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Accounting Policies of Foods & Inns Ltd. Company

Mar 31, 2018

1. Significant Accounting Policies

1.1 Basis of Preparation

The standalone financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) as per the Companies (Indian Accounting Standards) Rules, 2015 as amended and notified under Section 133 of the Companies Act 2013 (the “Act”) and other relevant provisions of the Act. In accordance with proviso to Rule 4A of The Companies (Accounts) Rules, 2014, the terms used in these financial statements are in accordance with the definition and other requirements specified in the applicable Accounting Standards.

For all period''s upto and including the financial year ended March 31, 2017, the Company prepared its standalone financial statements in accordance with the Accounting Standards notified under Companies (Accounting Standards) Rules, 2006 (as amended) (“previous GAAP”) and other relevant provisions of the Act. The figures for the year ended March 31, 2017 have now been restated as per Ind AS to provide comparability.

The standalone financial statements for the year ended March 31, 2018 are the Company''s first Ind AS standalone financial statements.

These standalone financial statements have been prepared on an accrual basis under the historical cost convention or amortization cost basis except for the following assets and liabilities, which have been measured at fair value:

i. Certain financial assets and liabilities (including derivative instruments) that are measured at fair value.

ii. Defined benefits plans-plan assets measured at fair value, and

iii. Assets held for sale measured at fair value less cost to sell

Refer note no. 47 for an explanination of how the transition from previous GAAP to Ind AS has affected the Company''s financial position, financial performance and cash flow. The date of transition to Ind AS is April 1, 2016.

The standalone financial statements are presented in Indian Rupees (INR), which is also the Company''s functional currency and all amounts are rounded off to the nearest Lakhs (INR ‘00,000) upto two decimals, except when otherwise indicated.

2.2 Current versus non-current classification

The Company presents its assets and liabilities in the Balance Sheet based on current / non-current classification. An asset is treated as current if it is :

a) expected to be realised or intended to be sold or consumed in normal operating cycle;

b) held primarily for the purpose of trading;

c) expected to be realised within twelve months after the reporting period; or

d) the cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

All other assets are classified as non-current.

A liability is current when :

a) it is expected to be settled in normal operating cycle;

b) it is held primarily for the purpose of trading;

c) it is due to be settled within twelve months after the reporting period; or

d) there is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.

All other liabilities are classified as non-current.

Deferred tax assets and liabilities are classified as non-current on net basis.

The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents.

The Company has identified twelve months as its normal operating cycle.

2.3 Property, Plant and Equipment

Property, Plant and Equipment is recognised when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. Property, Plant and Equipment stated at cost less accumulated depreciation and accumulated impairment losses, if any. The initial cost of an asset comprises its purchase price, non-refundable purchase taxes and any costs directly attributable to bringing the asset into the location and condition necessary for it to be capable of operating in the manner intended by management, the initial estimate of any decommissioning obligation, if any, and, for assets that necessarily take a substantial period of time to get ready for their intended use, finance costs. The purchase price is the aggregate amount paid and the fair value of any other consideration given to acquire the asset.

If significant parts of an item of Property, Plant and Equipment have different useful lives, then those are accounted as separate items (major components) of Property, Plant and Equipment. The carrying amount of any component accounted as a separate asset is derecognized when replaced. All other repairs and maintenance are charged to Statement of Profit or Loss during the reporting period in which they are incurred.

Store and spares which meets the definition of Property, Plant and Equipment and satisfy the recognition criteria as per Ind As 16 are capilaised as Property, Plant and Equipment.

Freehold land is carried at historical cost less impairment loss, if any.

The carrying amount of an item of Property, Plant and Equipment is de-recognised upon disposal or when no future economic benefit is expected to arise from its continued use. Any gain or loss arising on the de-recognition of an item of Property, Plant and Equipment is determined as the difference between the net disposal proceeds and the carrying amount of the item and is recognised in Statement of Profit or Loss.

Capital Work-in-progress

Property, plant and equipment which are not ready for intended use on the date of Balance Sheet are disclosed as capital work-in-progress. It is carried at cost, less any recognised impairment loss. Such properties are classified and capitalised to the appropriate categories of Property, Plant and Equipment when completed and ready for intended use. Depreciation of these assets, on the same basis as other property assets, commences when the assets are ready for their intended use.

2.4 Depreciation

Depreciation on Property, Plant and Equipment is provided on the Straight-Line Method in accordance with requirements prescribed under Schedule II to the Act. The Company has assessed the estimated useful lives of its Property, Plant and Equipment and has adopted the useful lives and residual value as prescribed therein except for Land on finance lease which is amortised over the period of lease.

Freehold land is not depreciated.

The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, and changes, if any, are accounted prospectively.

Depreciation for assets purchased/sold during the period is charged on a pro-rata basis.

Items of Property, Plant and Equipment costing up to Rs.5,000 are fully depreciated in the year of purchase/capitalisation.

The Company depreciates significant components of the main asset (which have different useful lives as compared to the main asset) based on the individual useful life of those components. Useful life for such components of Property, Plant and Equipment is assessed based on the historical experience and internal technical inputs.

2.5 Intangible Assets and Amortisation

Intangible assets acquired separately are measured on initial recognisation at cost. Following initial recognistion, intangible assets are stated at acquisition cost, net of accumulated amortisation and accumulated impairment losses, if any. Intangible assets with finite useful lives are amortised on straight line basis over their economic useful life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The estimated useful life and amortisation method are reviewed at the end of each reporting period, and any changes, if any, are accounted prospectively. Gain or loss arising from de-recognition of an intangible are recognized in Statement of Profit or Loss when asset is derecognized.

2.6 Impairment of assets

At the end of each reporting period, the Company reviews the carrying amounts of its tangible, intangible assets, investment in subsidiaries ard associate to determine whether there is any indication that those assets may be impaired and also whether there is any indication of reversal of impairment loss recognized in previous periods. If any such indication exists, the recoverable amount is estimated, and impairment loss, if any, is recognised and the carrying amount is reduced to its recoverable amount. Recoverable amount is the higher of the value in use or fair value less cost to sell, of the asset or cash generating unit, as the case may be. Recoverable amount is determined for individual assets, unless asset does not generate cash inflows that are largely independent of those from other assets or group of assets. When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash generating unit to which the asset belongs.

In assessing the value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

An impairment loss is recognised immediately in the Statement of Profit or Loss. When impairment subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but upto the amount that would have been determined, had no impairment loss been recognized for that asset or cash generating unit. A reversal of an impairment loss is recognised immediately in the Statement of Profit or Loss.

2.7 Inventories

Inventories comprise all costs of purchase, conversion and other costs incurred in bringing the inventories to their present location and condition.

Raw materials, fuels, stores and spares and components which are not considered as Property, Plant and Equipment, are valued at lower of cost and net realisable value. Cost is determined on the basis of the first-in-first out basis. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost.

Cost of Finished Goods consists of direct materials, labour and other direct cost and a proportion of manufacturing overheads based on normal operating capacity. Excise duty is accounted for at the point of manufacture of goods, accordingly, is considered for valuation of finished goods stock lying in the factories and depots as on balance Sheet date.

Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.

Stock of materials sold by one unit to other is works/ factory costs of the transferor unit/ division, plus transport and other charges.

2.8 Financial Instruments

Financial assets and Financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instruments.

Initial Recognition:

Financial assets and Financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at Fair Value through Profit or Loss and ancillary costs related to borrowings) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised in the Statement of Profit or Loss.

Classification and Subsequent Measurement: Financial Assets

The Company classifies financial assets as subsequently measured at amortised cost, fair value through other comprehensive income (FVTOCI) or fair value through profit or loss (FVTPL) on the basis of following:

- the entity''s business model for managing the financial assets; and

- the contractual cash flow characteristics of the financial assets.

Amortised Cost:

A financial asset shall be classified and measured at amortised cost, if both of the following conditions are met:

- the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows, and

- the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

FVTOCI:

A financial asset shall be classified and measured at FVTOCI, if both of the following conditions are met:

- the financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets, and

- the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

FVTPL:

A financial asset shall be classified and measured at FVTPL unless it is measured at amortised cost or at FVTOCI.

All recognised financial assets are subsequently measured in their entirety at either amortised cost or fair value, depending on the classification of the financial assets.

Classification and Subsequent Measurement: Financial liabilities:

Financial liabilities are classified as either financial liabilities at FVTPL or ‘other financial liabilities''.

Financial Liabilities at FVTPL:

Financial liabilities are classified as at FVTPL when the financial liability is held for trading or are designated upon initial recognition as FVTPL.

Gains or Losses on liabilities held for trading are recognised in the Statement of Profit or Loss.

Other Financial Liabilities:

Other financial liabilities (including borrowings and trade and other payables) are subsequently measured at amortised cost using the effective interest method.

The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.

Impairment of financial assets:

The Company recognises loss allowance using expected credit loss model for financial assets which carried at amortised cost. Expected credit losses are weighted average of credit losses with the respective risks of default occurring as the weights. Credit loss is the difference between all contractual cash flows that are due to the Company in accordance with the contract and all the cash flows that the Company expects to receive, discounted at original effective rate of interest.

For Trade Receivables, the Company uses the simplified approach permitted by Ind AS 109 Financial Instruments which requires expected life time losses to be recognized from initial recognition of receivables.

Derecognition of financial assets:

The Company derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party. If the Company neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Company recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Company retains substantially all the risks and rewards of ownership of a transferred financial asset, the Company continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.

On derecognition of a financial asset in its entirety, the difference between the asset''s carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognised in other comprehensive income and accumulated in equity is recognised in profit or loss if such gain or loss would have otherwise been recognised in profit or loss on disposal of that financial asset. On derecognition of a financial asset other than in its entirety (e.g. when the Company retains an option to repurchase part of a transferred asset), the Company allocates the previous carrying amount of the financial asset between the part it continues to recognise under continuing involvement, and the part it no longer recognises on the basis of the relative fair values of those parts on the date of the transfer. The difference between the carrying amount allocated to the part that is no longer recognised and the sum of the consideration received for the part no longer recognised and any cumulative gain or loss allocated to it that had been recognised in other comprehensive income is recognised in profit or loss if such gain or loss would have otherwise been recognised in profit or loss on disposal of that financial asset. A cumulative gain or loss that had been recognised in other comprehensive income is allocated between the part that continues to be recognised and the part that is no longer recognised on the basis of the relative fair values of those parts.

Financial liabilities and equity instruments:

- Classification as debt or equity:

Debt and equity instruments issued by the Company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

- Equity instruments:

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by a Company are recognised at the proceeds received.

Derecognition of financial liabilities:

The Company derecognises a financial liability when its contractual obligations are discharged or cancelled or expired. The Company also derecognises a financial liability when its terms are modified and the cash flows under the modified terms are substantially different.

Offsetting:

Financial assets and financial liabilities are offset and the net amount is reported in the Balance Sheet where there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the Company or the counter party.

2.9 Derivative Financial Instruments

The Company holds derivative financial instruments such as foreign exchange forward contracts to manage its exposure to foreign currency exchange rate risks.

