- Fixed assets are stated at their original cost (including cost incidental to acquisition) less depreciation.

- Loss on scrapping of Fixed Assets and profit or losses on sale of Fixed Assets are included in the Profit & Loss Account and calculated as the difference between the value realized and the book value.

Depreciation is provided in accordance with Section 205 read with Schedule XIV of the Companies Act, 1956 (Act), in the following manner:

(i) On Plant and Machinery and Computers added during the period 01.11.1977 to 31-10.1987 on Straight Line Method, on the basis of specified period (within the meaning of Section 205(2)(b) of the Act) determined in the year of acquisition, at rates prescribed under the Income Tax Act, 1961 and rules framed thereunder, as was in force during the relevant financial year.

(ii) On Plant and Machinery added from 01.11.1987, on Straight Line Method at rates specified in Schedule XIV of the Act as existing at the time of capitalisation.

(iii) On Silos included in Plant and Machinery added from 01.01.2006, on Straight Line Method @ 20%.

(iv) On Research Equipment added from 01.01.2003, on Straight Line Method @ 25%.

(v) On Airconditioners, on Written Down Value Method @ 13-91%.

(vi) On Computers added from 01.11.1987, on Straight Line Method @ 25%).

(vii) On all other assets, on Written Down Value Method, at rates specified in Schedule XIV to the Act.

(viii) All Assets costing Rs.5,000 or less are fully depreciated in the year of additions.

(ix) In respect of assets acquired, sold or discarded during the period, prorated depreciation, for the period during which each such asset was in use, after rounding off part of the month to the whole month.

(x) Leasehold Land is amortized over the period of Lease and Freehold Land is not depreciated.

Cash generating units/assets are assessed for possible impairment at balance sheet dates based on external and internal sources of information. Impairment loses, if any, recognised as an expense in the Profit & Loss Account.

EVTANGIBLE ASSETS

Intangible Assets are recognised only when future economic benefits attributable to the assets will flow to the enterprises and cost can be measured reliably and are being amortized in equal instalments over its useful life of four years.

ASSETS ACQUIRED UNDER LEASE

For assets acquired under operating lease, rentals payable are charged to Profit & Loss Account.

INVENTORIES

Inventories are valued using weighted average cost formula and are valued at the lower of cost and net realizable value.

In respect of finished goods, cost, which comprises of expenditure incurred in the normal course of business in bringing inventories to their location and condition including relevant overheads, is calculated on bases appropriate to the business carried on by the Company. Excise Duty payable on finished goods lying in the factory of manufacture are included in the value of Closing Stock after creating suitable provision for the liability.

In respect of Intermediates Cost includes attributable production overheads.

Cost for raw materials include expenditure incurred in the normal course of business in bringing inventories to their present location. Customs Duty payable for materials cleared from port but kept in bonded warehouse are included in the value of Closing Stock after creating suitable provision for liability.

INVESTMENTS

Long term investments are stated at cost, and where applicable, provision is made against diminution in value. Profit or Loss on sale of investment are included in the Profit & Loss Account and calculated as the difference between the net proceeds realised and the book value. Dividend is accounted for in the year in which it is received.

RETIREMENT/TERMINAL BENEFITS

(i) Contribution to Defined Contribution Superannuation Scheme and Provident Fund are recognized in the Profit & Loss Account on accrual basis. Provident Fund Contributions are made to a Trust administered by the Company. The interest rate payable to the members of the trust are not lower than the statutory rate of interest declared by the Central Government and shortfall, if any, shall be made good by the Company. Contribution to Superannuation Scheme are made to a separate fund administered by an Insurance Company.

(ii) The following are the defined benefit obligation and are provided for based on valuations, as at the Balance Sheet date, made by independent actuaries:

a) liability for Gratuity

b) expected annual cost of providing pension to management staff as per respective conditions of their employment.

c) liability accrued during the year in respect of retirement/terminal benefit payable to certain employees governed by agreement with the Union/representing them.

d) liability accrued upto the close of the year for encashment of leave not availed by the management staff as stipulated in their respective terms of employment.

iii) Actuarial gains or losses are charged to Profit & Loss Account.

iv) As per service rules, part of the leave accrued during the year are accounted for on accrual basis and charged to Profit & Loss Account as a short term benefit.

v) Terminal Benefits are recognized as expenses as and when incurred.

SALES

Sales are recognized when goods are supplied in accordance with the terms of the sale and are inclusive of excise duty and net of turnover discount.

TRANSACTIONS IN FOREIGN CURRENCIES

Transactions in foreign currencies are accounted for in the following manner:

(i) In case of forward exchange contract the premium or discount arising at the inception of a such contract is amortized as expense or income over the life of. the contract. Exchange differences on such a contract are recognised in the statement of Profit & Loss in reporting period in which the exchange rates changed. Profit or loss arising on cancellation or renewal of forward contract is recognised as income or expense of the period.

(ii) Foreign currency transactions not covered by forward exchange contracts are accounted for at exchange rates prevailing at the date of the transaction. Gains/losses arising from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies are recognised in the Profit & Loss Account.

BORROWING COSTS

Borrowing Costs that are directly attributable to the acquisition or construction of a qualifying asset that necessarily takes a substantial period of time to get ready for its intended use are capitalised till substantial completion of all the activities that are necessary for this purpose. Other borrowing costs are charged to revenue.

ACCOUNTING FOR INCOME TAX

Current Tax represents the amount that otherwise would have been payable under the Income Tax Act, 1961 had this financial year been reckoned as the basis for computation of tax payable under the prevailing taxation laws.

Deferred Tax is recognised, subject to the consideration of prudence, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets are not recognised unless there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised.

 
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