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Accounting Policies of Gillanders Arbuthnot & Company Ltd. Company

Mar 31, 2015

1. Basis of Accounting

These financial statements of the Company have been prepared to comply in all material aspects with all the applicable accounting principles in India (Indian GAAP), the applicable accounting standards as prescribed under section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013, to the extent notified. The financial statements has been prepared under the historical cost convention on an accrual basis.

2. Use of Estimates

The preparation of financial statements in conformity with Indian GAAP requires judgements, estimates and assumptions to be made that affect the reported amount of assets and liabilities, disclosure of contingent liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognised in the period in which the results are known/materialised.

3. Tangible Fixed Assets

Tangible fixed assets are stated at cost less accumulated depreciation and cumulative impairment losses, if any. Cost includes duties, taxes, incidental expenses, erection/commissioning expenses and borrowing cost attributable to qualifying assets up to the date, the asset is put to use. The cost of extension planting on cultivable land including cost of development is capitalised.

4. Intangible Assets

Intangible assets are stated at cost less accumulated amortisation and cumulative impairment losses, if any. Costs incurred on intangible assets, resulting in future economic benefits are capitalised as intangible assets.

5. Depreciation & Amortisation

a) Depreciation on tangible fixed assets is provided under Straight Line Method at rates determined based on useful lives of the respective assets and the residual values in accordance with Schedule II of the Companies Act, 2013 or re- assessed by the Company based on technical evaluation except in respect of the following where written down value method is followed:

i) In respect of assets under Company's Engineering (MICCO) Division.

ii) In respect of Tea Division, assets acquired from Kothari Plantations and Industries Limited amalgamated with the Company.

b) In respect of spares for specific machinery cost of such spare is amortised over the useful lives of the related machinery as estimated by the management.

c) Leasehold land is amortised over the lease period.

d) Computer software is amortised over a period of five years.

6. Impairment of Assets

The carrying amounts of fixed assets are reviewed at each balance sheet date to determine, if there is any indication of impairment based on internal/external factors. An impairment loss is recognised wherever the carrying amount of the fixed assets of a cash generating unit exceeds its recoverable amount. The impairment loss recognised in prior accounting periods is reversed if there has been a change in the estimate of the recoverable amount.

7. Investments

Long Term Investments are stated at cost with an appropriate provision for diminution in value, other than temporary in nature, in the valuation of long term investments. Current Investments are stated at lower of cost and fair value. Gains/Losses on disposal of investments are recognised as income/expenditure.

8. Foreign Currency Transactions

Transactions in foreign currencies are recognised at the rate existing at the time of such transactions. Gain or Loss resulting from the settlement of such transactions is recognised in the Statement of Profit and Loss. At the Balance Sheet date, monetary items denominated in foreign currency are translated at year-end rates or the forward cover rates as applicable. The resultant translation differences, if any, are recognised in the Statement of Profit and Loss.

9. Derivative Instruments

The Company uses forward exchange contracts to hedge its risks associated with foreign currency fluctuations relating to the underlying transactions, highly probable forecast transactions and firm commitments. In respect of forwards exchange

contracts with underlying transactions, the premium or discount arising at the inception of such contract is amortized as expense or income over the life of contract. Other forwards exchange contracts outstanding at the Balance Sheet date are marked to market and in case of loss the same is provided for in the financial statements. Any profit or losses arising on cancellation of forward exchange contracts are recognised as income or expense for the period.

10. Inventories

Inventories are valued as under: -

a) Stores and Spare Parts - At cost (on weighted average basis) or net realisable value whichever is lower.

b) Raw Materials - At cost (on weighted average basis) or net realisable value whichever is lower.

c) Stock in Process - Is valued with material at lower of weighted average cost and market rate less estimated conversion cost.

d) Finished Goods / - For long term contracts, contract in Stock in Trade / progress is valued at realisable Contract in Progress value/ contractual rate and provision for losses, as may be estimated for completion thereof.

- Others - At cost or net realisable value whichever is lower.

e) Waste / Scrap - Waste and Scrap are valued at estimated realisable value.

11. Employee Benefits

a) Short Term Employee Benefits (i.e. benefits payable within one year) are recognized in the period in which employee services are rendered.

b) Post-employment and other long term employee benefits are recognized as an expense in the Statement of Profit and Loss for the year in which the employee has rendered services. The expense is recognized at the present value of the amounts payable determined using actuarial valuation techniques.

c) Actuarial gains/losses arising under Defined Benefit Plans are recognized immediately in the Statement of Profit and Loss as income/expense for the year in which they occur.

12. Provisions, Contingent Liabilities and Contingent Assets

i) Provisions are recognised for liabilities that can be measured only by using a substantial degree of estimation, if

a) the Company has a present obligation as a result of a past event;

b) a probable outflow of resources is expected to settle the obligation; and

c) the amount of the obligation can be reasonably estimated.

ii) Reimbursement expected in respect of expenditure required to settle a provision is recognised only when it is virtually certain that the reimbursement will be received. Contingent liability is disclosed in case of

a) present obligation arising from past events, when it is not probable that an outflow of resources will be required to settle the obligation;

b) present obligation when no reliable estimate is possible; and

c) a possible obligation arising from past events where the probability of outflow of resources is not remote.

iii) Contingent Assets are neither recognised, nor disclosed.