Derivatives are initially recognised at fair value at the date the contracts are entered into. Subsequent to initial recognition, these contracts are measured at fair value at the end of each reporting period and changes are recognised in Statement of Profit or Loss.

2.10 Cash and Cash Equivalent

Cash and Cash Equivalent in the Balance Sheet Comprises of cash at bank and on hand and short term deposit with an original deposit of three months or less, which are subject to an insignificant risk of change in value.

For the purpose of presentation in the Statement of Cash Flows, cash and cash equivalents include cash on hand, cash at banks, other short-term deposits as defined above, bank overdraft, and short term highly liquid investments that are readily convertible into cash and which are subject to an insignificant risk of changes in value.

2.11 Segment Reporting

The Company identifies primary segments based on the dominant source, nature of risks and returns and the internal organisation and management structure. The operating segments are the segments for which separate financial information is available and for which operating profit / loss amounts are evaluated regularly by the Chief Operating Decision Maker (CODM) in deciding how to allocate resources and in assessing performance.

The accounting policies adopted for segment reporting are in line with the accounting policies of the Company.

The identification of geographical information is based on the geographical location of its customers.

2.12 Non-current Assets held for Sale

Assets held for sale are measured at the lower of carrying amount or fair value less costs to sell. The determination of fair value less costs to sell includes use of management estimates and assumptions. The fair value of the asset held for sale has been estimated using valuation techniques (mainly income and market approach), which include unobservable inputs.

Non-current assets are classified as held for sale if their carrying amount will be recovered through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset is available for immediate sale in its present condition subject only to terms that are usual and customary for sale of such assets. Property, Plant and Equipments and Intangible Assets are not depreciated or amortised once classified as held for sale.

2.13 Borrowing Costs

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the asset. All other borrowing costs are expensed in the period in which they are incurred. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.

2.14 Provisions, Contingent Liabilities and Contingent Assets

Provision is recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of obligation. Provision is not recognised for future operating losses.

Provisions are made at the management''s best estimate of the expenditure required to settle the present obligation at the end of the reporting period. If the effect of the time value of money is material, the amount of provision is discounted using an appropriate pre-tax rate that reflects current market assessments of the time value of money and, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

A Contingent liability is disclosed in case of a present obligation arising from past events, when it is either not probable that an outflow of resources will be required to settle the obligation, or a reliable estimate of the amount cannot be made. A Contingent Liability is also disclosed when there is a possible obligation arising from past events, unless the probability of outflow of resources are remote.

Contingent Assets are not recognised but where an inflow of economic benefits is probable, contingent assets are disclosed in the financial statements.

2.15 Revenue Recognition

Revenue is recognised to the extent that it is probable that the economic benefits of a transaction will flow to the Company and the revenue can be reliably measured. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes or duties collected on behalf of the government.

Sale of Goods

Revenue from sale of goods is recognised upon transfer of significant risks and rewards of ownership of the goods to the customer, while neither continuing managerial involvement nor effective control over the goods sold is retained. Amount disclosed as revenue are inclusive of excise duty and net of returns and allowances, trade discounts but does not include Value Added Tax (VAT), Central Sale Tax (CST) and Goods and Service Tax (GST). It is measured at fair value of consideration received or receivable, net of returns, rebates and discounts.

Sales Returns

The Company accounts for sales returns by recording an allowance for sales returns. This allowance is based on the Company''s historical experience of expected sales returns on account of expiry, breakages and damages. The Company considers its historical experience of sales return to account for such Provision.

Interest income

Interest income from a financial asset is recognised when it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably.

Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the gross carrying amount of that financial asset.

Dividends

Dividend income from investments is recognised when the Company''s right to receive dividend is established, which is generally when shareholders approve the dividend.

2.16 Foreign Currency Transactions

On initial recognition, transactions in foreign currencies are recognised at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are translated at the rates prevailing at that date. Non-monetary items that are measured at historical cost denominated in a foreign currency are translated using the exchange rate as at the date of initial transaction. Exchange differences on monetary items are recognised in the Statement of Profit or Loss account in the period in which they arise.

Non-monetary items that are measured in terms of historical cost foreign currency are translated using exchange rates at the dates of the initial transaction.

2.17 Employee Benefits:

Short-term employee benefits:

Employee benefits such as salaries, wages, short term compensated absences, expected cost of bonus and ex-gratia falling due wholly within twelve months of rendering the service are classified as short-term employee benefits and are recognised as an expense at the undiscounted amount in the Statement of Profit or Loss of the year in which the related service is rendered.

Long-term employee benefits:

- Defined Contribution Plan:

a. Provident and Family Pension Fund

The eligible employees of the Company are entitled to receive post employment benefits in respect of provident and family pension fund, in which both employees and the Company make monthly contributions at a specified percentage of the employees'' eligible salary. The contributions are made to the Provident Fund Account under the Employees'' Provident Fund and Misc. Provisions Act, 1952. Provident Fund and Family Pension Fund are classified as Defined Contribution Plans as the Company has no further obligations beyond making the contribution. The Company''s contributions to Defined Contribution Plan are charged to the Statement of Profit or Loss as incurred.

b. Superannuation fund:

The superannuation fund benefits are administrated by a Trust formed for this purpose through the Group scheme of Life Insurance Corporation of India. The Company''s contribution to superannuation fund are charged to the Statement of Profit or Loss as paid.

- Defined Benefit Plan:

a. Gratuity

In accordance with applicable Indian laws, the Company provides for gratuity, a defined benefit retirement plan (“Gratuity Plan”) covering all employees. The Gratuity Plan provides a lump sum payment to vested employees, at retirement or death while in employment or termination of employment, an amount based on the respective employee''s last drawn salary and the years of employment with the Company. Vesting occurs upon completion of five years of service. Liability with regard to Gratuity Plan is accrued based on actuarial valuation at the Balance Sheet date, carried out by an independent actuary. The Company makes contribution to the Group Gratuity Scheme with SBI Life Insurance Company Limited based on an independent actuarial valuation made at the year-end.

Re-measurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognized in the period in which they occur, directly in Other Comprehensive Income. They are included in retained earnings in the Statement of Changes in Equity and in the Balance Sheet.

b. Compensated Absences

The liabilities for leave are not expected to be settled wholly within twelve months after the end of the period in which the employees render the related service. They are therefore measured as the present value of expected future payments to be made in respect of services provided by employees up to the end of the reporting period using the projected unit credit method. The Company provides for the encashment of absence or absence with pay based on policy of the Company in this regard. The employees are entitled to accumulate such absences subject to certain limits, for the future encashment or absence. The Company records an obligation for compensated absences in the period in which the employee renders the services that increases this entitlement. The Company measures the expected cost of compensated absences as the additional amount that the Company expects to pay as a result of the unused entitlement that has accumulated at the Balance Sheet date on the basis of an independent actuarial valuation.

2.18 Taxes on Income Current Tax

Tax on income for the current period is determined on the basis on estimated taxable income and tax credits computed in accordance with the provisions of the relevant tax laws and based on the expected outcome of assessments /appeals.

Current income tax relating to items recognised directly in equity is recognised in equity and not in the Statement of Profit or Loss.

Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

Deferred Tax

Deferred tax is provided using the Balance Sheet approach on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.

Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized.

Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.

Deferred tax relating to items recognised outside the Statement of Profit or Loss is recognised outside the Statement of Profit or Loss. Deferred tax items are recognised in correlation to the underlying transaction either in Other Comprehensive Income or directly in equity.

The break-up of the major components of the deferred tax assets and liabilities as at Balance Sheet date has been arrived at after setting off deferred tax assets and liabilities where the Company have a legally enforceable right to set-off assets against liabilities and where such assets and liabilities relate to taxes on income levied by the same governing taxation laws.

MAT Credits are in the form of unused tax credits that are carried forward by the Company for a specified period of time, hence it is grouped with Deferred Tax Asset.

2.19 Leases Finance Leases

Assets acquired under leases where the Company has substantially all the risks and rewards of ownership are classified as finance leases. Such assets are capitalised at the inception of the lease at the lower of the fair value or the present value of minimum lease payments and a liability is created for an equivalent amount. Each lease rental paid is allocated between the liability and the interest cost, so as to obtain a constant periodic rate of interest on the outstanding liability for each period.

Operating Leases

Assets taken on lease where significant portion of the risk and rewards of ownership are retained by the lessor are classified as operating leases. Lease rentals are charged to the Statement of Profit or Loss on accrual basis.

2.20 Earnings Per Share

The basic earnings per share are computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity shares outstanding during the reporting period. Diluted earnings per share is computed by dividing the net profit attributable to the equity shareholders, adjusted for after income tax effect of interest and other financing costs associated with dilutive potential equity shares for the year by the weighted average number of equity and dilutive equity equivalent shares outstanding during the year, except where the results would be anti-dilutive.

2.21 Research and Development

Revenue expenditure on research and development is charged to Statement of Profit or Loss in the year in which it is incurred. Capital expenditure on research and development is considered as an addition to Property, Plant and Equipment / Intangible Assets.

2.22 Government Grants and Subsidies:

Government grants are recognised in the Statement of Profit or Loss on a systematic basis over the periods in which the Company recognizes the related costs for which the grants are intended to compensate.

Government grants relating to the purchase of property, plant and equipment are included in non-current liabilities as deferred income and are credited to profit or loss on a straight-line basis over the expected lives of the related assets and presented within other income.

Government grants that are receivable towards capital investments under State Investment Promotion Scheme are recognised in the Statement of Profit or Loss in the period in which they become receivable.

Government grants relating to income are deferred and recognised in the profit or loss over the period necessary to match them with the costs that they are intended to compensate and presented within other income.

Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant will be received and the Company will comply with all attached conditions.

2.23 First-time adoption-mandatory exceptions, optional exemptions Overall Principle

The Company has prepared the opening balance sheet as per Ind AS as of 1st April, 2016 (the transition date) by recognising all assets and liabilities whose recognition is required by Ind AS, not recognising items of assets or liabilities which are not permitted by Ind AS, by reclassifying items from previous GAAP to Ind AS as required under Ind AS, and applying Ind AS in measurement of recognised assets and liabilities. However, this principle is subject to certain exceptions and certain optional exemptions availed by the Company detailed below:

Significant items are as discussed below:

i) Deemed cost for Property, Plant and Equipment and Intangible assets

The Company has elected to continue with the carrying value of all of its Property, Plant and Equipment and Intangible assets recognised as of the transition date measured as per the previous GAAP and use that carrying value as its deemed cost as of the transition date.

ii) Deemed cost on investment in subsidiaries and associates.

The Company has elected to measure investments in Equity shares of subsidiary company at deemed cost, which is previous GAAP carrying amount at the entity''s date of transition to Ind AS in its standalone financial statements. Accordingly, under Ind AS, the Company has recognised investments as follows:

- Equity shares of subsidiary and associate companies - At deemed cost

- Equity shares of other companies- At FVTOCI

- Mutual Funds - At FVTPL

Determining whether an arrangement contains a lease

The Company has applied Appendix C of Ind AS 17 determining whether an arrangement contains a lease to determine whether an arrangement existing at the transition date contains a lease on the basis of facts and circumstances existing at that date.

Past business combinations

The Company has elected not to apply Ind AS 103 Business Combinations retrospectively to past business combinations that occurred before the transition date of April 1, 2015. Consequently, the Company has kept the same classification for the past business combinations as in its previous GAAP financial statements :

a) The Company has not recognised assets and liabilities that were not recognised in accordance with previous GAAP in the standalone Balance Sheet of the Company and would also not qualify for recognition in accordance with Ind AS in the separate Balance Sheet of the Company;

b) The Company has excluded from its opening Balance Sheet those items recognised in accordance with previous GAAP that do not qualify for recognition as an asset or liability under lnd AS; and

c) The Company has tested the goodwill for impairment at the transition date based on the conditions as of the transition date.

2.24 Critical Accounting Judgements and Key Sources of Estimation Uncertainty

The preparation of the financial statements requires the management to make judgements, estimates and assumptions in the application of accounting policies and that have the most significant effect on reported amounts of assets, liabilities, incomes and expenses, and accompanying disclosures, and the disclosure of contingent liabilities. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

Key estimates, assumptions and judgements

The key assumptions concerning the future and other major sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described belo

Income taxes

Significant judgements are involved in determining the provision for income taxes, including amount expected to be paid/recovered for uncertain tax positions as also to determine the amount of deferred tax that can be recognised, based upon the likely timing and the level of future taxable profits. Also, Refer Note 36.

Property, Plant and Equipment/Intangible Assets

Property, Plant and Equipment/ Other Intangible Assets are depreciated/amortised over their estimated useful lives, after taking into account estimated residual value. The useful lives and residual values are based on the Company''s historical experience with similar assets and taking into account anticipated technological changes or commercial obsolescence. Management reviews the estimated useful lives and residual values of the assets annually in order to determine the amount of depreciation/amortisation to be recorded during any reporting period. The depreciation/amortisaion for future periods is revised, if there are significant changes from previous estimates and accordingly, the unamortised/depreciable amount is charged over the remaining useful life of the assets.

Employee Benefit Plans

The cost of the defined benefit gratuity plan and other-post employment benefits and the present value of gratuity obligations and compensated absences are determined based on actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases, attrition and mortality rates. Due to the complexities involved in the valuation and its long-term nature, these liabilities are highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

Impairment of Financial Assets

The impairment provisions for financial assets are based on assumptions about risk of default and expected cash loss rates. The Company uses judgment in making these assumptions and selecting the inputs to the impairment calculation, based on the Company''s past history, existing market conditions as well as forward looking estimates at the end of each reporting period.

The Company reviews its carrying value of investments carried at amortised cost annually, or more frequently when there is indication for impairment. If the recoverable amount is less than its carrying amount, the impairment loss is accounted for.

Recoverability of Trade Receivables

Judgements are required in assessing the recoverability of overdue trade receivables and determining whether a provision against those receivables is required. Factors considered include the credit rating of the counterparty, the amount and timing of anticipated future payments and any possible actions that can be taken to mitigate the risk of non-payment.

Fair Value measurements of Financial Instruments

When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets (Net Assets Value in case of units of Mutual Funds), their fair value is measured using valuation techniques including the Discounted Cash Flow (DCF) model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments.

Impairment of Assets

The Company has used certain judgements and estimates to work out future projections and discount rates to compute value in use of cash generating unit and to access impairment. In case of certain assets independent external valuation has been carried out to compute recoverable values of these assets.

Provisions

Provisions and liabilities are recognised in the period when it becomes probable that there will be a future outflow of funds resulting from past operations or events and the amount of cash outflow can be reliably estimated. The timing of recognition and quantification of the liability requires the application of judgement to existing facts and circumstances, which can be subject to change. The carrying amounts of provisions and liabilities are reviewed regularly and revised to take account of changing facts and circumstances.


Mar 31, 2016

1. SIGNIFICANT ACCOUNTING POLICIES

A. BASIS OF ACCOUNTING:

a. Accounting Convention:

These financial statements are prepared in accordance with the generally accepted accounting principles in India (Indian GAAP) under the historical cost convention except for certain tangible assets which are being carried at revalued amounts as also on accrual basis. These financial statements have been prepared to comply with the accounting standards prescribed under Section 133 of the Companies Act, 2013 (‘the Act'') read with Rule 7 of the Companies (Accounts) Rules, 2014 (‘the Accounting Standards'') and the relevant provisions of the Act (to the extent notified). In the light of Rule 4A of the Companies (Accounts) Rules 2014, the items contained in these financial statements are in accordance with the definitions and other requirements specified in the Accounting Standards.

b. Use of Estimates:

The preparation of the financial statements in conformity with the generally accepted accounting principles requires Management to make estimates and assumptions that affect the reported amounts of revenues and expenses during the reporting period, the reported amounts of assets and liabilities and the disclosures relating to the contingent liabilities on the date of the financial statements. Examples of such estimates include useful lives of Fixed Assets, provision for doubtful debts/advances, deferred tax etc. Actual results could differ from those estimates. Such difference is recognized in the period/s in which the results are known/materialized.

B. FIXED ASSETS:

a. Land (Freehold): At cost except Land at Deonar, Mumbai, which is reflected at revalued amount.

b. Buildings: At cost less depreciation and grants related to specific assets except buildings at Deonar, Mumbai, which are reflected at revalued amount less depreciation.

c. Other Fixed Assets: At cost less accumulated depreciation/amortization and impairment losses, if any.

d. Cost for the aforesaid purposes comprises of its purchase price and any directly attributable cost of bringing the asset to its working condition for its intended use, net of recoverable duties and interest on borrowings attributable to the acquisition of qualifying fixed assets up to the date on which the Asset is ready for its intended use, if any.

e. 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 and are disclosed as “Capital Work-in-Progress”.

C. DEPRECIATION:

a. Depreciation on tangible Fixed Assets is provided on the Straight-Line Method over the useful lives as prescribed under Part C of Schedule II of Companies Act, 2013.

b. The amount of depreciation on the Revalued Fixed Assets over it Original Cost is withdrawn from the Revaluation Reserve Account (to the extent the Reserve is available) and credited to the General Reserve.

c. Depreciation for assets purchased/sold during the period is charged on a pro-rata basis.

D. INVENTORIES:

a. Inventories are valued at the lower of Cost and Net Realizable Value.

b. Raw Materials and Packing Materials are valued at cost computed on FIFO basis. Cost includes cost of purchases and all other costs incurred in bringing the same to its present location and condition (net of Cenvat / Sales Tax set off, if any).

c. Cost of Finished Goods consists of direct cost and an appropriate share of related factory overheads. Excise duty on closing stock of finished goods awaiting clearance has been provided for and included in cost thereof.

d. Stock of materials sold by one unit to other is works/ factory costs of the transferor unit/ division, plus transport and other charges.

E. REVENUE RECOGNITION:

a. Sales of Manufactured Goods:

i. Sale of goods in respect of export sales are recognized as and when the shipment of goods takes place.

ii. Sale of goods in respect of export sales from overseas warehouses are recognized as and when the release order for goods is sent to the warehouse.

iii. Sale of goods in respect of domestic sales are recognized on dispatch of goods to the customer net of VAT and Excise Duty. However, for the purpose of disclosure, Sales are disclosed at gross as reduced by Excise Duty.

iv. Sales are net of returns.

Excise Duty Refund, Octroi Duty Refund and Sales Tax Set off, if any, is taken on accrual basis.

b. Recognition of Export Benefits:

i. Export Incentives are accounted on export of goods, if the entitlement can be estimated with reasonable accuracy and conditions precedent to claims are fulfilled[Refer Note 21.2 of the Statement of Profit and loss]

Export Benefit Entitlements under the Duty drawback Scheme of the Government of India are recognized in the year in which the Export sales are accounted for.

ii. Advance License Benefits on Exports are accounted in the year of utilization of license.

c. Dividend income is recognized when the right to receive payment is established.

d. Interest income is recognized on a time proportionate basis taking into account the amount outstanding and the rate applicable.

e. Claims for insurance are accounted at the time of its lodgment with the Insurance Company.

F. FOREIGN CURRENCY TRANSACTIONS:

a. Transactions in foreign currency (monetary and non-monetary items) are initially recorded at exchange rates prevailing on the respective dates of the relevant transactions.

b. Monetary items (i.e. receivables, payables, loans, etc.), which are denominated in foreign currency are translated and reported using the exchange rates prevailing on the date of Balance Sheet.

c. Exchange differences arising on the settlement of monetary items or on reporting at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognized as income or expenses in the year in which they arise.

d. Non-monetary items denominated in foreign currency and carried at:

i. fair value / net realizable value, are translated at the exchange rate prevalent at the date when the fair value / net realizable value was determined;

ii. historical cost, as translated at the exchange rate prevalent at the date of transaction.

e. In case of forward contracts:

i. the exchange difference between the forward rate and the exchange rate at the date of transaction is recognized as income or expense over the life of the contract;

ii. the exchange differences are recognized in the Statement of Profit and Loss in the reporting period in which the exchange rates change;

iii. the exchange differences on settlement/restatement are recognized in the Statement of Profit and Loss for the period in which the forward contracts are settled/restated.

As required by the Announcement of the Institute of Chartered Accountants of India on positions of derivatives, keeping in view the principle of prudence as per Accounting Standard 1 on “Disclosure of Accounting Policies”, outstanding forward contracts at the Balance Sheet date are reflected by marking them to market and accordingly, the resulting mark to market losses are provided in the Statement of Profit and Loss.

G. GRANTS:

a. Grants related to specific fixed assets are shown as deduction from the gross value of the assets.

b. Other revenue grants are deducted from the related expense.

c. Grants are recognized as accrued on the basis of sanction letter received from the concerned authorities.

H. INVESTMENTS:

a. Investments, which are long-term, are stated at cost. A provision for diminution, if any, is made to recognize a decline, other than temporary, in the value of investments.

b. Profit or loss on sale of long-term investments, if any, is calculated by considering the weighted average amount of the total holding of the investment.

c. Current Investments are stated at the lower of cost and fair value.

I. EMPLOYEE BENEFITS:

Short-term employee benefits are recognized as an expense at the undiscounted amount in the Statement of Profit and Loss for the period in which the related service is rendered.

Long-term benefits:

Defined Contribution Plan:

a. Provident and Family Pension Fund

The eligible employees of the Company are entitled to receive post employment benefits in respect of provident and family pension fund, in which both employees and the Company make monthly contributions at a specified percentage of the employees'' eligible salary. The contributions are made to the Provident Fund Account under the Employees'' Provident Fund and Misc. Provisions Act, 1952. Provident Fund and Family Pension Fund are classified as Defined Contribution Plans as the Company has no further obligations beyond making the contribution. The Company''s contributions to Defined Contribution Plan are charged to the Statement of Profit and Loss as incurred.

b. Superannuation fund:

The superannuation fund benefits are administrated by a Trust formed for this purpose through the Group scheme of Life Insurance Corporation of India. The Company''s contribution to superannuation fund are charged to the Statement of Profit and Loss as paid.