Provisions, Contingent Liabilities and Contingent Assets are reviewed at each Balance Sheet date.

13. Recognition of Income and Expenditure

Items of income and expenditure are recognised on accrual and prudent basis. Contract Revenue is recognised by reference to the stage of completion of the contract activity at the reporting date of the financial statements on the basis of percentage of completion method. Percentage of completion is the proportion of cost of work performed to-date, to the total estimated contract costs. Expected loss, if any, on the construction/project related activity is recognized as an expense in the period in which it is foreseen, irrespective of the stage of completion of the contract. While determining the amount of foreseeable loss, all elements of costs and related incidental income not included in contract revenue is taken into consideration. Dividends income is recognised when right to receive is established. Interest income is recognised on time proportion basis taking into account the amount outstanding and rate applicable.

14. Taxes on Income

Income tax expense comprises current tax and deferred tax charge. Current tax is determined as the amount of tax payable in respect of taxable income for the year based on applicable tax rates and laws. Deferred tax is recognised on timing differences being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets are recognised only if there is reasonable / virtual certainty that sufficient future taxable income will be available against which such deferred tax assets will be realised.

Such assets are reviewed as at each Balance Sheet date to reassess the realizability thereof. Deferred tax assets and liabilities are measured using the tax rates and the tax laws that have been enacted or substantively enacted by the Balance Sheet date.

15. Leases

For assets acquired under Operating Lease, rentals payable are charged to Statement of Profit and Loss. Assets acquired under Finance Lease are capitalised at lower of the Fair Value and Present Value of Minimum Lease Payments. Lease income from operating leases is recognised in the Statement of Profit and Loss over the period of Lease.

16. Government Grants

Government Grants related to specific Tangible fixed assets are deducted from gross values of related assets in arriving at their book value. Government Grants related to revenue are recognised in Statement of Profit and Loss.

17. Borrowing Costs

Borrowing costs that are attributable to the acquisition, construction or production of a qualifying asset are capitalised as part of cost of such asset till such time the asset is ready for its intended use or sale. A qualifying asset is an asset that necessarily requires a substantial period of time to get ready for its intended use or sale. All other borrowing costs are recognised as an expense in the period in which they are incurred.


Mar 31, 2013

1.1 Basis of Accounting

These Financial Statements are prepared to comply in all material aspects with all the applicable accounting principles In India, the applicable accounting standards notified under Section 211 {3C} of the Companies Act, 1956 (the ''Act'') and the relevant provisions of the Act.

1.2 Tangible Fixed Assets

Fixed assets are started at cost less accumulated depreciation and cumulative impairment losses, if any. Cost includes duties, taxes. Incidental expenses, erection/commisioning expenses and borrowing cost attributable to qualifying assets up to the date, the asset is put to use. The cost of extension planting on cultivable land Including cost of development is capitalised.

1.3 Intangible Assets

Costs incurred on intangible assets, resulting in future economic benefits are capitalised as intangible assets, Intangible assets are stated at cost less accumulated amortisation and cumulative impairment losses, if any,

1.4 Depredation a Amortisation

a) Depredation is calculated Ii the manner and at applicable rates specified in Schedule XIV of the Act under straight line method except in respect of the following where written down value method is followed;

i) In respect of assets under Company''s Engineering (MICCO) Division.

ii) In respect of Tea Division, assets acquired from Kothari Plantations and Industries Limited amalgamated with the Company.

iii) In respect of Textile Division, the assets acquired before April, 2001 of GIS Cotton Mill Limited amalgamated with the Company.

b) In respect of spares for specific machinery cost of such spare is amortised over the useful lives of the related machinery as estimated by the management.

c) Leasehold land is amortised over the lease period.

d) Computer software is amortised over a period of five years.

1.5. Impairment or Assets

The carrying amounts of Fixed Assets are reviewed at each balance sheet date to determine, if there is any indication of Impairment based on internal/external factors. An Impairment loss is recognised wherever the carrying amount of the fixed assets of a & cash generating unit exceeds its net selling price or value in use whichever is higher

1.6 Investments

Long Term investments are stated at cost with an appropriate provision for diminution in value, other than temporary in nature. In the valuation of long term Investments. Current Investments are stated at lower of cost and fair value. Gains/Losses on disposal of investments are recognised as income/expenditure.

1.7 Foreign Currency Transactions

Transactions in foreign currencies are recognised at the rate existing at the time of such transactions.Gain or Loss resulting from the settlement of such transactions is reconised in the Statement of Profit and Loss. At the Balance Sheet date, monetary items denominated in foreign currency are translated at year-end rates or the forward cover rates as applicable. The resultant translation differencec, if any, are recognised in the Statement of Profit and Loss.