Defined Benefit Plan:

a. Gratuity

The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees. The plan provides a lumpsum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service. Vesting occurs upon completion of five years of service. The Company makes contribution to the Group Gratuity Scheme with SBI Life Insurance Company Limited based on an independent actuarial valuation made at the year-end. Actuarial gains and losses are recognized in the Statement of Profit and Loss.

b. Compensated Absences:

The Company provides for the encashment of leave or leave with pay subject to certain rules. The employees are entitled to accumulate leave subject to certain limits for future encashment/ availment. The liability is recognized based on number of days of unutilized leave at each Balance Sheet date on the basis of an independent actuarial valuation. Actuarial gains and losses are recognized in the Statement of Profit and Loss.

J. BORROWING COSTS:

Borrowing costs, in connection with the borrowing of funds to the extent attributable to the acquisition or construction of a qualifying fixed asset, are capitalized as part of the cost of such asset till such time the asset is ready for its intended use. All other borrowing costs are recognized in the Statement of Profit and Loss in the period in which they are incurred. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use.

K. LEASES:

a. Assets acquired under leases where the Company has substantially all the risks and rewards of ownership are classified as finance leases. Such assets are capitalized at the inception of the lease at the lower of the fair value or the present value of minimum lease payments and a liability is created for an equivalent amount. Each lease rental paid is allocated between the liability and the interest cost, so as to obtain a constant periodic rate of interest on the outstanding liability for each period.

b. Assets taken on lease where significant portion of the risk and rewards of ownership are retained by the lessor are classified as operating leases. Lease rentals are charged to the Statement of Profit and Loss on accrual basis.

L. TAXATION:

a. Current Tax: Provision for current tax is made on the estimated taxable income of the period at the rate applicable to the relevant assessment year.

b. Minimum Alternate Tax (MAT) credit is recognized as an asset only when and to the extent there is a convincing evidence that the Company will pay normal tax within the period specified under the Income-tax Act, 1961 to avail such MAT credit.

c. Deferred Tax: Deferred tax is recognized, subject to consideration of prudence, on timing differences between taxable and accounting income which originates in one period and are capable of reversal in one or more subsequent periods (adjusted for reversals expected during tax holiday period). The tax effect is calculated on accumulated timing differences at the year-end based on tax rates and laws enacted or substantially enacted as of the balance sheet date.

In the event of unabsorbed depreciation and carry forward of losses, deferred tax assets are recognized only to the extent that there is virtual certainty that sufficient future taxable income will be available to realize such assets.

In other situations, deferred tax assets are recognized only to the extent that there is a reasonable certainty that sufficient future taxable income will be available to realize such deferred tax assets.

The Company offsets deferred tax assets and deferred tax liabilities if it has a legally enforceable right and these relate to taxes on income levied by the same governing taxation laws. The carrying amount of deferred tax assets is reviewed at each Balance Sheet date and reduced to the extent that it is no longer probable that sufficient taxable income will be available to allow all or part of the deferred tax asset to be utilized.

M. IMPAIRMENT OF ASSETS:

The Management periodically assesses, using external and internal sources, whether there is an indication that an asset may be impaired. An impairment loss is recognized wherever the carrying value of an asset exceeds its recoverable amount. The recoverable amount is the higher of the asset''s net selling price and value in use which means the present value of future cash flows expected to arise from the continuing use of the asset and its eventual disposal.

N. SEGMENT REPORTING POLICIES:

a. Primary Segments are identified based on the nature of products, the different risks and returns and the internal business reporting system. The identification of geographical segments (secondary segment) is based on the geographical location of its customers.

b. The Company prepares its Segment information in conformity with the accounting policies adopted for preparing and presenting the financial statements of the Company as a whole.

O. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:

a. The Company recognizes a Provision when there is a present obligation as a result of past event, the settlement of which is probable to result in an outflow of resources and a reliable estimate can be made of the amount of obligation.

b. Contingent Liability is disclosed by way of a note to the financial statements when there is a possible obligation or a present obligation that may, but probably will not, require outflow of resources. Where there is a possible obligation or present obligation where likelihood of outflow of resources is remote, no provision or disclosure is made.

c. Contingent Assets are neither recognized nor disclosed in the financial statements.


Mar 31, 2015

A. BASIS OF ACCOUNTING

a. Accounting Convention:

These financial statements are prepared in accordance with the generally accepted accounting principles in India (Indian GAAP) under the historical cost convention except for certain tangible assets which are being carried at revalued amounts as also on accrual basis. These financial statements have been prepared to comply with the accounting standards prescribed under Section 133 of the Companies Act, 2013 ('the Act') read with Rule 7 of the Companies (Accounts) Rules, 2014 ('the Accounting Standards') and the relevant provisions of the Act (to the extent notified). In the light of the first proviso to Section 129 (1) of the Act and Schedule III to the Act, the items and terms contained in these financial statements are in accordance with the Accounting Standards

B. FIXED ASSETS:

a. Land (Freehold): At cost except Land at Deonar, Mumbai, which is reflected at revalued amount.

b. Buildings: At cost less depreciation and grants related to specific assets except buildings at Deonar, Mumbai, which are reflected at revalued amount less depreciation.

c. Other Fixed Assets: At cost less accumulated depreciation/amortisation and impairment losses, if any.

d. Cost for the aforesaid purposes comprises of its purchase price and any directly attributable cost of bringing the asset to its working condition for its intended use, net of recoverable duties and interest on borrowings attributable to the acquisition of qualifying fixed assets upto the date on which the Asset is ready for its intended use,if any.

e. 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 and are disclosed as "Capital Work-in-Progress".

C. DEPRECIATION:

a. Depreciation on tangible Fixed Assets is provided on the Straight-Line Method over the the useful lives of assets as prescribed under Part C of Schedule II of Companies Act,2013.

b. The amount of depreciation on the Revalued Fixed Assets over it Original Cost is withdrawn from the Revaluation Reserve Account (to the extent the Reserve is available) and credited to the General Reserve.

c. Depreciation for assets purchased/sold during the period is charged on a pro-rata basis.

D. INVENTORIES:

a. Inventories are valued at the lower of Cost and Net Realisable Value.

b. Raw Materials and Packing Materials are valued at cost computed on FIFO basis. Cost includes cost of purchases, Excise Duties and Taxes and all other costs incurred in bringing the same to its present location and condition (net of Cenvat / Sales Tax set off, if any).

c. Cost of Finished Goods consists of direct cost and an appropriate share of related factory overheads. Excise duty on closing stock of finished goods awaiting clearance has been provided for and included in cost thereof.

d. Stock of materials sold by one unit to other is works/ factory costs of the transferor unit/ division, plus transport and other charges.

E. REVENUE RECOGNITION:

a. Sales of Manufactured Goods:

i Sale of goods in respect of export sales are recognised as and when the shipment of goods takes place.

ii Sale of goods in respect of export sales from overseas warehouses are recognized as and when the release order for goods is sent to the warehouse.

iii Sale of goods in respect of domestic sales are recognised on despatch of goods to the customer net of VAT and Excise Duty. However, for the purpose of disclosure, Sales are disclosed at gross as reduced by Excise Duty.

iv Sales are net of returns.

v Excise Duty Refund, Octroi Duty Refund and Sales Tax Set off, if any, is taken on accrual basis.

b. Recognition of Export Benefits:

i Export Incentives are accounted on export of goods, if the entitlement can be estimated with reasonable accuracy and conditions precedent to claims are fulfilled[Refer Note 21.2 of the Statement of Profit and loss]

Export Benefit Entitlements under the Duty drawback Scheme of the Government of India are recognised in the year in which the Export sales are accounted for.

ii Advance License Benefits on Exports are accounted in the year of utilisation of license.

c. Dividend income is recognised when the right to receive payment is established.

d. Interest income is recognised on a time proportionate basis taking into account the amount outstanding and the rate applicable.

e. Claims for insurance are accounted at the time of its lodgement with the Insurance Company.

F. FOREIGN CURRENCY TRANSACTIONS:

a. Transactions in foreign currency (monetary and non-monetary items) are recorded at exchange rates prevailing on the respective dates of the relevant transactions.

b. Monetary items (i.e. receivables, payables, loans, etc.), which are denominated in foreign currency are translated and reported using the exchange rates prevailing on the date of Balance Sheet.

c. Exchange differences arising on the settlement of monetary items or on reporting at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognised as income or expenses in the year in which they arise.

d. Non-monetary items denominated in foreign currency and carried at:

i. fair value / net realisable value,are translated at the exchange rate prevalent at the date when the fair value / net realisable value was determined;

ii. historical cost, as translated at the exchange rate prevalent at the date of transaction.

e. In case of forward contracts:

i the exchange difference between the forward rate and the exchange rate at the date of transaction is recognised as income or expense over the life of the contract;

ii. the exchange differences are recognised in the Statement of Profit and Loss in the reporting period in which the exchange rates change;

iii the exchange differences on settlement/restatement are recognised in the Statement of Profit and Loss for the period in which the forward contracts are settled/restated.

As required by the Announcement of the Institute of Chartered Accountants of India on positions of derivatives, keeping in view the principle of prudence as per Accounting Standard 1 on "Disclosure of Accounting Policies", outstanding forward contracts at the Balance Sheet date are reflected by marking them to market and accordingly, the resulting mark to market losses are provided in the Statement of Profit and Loss.

G. GRANTS:

a. Grants related to specific fixed assets are shown as deduction from the gross value of the assets.

b. Other revenue grants are deducted from the related expense.

c. Grants are recognised as accrued on the basis of sanction letter received from the concerned authorities.

H. INVESTMENTS:

a. Investments, which are long-term, are stated at cost. A provision for diminution, if any, is made to recognise a decline,other than temporary, in the value of investments.

b. Profit or loss on sale of long-term investments, if any, is calculated by considering theweighted average amount of the totalholding of the investment.

c. Current Investments are stated atthe lower of cost and fair value.

I. EMPLOYEE BENEFITS:

Short-term employee benefits are recognised as an expense at the undiscounted amount in the Statement of Profit and Loss for the period in which the related service is rendered.

Long-term benefits:

Defined Contribution Plan:

Provident and Family Pension Fund

The eligible employees of the Company are entitled to receive post employment benefits in respect of provident and family pension fund, in which both employees and the Company make monthly contributions at a specified percentage of the employees' eligible salary. The contributions are made to the Provident Fund Account under the Employees' Provident Fund and Misc. Provisions Act, 1952. Provident Fund and Family Pension Fund are classified as Defined Contribution Plans as the Company has no further obligations beyond making the contribution.The Company's contributions to Defined Contribution Plan are charged to the Statement of Profit and Loss as incurred.

Defined Benefit Plan:

1. Gratuity

The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees. The plan provides a lumpsum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service. Vesting occurs upon completion of five years of service. The Company makes contribution to the Group Gratuity Scheme with SBI Life Insurance Company Limited based on an independent actuarial valuation made at the year-end. Actuarial gains and losses are recognised in the Statement of Profit and Loss.

2. Compensated Absences:

The Company provides for the encashment of leave or leave with pay subject to certain rules. The employees are entitled to accumulate leave subject to certain limits for future encashment/ availment. The liability is recognised based on number of days of unutilized leave at each Balance Sheet date on the basis of an independent actuarial valuation. Actuarial gains and losses are recognised in the Statement of Profit and Loss.

3. Superannuation fund:

The superannuation fund benefits are administrated by a Trust formed for this purpose through the Group scheme of Life Insurance Corporation of India. The Company's contribution to superannuation fund are charged to the Statement of Profit and Loss as incurred.

J. BORROWING COSTS:

Borrowing costs, in connection with the borrowing of funds to the extent attributable to the acquisition or construction of a qualifying fixed asset, are capitalised as part of the cost of such asset till such time the asset is ready for its intended use. All other borrowing costs are recognised in the Statement of Profit and Loss in the period in which they are incurred. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use.

K. LEASES:

Assets taken on lease where significant portion of the risk and rewards of ownership are retained by the lessor are classified as operating leases. Lease rentals are charged to the Statement of Profit and Loss on accrual basis.

L. TAXATION:

a. Current Tax: Provision for current tax is made on the estimated taxable income of the period at the rate applicable to the relevant assessment year.

b. Minimum Alternate Tax (MAT) credit is recognised as an asset only when and to the extent there is a convincing evidence that the Company will pay normal tax within the period specified under the Income-tax Act, 1961 to avail such MAT credit.

c. Deferred Tax: Deferred tax is recognised, subject to consideration of prudence, on timing differences between taxable and accounting income which originates in one period and are capable of reversal in one or more subsequent periods (adjusted for reversals expected during tax holiday period). The tax effect is calculated on accumulated timing differences at the year-end based on tax rates and laws enacted or substantially enacted as of the balance sheet date.

In the event of unabsorbed depreciation and carry forward of losses, deferred tax assets are recognised only to the extent that there is virtual certainty that sufficient future taxable income will be available to realise such assets.

In other situations,deferred tax assetsarerecognised only to the extent that there is a reasonable certainty that sufficient future taxable income will be available to realise such deferred tax assets.

The Company offsets deferred tax assets and deferred tax liabilities if it has a legally enforceable right and these relate to taxes on income levied by the same governing taxation laws.The carrying amount of deferred tax assets is reviewed at each Balance Sheet date and reduced to the extent that it is no longer probable that sufficient taxable income will be available to allow all or part of the deferred tax asset to be utilised.

M. IMPAIRMENT OF ASSETS:

The Management periodically assesses, using external and internal sources, whether there is an indication that an asset may be impaired. An impairment loss is recognised wherever the carrying value of an asset exceeds its recoverable amount. The recoverable amount is the higher of the asset's net selling price and value in use which means the present value of future cash flows expected to arise from the continuing use of the asset and its eventual disposal.

N. SEGMENT REPORTING POLICIES:

i Primary Segments are identified based on the nature of products, the different risks and returns and the internal business reporting system. The identification of geographical segments is based on the geographical location of its customers.

The following specific accounting policies have been followed for segment reporting:

Segment revenue includes sales and other income directly identifiable with / allocable to the segment.

Expenses that are directly identifiable with / allocable to segments are considered for determining the segment result. Expenses which relate to the Company as a whole and not allocable to segments are included under Unallocable Expenses.

Income which relates to the Company as a whole and not allocable to segments is included in Unallocable Income.

Segment assets and liabilities include those directly identifiable with the respective segments. Unallocable corporate assets and liabilities are those relate to the Company as a whole and not allocable to any segment.

ii The Company prepares its Segment information in conformity with the accounting policies adopted for preparing and presenting the financial statements of the Company as a whole.

a. Identification of Segments

Primary Segment is identified based on the nature of products, the different risks and returns and the internal business reporting system. Secondary Segment is identified based on the geographical location of its customers.

b. Segment Policies

The Company prepares its segment information in conformity with the accounting policies adopted for preparing and presenting the financial statements of the Company as a whole.

O. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:

a. The Company recognises a Provision when there is a present obligation as a result of past event, the settlement of which is probable to result in an outflow of resources and a reliable estimate can be made of the amount of obligation.

b. Contingent Liability is disclosed by way of a note to the financial statementswhen there is a possible obligation or a present obligation that may, but probably will not, require outflow of resources. Where there is a possible obligation or present obligation where likelihood of outflow of resources is remote, no provision or disclosure is made.

c. Contingent Assets are neither recognised nor disclosed in the financial statements.


Mar 31, 2014

A. BASIS OF ACCOUNTING

a. Accounting Convention:

i. The financial statements are prepared on the basis of going concern under historical cost convention on an accrual basis in accordance with the Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956, which have been prescribed by the Companies (Accounting Standards) Rules, 2006, (which continue to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs) and the relevant provisions of the Companies Act, 1956/the Companies Act, 2013, as applicable."

b. Use of Estimates:

The preparation of the financial statements in conformity with the Generally Accepted Accounting Principles requires Management to make estimates and assumptions to be made that affect the reported amounts of revenues and expenses during the reporting period, the reported amounts of assets and liabilities and the disclosure relating to the contingent liabilities on the date of the financial statements. Examples of such estimates include useful lives of Fixed Assets, provision for doubtful debts / advances, deferred tax, export incentives, provision for retirement benefits, etc. Actual results could differ from those estimates.

B. FIXED ASSETS:

a. Land (Freehold): At cost except Land at Deonar, Mumbai, which is reflected at revalued amount;

b. Buildings: At cost less depreciation and grants related to specific assets except buildings at Deonar, Mumbai, which are reflected at revalued amount less depreciation;

c. Other Fixed Assets: At cost less depreciation.

Cost'' for the aforesaid purpose comprises of its purchase price, including import duties and other non-refundable taxes and levies and any directly attributable cost of bringing the asset to its working condition for its intended use; trade discount and rebate, if any, are deducted in arriving at the purchase price.

C. DEPRECIATION:

a. Depreciation on Fixed Assets is provided on the straight-line method, at the rates prescribed under Schedule XIV to the Companies Act, 1956.

b. Assets costing below Rs. 5,000 have been depreciated fully in the period of acquisition.

c. The amount of depreciation on the Revalued Fixed Assets over its Original Cost is withdrawn from Revaluation Reserve Account (to the extent the Reserve is available) and credited to the Statement of Profit and Loss.

D. INVENTORIES:

a. Inventories are valued at the lower of Cost and Net Realisable Value.

b. Raw Materials and Packing Materials are valued at cost computed on FIFO basis. Cost includes cost of purchases, Excise Duties and Taxes and all other costs incurred in bringing the same to its present location and condition (net of Cenvat / Sales Tax set off, if any).

c. Cost of Finished Goods consists of direct cost and an appropriate share of related factory overheads. Excise duty on closing stock of finished goods awaiting clearance has been provided for and included in cost thereof.

d. Stock of materials sold by one unit to other is works/ factory costs of the transferor unit/ division, plus transport and other charges.

E. REVENUE RECOGNITION:

a. Sales of Manufactured Goods:

i. Sale of goods in respect of export sales are recognised as and when the shipment of goods takes place.

ii. Sale of goods in respect of export sales from overseas warehouses are recognized as and when the release ord er for goods is sent to the warehouse.

iii. Sale of goods in respect of domestic sales are recognised on despatch of goods to the customer net of VAT and Excise Duty. However, for the purpose of disclosure, Sales are disclosed at gross as reduced by Excise Duty.

iv. Sales are net of returns.

v. Excise Duty Refund, Octroi Duty Refund and Sales Tax Set off, if any, is taken on accrual basis. Grants are recognised as accrued on the basis of sanction letter received from the concerned authorities.

b. Recognition of Export Benefits:

i. Export Incentives are accounted on export of goods, if the entitlement can be estimated with reasonable accuracy and conditions precedent to claims are fulfilled [Refer Note 21.2 of the Statement of Profit and loss]

Export Benefit Entitlements under the Duty drawback Scheme of the Government of India are recognised in the year in which the Export sales are accounted for.

ii. Advance License Benefits on Exports are accounted in the year of utilisation of license.

c. Dividend income is recognised when the right to receive payment is established.

d. Interest income is recognised on a time proportionate basis taking into account the amount outstanding and the rate applicable.

e. Claims for insurance are accounted at the time of its lodgement with the Insurance Company.

F. FOREIGN CURRENCY TRANSACTIONS:

a. Transactions in foreign currency (monetary and non-monetary items) are recorded at exchange rates prevailing on the respective dates of the relevant transactions.

b. Monetary items (i.e. receivables, payables, loans, etc.), which are denominated in foreign currency are translated and reported using the exchange rates prevailing on the date of Balance Sheet.

c. Exchange differences arising on the settlement of monetary items or on reporting at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognised as income or expenses in the year in which they arise.

d. Non-monetary items denominated in foreign currency and carried at:

i. fair value / net realisable value, are translated at the exchange rate prevalent at the date when the fair value / net realisable value was determined;

ii. historical cost, as translated at the exchange rate prevalent at the date of transaction.

e. In case of forward contracts:

i. the exchange difference between the forward rate and the exchange rate at the date of transaction is recognised as income or expense over the life of the contract;

ii. the exchange differences are recognised in the Statement of Profit and Loss in the reporting period in which the exchange rates change;

iii. the exchange differences on settlement/restatement are recognised in the Statement of Profit and Loss for the period in which the forward contracts are settled/restated.

G. GRANTS:

a. Grants related to specific fixed assets are shown as deduction from the gross value of the assets.

b. Other revenue grants are deducted from the related expense.

H. INVESTMENTS:

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

I. EMPLOYEE BENEFITS:

Short-term employee benefits are recognised as an expense at the undiscounted amount in the Statement of Profit and Loss for the period in which the related service is rendered.

Long-term benefits:

Defined Contribution Plan:

Provident and Family Pension Fund

The eligible employees of the Company are entitled to receive post employment benefits in respect of provident and family pension fund, in which both employees and the Company make monthly contributions at a specified percentage of the employees'' eligible salary. The contributions are made to the Provident Fund Account under the Employees'' Provident Fund and Misc. Provisions Act, 1952. Provident Fund and Family Pension Fund are classified as Defined Contribution Plans as the Company has no further obligations beyond making the contribution. The Company''s contributions to Defined Contribution Plan are charged to the Statement of Profit and Loss as incurred.

Defined Benefit Plan:

1. Gratuity

The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees. The plan provides a lumpsum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service. Vesting occurs upon completion of five years of service. The Company makes contribution to the Group Gratuity Scheme with SBI Life Insurance Company Limited based on an independent actuarial valuation made at the year-end. Actuarial gains and losses are recognised in the Statement of Profit and Loss.

2. Compensated Absences:

The Company provides for the encashment of leave or leave with pay subject to certain rules. The employees are entitled to accumulate leave subject to certain limits for future encashment/ availment. The liability is recognised based on number of days of unutilized leave at each Balance Sheet date on the basis of an independent actuarial valuation. Actuarial gains and losses are recognised in the Statement of Profit and Loss.

3. Superannuation fund:

The superannuation fund benefits are administrated by a Trust formed for this purpose through the Group scheme of Life Insurance Corporation of India. The Company''s contribution to superannuation fund are charged to the Statement of Profit and Loss as incurred.

J. BORROWING COSTS:

Borrowing costs, in connection with the borrowing of funds to the extent attributable to the acquisition or construction of a qualifying fixed asset, are capitalised as part of the cost of such asset till such time the asset is ready for its intended use. All other borrowing costs are recognised in the Statement of Profit and Loss in the period in which they are incurred. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use.

K. LEASES:

Assets taken on lease where significant portion of the risk and rewards of ownership are retained by the lessor are classified as operating leases. Lease rentals are charged to the Statement of Profit and Loss on accrual basis.

L. TAXATION:

a. Provision for current tax is made on the estimated taxable income of the period at the rate applicable to the relevant assessment year.

b. In accordance with the Accounting Standard 22 - "Accounting for Taxes on Income", the deferred tax for the timing differences is measured using the tax rates and tax laws that have been enacted or substantially enacted by the Balance Sheet date.

c. In the event of unabsorbed depreciation and carry forward of losses, deferred tax assets are recognised only to the extent that there is virtual certainty that sufficient future taxable income will be available to realise such assets.

In other situations, deferred tax assets are recognised only to the extent that there is a reasonable certainty that sufficient future taxable income will be available to realise such deferred tax assets.

The Company offsets deferred tax assets and deferred tax liabilities if it has a legally enforceable right and these relate to taxes on income levied by the same governing taxation laws.

The carrying amount of deferred tax assets is reviewed at each Balance Sheet date and reduced to the extent that it is no longer probable that sufficient taxable income will be available to allow all or part of the deferred tax asset to be utilised.

M. IMPAIRMENT OF ASSETS:

The Management periodically assesses, using external and internal sources, whether there is an indication that an asset may be impaired. An impairment loss is recognised wherever the carrying value of an asset exceeds its recoverable amount. The recoverable amount is the higher of the asset''s net selling price and value in use which means the present value of future cash flows expected to arise from the continuing use of the asset and its eventual disposal.

N. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:

a. A provision is recognised, if as a result of past event, the Company has a present legal obligation that can be measured reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by the best estimate of the outflow of economic benefits required to settle the obligation at the reporting date. Where no reliable estimate can be made, a disclosure is made as contingent liability.

b. Contingent Liability is disclosed by way of a note to the financial statements when there is a possible obligation or a present obligation that may, but probably will not, require outflow of resources. Where there is a possible obligation or present obligation where likelihood of outflow of resources is remote, no provision or disclosure is made.

c. Contingent Assets are neither recognised nor disclosed.


Mar 31, 2013

A. BASIS OF ACCOUNTING

a. Accounting Convention:

i. The financial statements are prepared on the basis of going concern under historical cost convention on an accrual basis in accordance with the Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956, which have been prescribed by the Companies (Accounting Standards) Rules, 2006, and the relevant provisions of the Companies Act, 1956.

ii. The financial statements of the Company for the previous financial year for the period of Eighteen Months from October 1, 2010 to March 31, 2012 had been prepared as per then applicable, pre-revised Schedule VI to the Companies Act, 1956. Consequent to the notification of Revised Schedule VI under the Companies Act, 1956, the financial statements for the year ended March 31, 2013 are prepared as per the Revised Schedule VI. Accordingly, the figures of previous period of Eighteen Months from October 1, 2010 to March 31, 2012 have also been reclassified/regrouped to conform to this year''s classification. The figures of the current period are for twelve months ended on March 31, 2013 and hence, are not comparable with those of the previous period of Eighteen Months ended on March 31,2012. The adoption of Revised Schedule VI does not impact recognition and measurement principles followed for preparation of financial statements.

b. Use of Estimates:

The preparation of the financial statements in conformity with the Generally Accepted Accounting Principles requires Management to make estimates and assumptions to be made that affect the reported amounts of revenues and expenses during the reporting period, the reported amounts of assets and liabilities and the disclosure relating to the contingent liabilities on the date of the financial statements. Examples of such estimates include useful lives of Fixed Assets, provision for doubtful debts / advances, deferred tax, export incentives, provision for retirement benefits, etc. Actual results could differ from those estimates.

B. FIXED ASSETS:

a. Land (Freehold): At cost except Land at Deonar, Mumbai, which is reflected at revalued amount;

b. Buildings: At cost less depreciation and grants related to'' specific assets except buildings at Deonar, Mumbai, which are reflected at revalued amount less depreciation;

c. Other Fixed Assets: At cost less depreciation.

''Cost'' for the aforesaid purpose comprises of its purchase price, including import duties and other non-refundable taxes and levies and any directly attributable cost of bringing the asset to its working condition for its intended use; trade discount and rebate, if any, are deducted in arriving at the purchase price.

C. DEPRECIATION:

a. Depreciation on Fixed Assets is provided on the straight-line method, at the rates prescribed under Schedule XIV to the Companies Act, 1956.

b. Assets costing below Rs. 5,000 have been depreciated fully in the period of acquisition.

c. The amount of depreciation on the Revalued Fixed Assets over its Original Cost is withdrawn from Revaluation Reserve Account(to the extent the Reserve is available) and credited to the Statement of Profit and Loss.

D. INVENTORIES:

a. Inventories are valued at the lower of Cost and Net Realisable Value.

b. Raw Materials and Packing Materials are valued at cost computed on FIFO basis. Cost includes cost of purchases, Excise Duties and Taxes and all other costs incurred in bringing the same to its present location and condition (net of Cenvat / Sales Tax set off, if any).

c. Cost of Finished Goods consists of direct cost and an appropriate share of related factory overheads. Excise duty is provided on closing stock of finished goods, wherever applicable.

E. REVENUE RECOGNITION:

a. Sales:

i. Sale of goods in respect of export sales are recognised as and when the shipment of goods takes place.

ii. Sale of goods in respect of export sales from overseas warehouses are recognized as and when the release order for goods is sent to the warehouse.

iii. Sale of goods in respect of domestic sales are recognised on despatch of goods to the customer net of VAT and Excise Duty. However, for the purpose of disclosure, Sales are disclosed at gross as reduced by Excise Duty.

iv. Sales are net of returns.

b. Export Incentives are accounted on export of goods, if the entitlement can be estimated with reasonable accuracy and conditions precedent to claims are fulfilled[Refer Note 21.2 of the Statement of Profit and loss]

c. Excise Duty Refund, Octroi Duty Refund and Sales Tax Set off, if any, is taken on accrual basis. Grants are recognised as accrued on the basis of sanction letter received from the concerned authorities.

d. Dividend income is recognised when the right to receive payment is established.

e. Interest income is recognised on a time proportionate basis taking into account the amount outstanding and the rate applicable.

f. Claims for insurance are accounted at the time of its lodgement with the Insurance Company.

F. FOREIGN CURRENCY TRANSACTIONS:

a. Transactions in foreign currency (monetary and non-monetary items) are recorded at exchange rates prevailing on the respective dates of the relevant transactions.

b. Monetary items (i.e. receivables, payables, loans, etc.), which are denominated in foreign currency are translated and reported using the exchange rates prevailing on the date of Balance Sheet. ,

c. Exchange differences arising on the settlement of monetary items or on reporting at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognised as income or expenses in the year in which they arise.

d. Non-monetary items denominated in foreign currency and carried at:

i. fair value / net realisable value, are translated at the exchange rate prevalent at the date when the fair value / net realisable value was determined;

ii. historical cost, as translated at the exchange rate prevalent at the date of transaction.

e. In case of forward contracts:

i. the premium or discount is recognised as income or expense over the period of the contract;

ii. the exchange differences are recognised in the Statement of Profit and Loss in the reporting period in which the exchange rates change;

iii. the exchange differences on settlement/restatement are recognised in the Statement of Profit and Loss for the period in which the forward contracts are settled/restated.

G. GRANTS:

a. Grants related to specific fixed assets are shown as deduction from the gross value of the assets.

b. Revenue grants are deducted from the related expense.

H. INVESTMENTS:

Long-term investments are stated at cost. A provision for diminution, if any, is made to recognise a decline, other than temporary, in the value of Investments. Current Investments are stated at cost.

I. EMPLOYEE BENEFITS:

Short-term employee benefits are recognised as an expense at the undiscounted amount in the Statement of Profit and Loss for the period in which the related service is rendered.

Long-term benefits:

Defined Contribution Plan:

Provident and Family Pension Fund

The eligible employees of the Company are entitled to receive post employment benefits in respect of provident and family pension fund, in which both employees and the Company make monthly contributions at a specified percentage of the employees'' eligible salary. The contributions are made to the Provident Fund Account under the Employees'' Provident Fund and Misc. Provisions Act, 1952. Provident Fund and Family Pension Fund are classified as Defined Contribution Plans as the Company has no further obligations beyond making the contribution. The Company''s contributions to Defined Contribution Plan are charged to the Statement of Profit and Loss as incurred.

Defined Benefit Plan:

1. Gratuity

The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees. The plan provides a lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service. Vesting occurs upon completion of five years of service. The Company makes contribution to the Group Gratuity Scheme with SBI Life Insurance Company Limited based on an independent actuarial valuation made at the year-end. Actuarial gains and losses are recognised in the Statement of Profit and Loss..

2. Compensated Absences:

The Company provides for the encashment of leave or leave with pay subject to certain rules. The employees are entitled to accumulate leave subject to certain limits for future encashment/ availment. The liability is recognised based on number of days of unutilized leave at each Balance Sheet date on the basis of an independent actuarial valuation. Actuarial gains and losses are recognised in the Statement of Profit and Loss.

3. Superannuation fund:

The superannuation fund benefits are administrated by a Trust formed for this purpose through the Group scheme of Life Insurance Corporation of India. The Company''s contribution*} superannuation fund are charged to the Statement of Profit and Loss as incurred.

J. BORROWING COSTS:

Borrowing costs, attributable to the acquisition/construction of qualifying assets are capitalised as part of the cost of such assets upto the commencement of commercial operations. Other borrowing costs are charged as an expense in the period in which the same are incurred. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use.

K. LEASES:

Assets taken on lease where significant portion of the risk and rewards of ownership are retained by the iessor are classified as operating leases. Lease rentals are charged to the Statement of Profit and Loss on accrual basis.

L. TAXATION:

a. Provision for current tax is made on the estimated taxable income of the period at the rate applicable to the relevant assessment year.

b. In accordance-with the Accounting Standard 22 - "Accounting for Taxes on Income", the deferred tax for the timing differences is measured using the tax rates and tax laws that have been enacted or substantially enacted by the Balance Sheet date.

Deferred tax assets are recognised only if there is a reasonable or virtual certainty, as may be applicable, that sufficient future taxable income will be available, against which they can be realised. The carrying amount of deferred tax assets is reviewed at each Balance Sheet date and reduced to the extent that it is no longer probable that sufficient taxable income will be available to allow all or part of the deferred tax asset to be utilised.

M. IMPAIRMENT OF ASSETS:

The Management periodically assesses, using external and internal sources, whether there is an indication that an asset may be impaired. An impairment loss is recognised wherever the carrying value of an asset exceeds its recoverable amount. The recoverable amount is the higher of the asset''s net selling price and value in use which means the present value of future cash Bows expected to arise from the continuing use of the asset and its eventual disposal.

N. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:

a. A provision is recognised, if as a result of past event, the Company has a present legal obligation that can be measured reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by the best estimate of the outflow of economic benefits required to settle the obligation at the reporting date. Where no reliable estimate can be made, a disclosure is made as contingent liability.

b. A disclosure for a Contingent Liability is made when there is a possible obligation or a present obligation that may, but probably will not, require outflow of resources. Where there is a possible obligation or present obligation where likelihood of outflow of resources is remote, no provision or disclosure is made.

c. Contingent Assets are neither recognised nor disclosed.


Sep 30, 2010

A. Accounting Convention:

The fnancial statements are prepared under historical cost convention on an accrual basis in accordance with the Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956, which have been prescribed by the Companies (Accounting Standards) Rules, 2006, and the relevant provisions of the Companies Act, 1956.

b. Use of Estimates:

The preparation of the fnancial statements in conformity with the Generally Accepted Accounting Principles requires Management to make estimates and assumptions to be made that effects the reported amounts of revenues and expenses during the reporting period, the reported amounts of assets and liabilities and the disclosure relating to the contingent liabilities on the date of the fnancial statements. Examples of such estimates include useful lives of Fixed Assets, provision for doubtful debts / advances, deferred tax, export incentives, provision for retirement benefts, etc. Actual results could differ from those estimates.

B. FIXED ASSETS:

a. Land (Freehold): At cost except Land at Deonar, Mumbai, which is refected at revalued amount;

b. Buildings: At cost less depreciation and grants related to specifc assets except buildings at Deonar, Mumbai, which are refected at revalued amount less depreciation;

c. Other Fixed Assets: At cost less depreciation.

Cost for the aforesaid purpose comprises of its purchase price, including import duties and other non-refundable taxes and levies and any directly attributable cost of bringing the asset to its working condition for its intended use; trade discount and rebate, if any, are deducted in arriving at the purchase price;

C. DEPRECIATION:

a. Depreciation on Fixed Assets is provided on the straight-line method, at the rates prescribed under Schedule XIV to the Companies Act, 1956.

b. Assets costing below Rs.5,000 have been depreciated fully in the year of acquisition.

c. The amount of depreciation on the Revalued Fixed Assets over its Original Cost is withdrawn from Revaluation Reserve Account(to the extent the Reserve is available) and credited to the Proft and Loss Account.

D. INVENTORIES:

a. Inventories are valued at Cost or Net Realisable Value whichever is less.

b. Cost of Raw Materials and Packing Materials are valued at cost computed on FIFO basis. Cost includes all costs of purchase, Excise Duties and Taxes and all other costs incurred in bringing the same to its present condition and location (net of Cenvat/ Sales tax set off, if any).

c. Cost of Finished Goods consists of direct cost and an appropriate share of related factory overheads. Excise duty is provided on closing stock of fnished goods, wherever applicable.

E. REVENUE RECOGNITION:

a. Sales:

i. Sale of goods in respect of export sales are recognised as and when the shipment of goods takes place.

ii. Sale of goods in respect of export sales from overseas warehouses are recognized as and when the release order for goods is sent to the warehouse.

iii. Sale of goods in respect of domestic sales are recognised on despatch of goods to the customer net of VAT and excise duties.

iv. Sales are net of returns.

b. Export Incentives are accounted for on export of goods, if the entitlement can be estimated with reasonable accuracy and conditions precedent to claims are fulflled (Refer Note 8 to Accounts of Schedule 15).

c. Excise Duty Refund, Octroi Duty Refund and Sales Tax Set off, if any, is taken on accrual basis. Grants are recognised as accrued on the basis of sanction letter received from the concerned authorities.

d. Dividend income is recognised when the right to receive payment is established.

e. Interest income is recognised on a time proportionate basis taking into account the amount outstanding and the rate applicable.

F. FOREIGN CURRENCY TRANSACTIONS:

a. Transactions in foreign currency are recorded at exchange rates prevailing on the respective dates of the relevant transactions.

b. Monetary items which are denominated in foreign currency are translated at the exchange rates prevailing at the Balance Sheet date and proft/loss on translation thereon is credited/charged to the Proft and Loss Account.

c. Non-monetary items denominated in foreign currency and measured at:

- fair value / net realisable value, are translated at the exchange rate prevalent at the date when the fair value / net realisable value was determined;

- historical cost, are translated at the exchange rate prevalent at the date of transaction.

d. In case of forward contracts:

- the premium or discount is recognised as income or expense over the period of the contract;

- the exchange differences are recognised in the Proft and Loss account in the reporting period in which the exchange rates change;

- the exchange differences on settlement/restatement are recognised in the Proft and Loss account in the period in which the forward contracts are settled/restated.

G. GRANTS:

a. Grants related to specifc fxed assets is shown as deduction from the gross value of the assets.

b. Revenue grants are deducted from the related expense.

H. INVESTMENTS:

Long term investments are stated at cost. A provision for diminution, if any, is made to recognise a decline, other than temporary, in the value of Investments.

I. EMPLOYEE BENEFITS:

Short term employee benefts are recognised as an expense at the undiscounted amount in the proft and loss account of the year in which the related service is rendered.

Long term benefts:

Defned Contribution Plan:

Provident and Family Pension Fund

The eligible employees of the Company are entitled to receive post employment benefts in respect of provident and family pension fund, in which both employees and the Company make monthly contributions at a specifed percentage of the employees eligible salary. The contributions are made to the Provident Fund Account under the Employees Provident Funds and Misc. Provisions Act, 1952. Provident Fund and Family Pension Fund are classifed as Defned Contribution Plans as the Company has no further obligations beyond making the contribution. The Companys contributions to Defned Contribution Plan are charged to proft and loss account as incurred.

Defned Beneft Plan:

1. Gratuity

The Company has an obligation towards gratuity, a defned beneft retirement plan covering eligible employees. The plan provides a lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service. Vesting occurs upon completion of fve years of service. The Company makes contribution to the Group Gratuity Scheme with SBI Life Insurance Company Limited based on an independent actuarial valuation made at the year-end. Actuarial gains and losses are recognised in the proft and loss account.

2. Compensated absences

The Company provides for the encashment of leave or leave with pay subject to certain rules. The employees are entitled to accumulate leave subject to certain limits for future encashment/ availment. The liability is recognised based on number of days of unutilized leave at each balance sheet date on the basis of an independent actuarial valuation. Actuarial gains and losses are recognised in the proft and loss account.

3. Superannuation fund

The superannuation fund benefts are administrated by a trust formed for this purpose through the group scheme of Life Insurance Corporation of India.

J. BORROWING COSTS:

Borrowing costs, attributable to the acquisition/construction of qualifying assets are capitalised as part of the cost of such assets upto the commencement of commercial operations. Other borrowing costs are charged as an expense in the period in which the same are incurred. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use.

K. LEASES:

Assets taken on lease where signifcant portion of the risk and rewards of ownership are retained by the lessor are classifed as operating leases. Lease rentals are charged to the Proft and Loss Account on accrual basis.

L. TAXATION:

a. Provision for current tax is made on the estimated taxable income of the period at the rate applicable to the relevant assessment year.

b. In accordance with the Accounting Standard 22– "Accounting for taxes on Income", the deferred tax for the timing differences is measured using the tax rates and tax laws that have been enacted or substantially enacted by the Balance Sheet date.

Deferred tax assets are recognised only if there is a reasonable or virtual certainty, as may be applicable, that suffcient future taxable income will be available, against which they can be realised. The carrying amount of deferred tax assets is reviewed at each Balance Sheet date and reduced to the extent that it is no longer probable that suffcient taxable income will be available to allow all or part of the deferred tax asset to be utilised.

M. IMPAIRMENT OF ASSETS:

The Management periodically assesses, using external and internal sources, whether there is an indication that an asset may be impaired. An impairment loss is recognised wherever the carrying value of an asset exceeds its recoverable amount. The recoverable amount is the higher of the assets net selling price and value in use which means the present value of future cash fows expected to arise from the continuing use of the asset and its eventual disposal.

N. TREATMENT OF CONTINGENT LIABILITIES:

a. A provision is recognised, if as a result of past event, the Company has a present legal obligation that can be measured reliably, and it is probable that an outfow of economic benefts will be required to settle the obligation. Provisions are determined by the best estimate of the outfow of economic benefts required to settle the obligation at the reporting date. Where no reliable estimate can be made, a disclosure is made as contingent liability.

b. A disclosure for a Contingent Liability is made when there is a possible obligation or a present obligation that may, but probably will not, require outfow of resources. Where there is a possible obligation or present obligation where likelihood of outfow of resources is remote, no provision or disclosure is made.

c. Contingent Assets are neither recognized nor disclosed.


Sep 30, 2009

A. BASIS OF ACCOUNTING

a. Accounting Convention:

The financial statements are prepared under historical cost convention on an accrual basis in accordance with the Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956, which have been prescribed by the Companies (Accounting Standards) Rules, 2006, and the relevant provisions of the Companies Act, 1956.

b. Use of Estimates:

The preparation of the financial statements in conformity with the Generally Accepted Accounting Principles requires Management to make estimates and assumptions to be made that effects the reported amounts of revenues and expenses during the reporting period, the reported amounts of assets and liabilities and the disclosure relating to the contingent liabilities on the date of the financial statements. Examples of such estimates include useful lives of Fixed Assets, provision for doubtful debts / advances, deferred tax, export incentives, provision for retirement benefits, etc. Actual results could differ from those estimates.

B. FIXED ASSETS:

a. Land (Freehold): At cost except Land at Deonar, Mumbai, which is reflected at revalued amount;

b. Buildings: At cost less depreciation and grants related to specific assets except buildings at Deonar, Mumbai, which are reflected at revalued amount less depreciation;

c. Other Fixed Assets: At cost less depreciation. Cost for the aforesaid purpose comprises of its purchase price, including import duties and other non-refundable taxes and levies and any directly attributable cost of bringing the asset to its working condition for its intended use; trade discount and rebate, if any, are deducted in arriving at the purchase price;

C. DEPRECIATION: a. Depreciation on Fixed Assets is provided on the straight-line method, at the rates prescribed under Schedule XIV to the Companies Act, 1956.

b. Assets costing below Rs.5,000 have been depreciated fully in the year of acquisition.

c. The amount of depreciation on the Revalued Fixed Assets over its Original Cost is withdrawn from Revaluation Reserve Account(to the extent the Reserve is available) and credited to the Profit and Loss Account.

D. INVESTMENTS:

Long term investments are stated at cost. A provision for diminution, if any, is made to recognise a decline, other than temporary, in the value of Investments.

E. INVENTORIES:

a. Inventories are valued at Cost or Net Realisable Value whichever is less.

b. Cost of Raw Materials and Packing Materials are valued at cost computed on FIFO basis. Cost includes all costs of purchase, Excise Duties and Taxes and all other costs incurred in bringing the same to its present condition and location . (net of Cenvat / Sales tax set off, if any).

c. Cost of Finished Goods consists of direct cost and an appropriate share of related factory overheads. Excise duty is provided on closing stock of finished goods, wherever applicable.

F. TREATMENT OF CONTINGENT LIABILITIES:

a. A provision is recognised, if as a result of past event, the Company has a present legal obligation that can be measured reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by the best estimate of the outflow of economic benefits required to settle the obligation at the reporting date. Where no reliable estimate can be made, a disclosure is made as contingent liability.

b. A disclosure for a Contingent Liability is made when there is a possible obligation or a present obligation that may, but probably will not, require outflow of resources. Where there is a possible obligation or present obligation where likelihood of outflow of resources is remote, no provision or disclosure is made.

c. Contingent Assets are neither recognized nor disclosed.

G. REVENUE RECOGNITION:

a. Sales:

i. Sale of goods in respect of export sales are recognised as and when the shipment of goods takes place.

ii. Sale of goods in respect of export sales from overseas warehouses are recognized as and when the release order for goods is sent to the warehouse.

iii. Sale of goods in respect of domestic sales are recognised on despatch of goods to the customer net of VAT and excise duties.

iv. Sales are net of returns.

b. Export Incentives are accounted for on export of goods, if the entitlement can be estimated with reasonable accuracy and conditions precedent to claims are fulfilled (Refer Note 8 to Accounts of Schedule "15).

c. Excise Duty Refund, Octroi Duty Refund and Sales Tax Set off, if any, is taken on accrual basis. Grants are recognised as accrued on the basis of sanction letter received from the concerned authorities.

d. Dividend income is recognised when the right to receive payment is established.

e. Interest income is recognised on a time proportionate basis taking into account the amount outstanding and the rate applicable.

H.FOREIGN CURRENCY TRANSACTION:

a. Transactions in foreign currency are recorded at exchange rates prevailing on the respective dates of the relevant transactions.

b. Monetary items which are denominated in foreign currency are translated at the exchange rates prevailing at the Balance Sheet date and profit/loss on translation thereon is credited/charged to the Profit and Loss Account.

c. Non-monetary items denominated in foreign currency and measured at-:

- fair value / net realisable value are translated at the exchange rate prevalent at the date when the fair value / net realisable value was determined;

- historical cost are translated at the exchange rate prevalent at the date of transaction.

d. In case of forward contracts:

- the premium or discount is recognised as income or expense over the period of the contract;

- the exchange differences are recognised in the Profit and Loss account in the reporting period in which the exchange rates change;

- the exchange differences on settlement/restatement are recognised in the Profit and Loss account in the period in which the forward contracts are settled/restated.

I.GRANTS:

a. Grants related to specific fixed assets is shown as deduction from the gross value of the assets

b. Revenue grants are deducted from the related expense.

J. EMPLOYEE BENEFITS:

Short term employee benefits are recognised as an expense at the undiscounted amount in the profit and loss account of the year in which the related service is rendered.

Long term benefits:

Defined Contribution Plan: Provident and Family Pension Fund

The eligible employees of the Company are entitled to receive post employment benefits in respect of provident and family pension fund, in which both employees and the Company make monthly contributions at a specified percentage of the employees eligible salary (currently 12% of employees eligible salary). The contributions are made to the Central Provident Fund under the State Pension Scheme. Provident Fund and Family Pension Fund are classified as Defined Contribution Plans as the Company has no further obligations beyond making the contribution. The Companys contributions to Defined Contribution Plan are charged to profit and loss account as incurred.

Defined Benefit Plan:

1. Gratuity

The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees. The plan provides a lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service. Vesting occurs upon completion of five years of service. The Company makes contribution to the Group Gratuity Scheme with SBI Life Insurance Company Limited based on an independent actuarial valuation made at the year-end. Actuarial gains and losses are recognised in the profit and loss account.

2. Compensated absences

The Company provides for the encashment of leave or leave with pay subject to certain rules. The employees are entitled to accumulate leave subject to certain limits for future encashment/ availment. The liability is recognised based on number of days of unutilized leave at each balance sheet date on the basis of an independent actuarial valuation. Actuarial gains and losses are recognised in the profit and loss account.

3. Superannuation fund

The superannuation fund benefits are administrated by a trust formed for this purpose through the group scheme of Life Insurance Corporation of India.

K. BORROWING COSTS:

Borrowing costs, attributable to the acquisition/construction of qualifying assets are capitalised as part of the cost of such assets upto the commencement of commercial operations. Other borrowing costs are charged as an expense in the period in which the same are incurred. A qualifying asset is one that necessarily takes a substantial period of time to get ready for intended use.

L. LEASES:

Assets taken on leases where significant portion of the risk and rewards of ownership are retained by the lessor are classified as operating leases. Lease rentals are charged to the Profit and Loss Account on accrual basis.

M. TAXATION:

a. Provision for current tax is made on the estimated taxable income of the period at the rate applicable to the relevant assessment year.

b. In accordance with the Accounting Standard 22 - "Accounting for taxes on Income", the deferred tax for the timing differences is measured using the tax rates and tax laws that have been enacted or substantially enacted by the Balance Sheet date.

Deferred tax assets are recognised only if there is a reasonable or virtual certainty, as may be applicable, that sufficient future taxable income will be available, against which they can be realised. The carrying amount of deferred tax assets is reviewed at each Balance Sheet date and reduced to the extent that it is no longer probable that sufficient taxable income will be available to allow all or part of the deferred tax asset to be utilised

c. Provision for Fringe Benefit Tax is made in accordance with the provisions of the Income-Tax Act, 1961.

N. RESEARCH AND DEVELOPMENT:

Revenue Expenditure on Research is charged against Profit and Loss Account of the year in which it is incurred.

Capital Expenditure on Development is shown as an addition to Fixed Assets.

O. IMPAIRMENT OF ASSETS:

The Management periodically assesses using, external and internal sources, whether there is an indication that an asset may be impaired. An impairment loss is recognised wherever the carrying value of an asset exceeds its recoverable amount. The recoverable amount is the higher of the assets net selling price and value in use which means the present value of future cash flows expected to arise from the continuing use of the asset and its eventual disposal.


Sep 30, 2003

A. BASIS OF ACCOUNTING

The financial statement are prepared under historical cost convention on an accrual basis except for medical re-imbursements and leave travel allowance, and are in accordance with the requirements of the Companies Act, 1956 and mandatory Accounting Standards.

B. FIXED ASSETS:

a) Land (Freehold) :At Cost except at Deonar, Mumbai, which is shown at revalued amount.

b) Building : At cost less depreciation except buildings at Deonar, Mumbai, which are shown at revalued amount less depreciation.

c) Other Fixed Assets : At Cost less depreciation. Cost for the aforesaid purpose comprises of its purchase price and any attributable costs of bringing the asset to its working condition for its intended use, net of duties recoverable, if any.

C. DEPRECIATION:

a) In respect of items of Fixed Assets acquired/purchased up to 31st January, 1988 on straight line basis in terms of section 205(2)(b)of the Companies Act, 1956 prior to the amendment enacted vide the Companies (Amendment) Act, 1988. Accordingly, in respect of all the assets acquired prior to 31st January, 1988 the depreciation is provided for the year as per equivalent straight line rates based on the depreciation rates prescribed under the Income Tax Rule Prevalent at the relevant time.

b) In respect of Fixed Assets acquired/purchased on or after 1st February, 1988 but before 16th December 1993 on straight line basis as per the then prevailing rates prescribed under schedule XIV of the Companies Act, 1956.

c) In respect of Fixed Assets acquired/purchased on or after 16th December 1993 on straight line method at the rates and on the basis specified under Schedule XIV to the Companys Act, 1956 as revised by Notification No.G.S.R. 756E dated 16th December 1993 and further revised by notification No.101E of the Department of Company Affairs, and for Assets costing below Rs.5000/- purchased on or after 16th December, 1993 the entire cost has been written off fully in the year of acquisition.

d) Patent & Trade marks are written off over a period of 14 years.

e) The excess depreciation provided on the revalued assets as reduced by that on the original cost of the assets is transferred from Revaluation Reserve (to the extent the Reserve is available) and credited to Profit and Loss Account.

D. INVESTMENTS:

Long term investments are stated at cost. Provision is made for permanent diminution in the value if any, of such Investments.

E. INVENTORIES:

a. Raw Materials and Packing Materials are valued at a cost or net realisable value whichever is less, on FIFO basis .Cost for this purpose includes basic cost (net of Cenvat / Sales tax set off if any) and all direct expenses.

b. Finished Goods are valued at cost or net realisable value whichever is less . Cost consists of direct cost other related factory overheads. Excise duty is provided on closing stock of finished goods, wherever applicable, meant for local sales.

c. General Stores, Laboratory Chemicals etc. are written off in the year of purchase.

F. TREATMENT OF CONTINGENT LIABILITIES :

Contingent Liabilities are disclosed separately in Notes to Accounts and /or provided for depending upon the Management perception as to whether the said Liability is likely to materialise or not.

G.SALES:

Manufactured Goods:

a) Sale of goods in respect of export sales are recognised as and when the shipment of goods takes place and includes exchange differences arising on sales transactions.

b) Sale of goods in respect of export sales from overseas warehouse are recognized as and when the release order for goods is sent to the warehouse.

c) Sale of goods in respect of domestic sales are recognised on despatch of goods to the customer. Sales are net of return.

H. FOREIGN CURRENCY TRANSACTION:

Foreign Currency Transactions are accounted at average monthly Exchange Rate. The overall Gain/(Loss) on settlement/realisation is credited/charged to the Profit & Loss Account.

I. REVENUE RECOGNITION:

Duty drawback, Excise Duty Refund, Octroi Duty Refund & Sales Tax Set off, is taken on accrual basis.

J. PRIOR PERIOD ITEMS:

Income and Expenditure pertaining to prior period, wherever material, are disclosed separately.

K. RETIREMENT BENEFITS:

i. Companys contribution to recognised provident fund and family pension fund is charged to Profit & Loss Account on accrual basis.

ii. Provision for gratuity and leave encashment, are based on actuarial valuations as on the Balance Sheet date.

iii. The superannuation fund benefits are administrated by a trust formed for this purpose through the group scheme of Life Insurance Corporation of India.

L. RESEARCH & DEVELOPMENT :

Revenue Expenditure on Research & Development is charged against Profit & Loss Account of the year in which it is incurred. Capital Expenditure on Research & Development is shown as an addition to Fixed Assets.

M. DEFERRED REVENUE EXPENDITURE:

In respect of items of expenditure considered deferred, the Company charges such expenditure over its estimated useful life as the benefit is expected to accrue evenly.

N. TAXATION:

Income tax expense is accrued in accordance with Accounting Standard 22 - Accounting for Taxes on Income, issued by the Institute of Chartered Accountants of India, which includes current and deferred taxes. Deferred Income Taxes reflect the impact of current year timing differences between taxable income & accounting income for the year and reversal of timing differences of earlier years.

Deferred tax assets and liabilities are measured using the tax rate and tax laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax assets are recognized for all deductible timings differences, carry forward of unused tax assets and unused tax losses subject to consideration of prudence.

The carrying amount of deferred tax assets is reviewed at each balance sheet date on the same consideration.

O. LEASES :

Assets taken on leases were significant portion of the risk and rewards of ownership are retained by the lessor are classified as operating leases. Lease rentals are charged to the Profit and Loss Account on accrual basis.

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