1.3 Derivative Instruments

The company uses forward exchange contracts to hedge its risks associated with foreign currency fluctuations relating to the underlying transactions, highly probable forecast transactions and firm commitments. In respect of forwards exchange contracts with underlying transactions, the premium or discount arising at the inception of such contract is amortised as expens or income over the life of contract. Ohter forwards exchange contracts outstanding at the Balance Sheet date are marked to market and in case of loss the same is provided for in the financial statement. Any profit or losses arising on cancellation of forward exchange contracts are recognised as income or expense for the period.

1.9 Inventories

Inventories are valued as under: -

a} Stores and Spars Parts - At cost (on weighted average basis) or net realisable value whichever is lower.

b) Raw Materials - At cost (on weighted average base) or net realisable value whichever is lower.

c) Stock In Process - Is valued with material at lower weighted average cost and market rate less estimated conversion cost.

d) Finished Goods/Stock in Trade/ Contract in Progress - For long term contracts, contract in progress is valued at realisable value and provision for losses, as may be estimated for completion thereof.

- Others-At cost or net realisable value whichever is lower.

- Waste and Scrap are valued at estimated realisable value.

e) Waste/ Scrap - Waste and Scrap are valued at estimated realisable value.

1. 10 Employee Benefits

a) Short Term Employee Benefits (I.e. benefits payable within one year) are recognised In the period In which employee services are rendered.

b) Post-employment and other long term employee benefits are recognised as an expense in the Statement of Profit and Loss for the year in which the employee has rendered services. The expense is recognised at the present value of the amounts payable determined using actuarial valuation techniques.

c) Actuarial gains/losses arising under Defined Benefit Plans are recognised Immediately in the Statement of Pofit and Loss as income/expense for the year in which they occur.

1.11 Provisions, Contigent Liabilities and Contingent Assets

I) Provisions are recognised for labilities that can be measured only by using a substantial degree of estimation, If

a) the Company has a present obligation as 3 result of a past event;

b) a probable outflow of resources is expected to settle the obligation; and and

c) the amount of the obligation can be reasonably estimated.

ii) Reimbursement expected in respect of expenditure required to settle a provision is reconised only when it is virtually certain that the reimbursement will be received. Contingent liability is disclosed in case of

a) present obligation arising from past events, when it is not probable that an outflow of resources will be required to settle the obligation; pgation;

b) present oblication when no reliable estimate is possible;and

c) a possible obligation arising from past events where the probability of outflow of resources is not remote.

iii) Contingent Assets are neither recognised, nor disclosed.

Provisions, Contingent Liabilities and Contingent Assets are reviewed at each Balance Sheet date.

1.12 Recognition of Income and Expenditure

Items of income and expenditure are recognised on accrual and prudent basis. Revenue from Construction Contracts is recognised based on the percentage completion method stated on the basis of physical measurement of work actually completed at the Balance Sheet date taking into account the contractual price and revision thereto and related liabilities. Dividends income is recognised when right to receive is established. Interest income is recognised on time proportion basis taking into account the amount outstanding and rate applicable.

1.13 Taxes on Income

Income tax expense- comprises current tax and deferred tax charge. Current tax is determined as the amount of tax payable in resspect of taxable income for the year based on applicable tax rates and laws. Deffered tax is recognised on timing differences; being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets are recognised only if there is reasonable / virtual certainly that sufficient future taxable Income will be available against which such deferred tax assets will be realised. Such assets are reviewed as at each Balance Sheet date to reassess the realizability thereof.

1.14 Leases

For assets acquired under Operating Lease, rentals payable are charged to Statement of Prifit and Loss. Assets acquired under Finance Lease are capitalised at lower of the Fair Value and Present Value of Minimum Lease Payments. Lease income from operating leases is recognised in the Statement of Profit and Loss over the period of Lease.

1.15 Government Grants

Government Grants related to specific Tangible fixed assets are deducted from gross values or related assets in arriving at their, book value. Government Grants related to revenue are recognised in Statement of Profit and Loss.

1.16 Borrowing Costs

Borrowing costs out are attributable to the acquisition, construction or production of a qualifying asset are capitalised at part of cost of such asset till such time the asset is ready for its intended use or sale. A qualifying asset is an asset that nesessarily requires a substantial period of time to get ready for its Intended use or sale. All other borrowing costs are recognised as an expense in the period in which they are incurred.


Mar 31, 2012

1.1 Basis of Accounting

These Financial Statements are prepared to comply in all material aspects with all the applicable accounting principles in India, the applicable accounting standards notified under Section 211 (3C) of the Companies Act, 1956 (the 'Act') and the relevant provisions of the Act.

1.2 Tangible Fixed Assets

Fixed assets are stated at cost less accumulated depreciation and cumulative Impairment losses, if any. Cost includes duties, taxes, incidental expenses, erection/commissioning expenses and borrowing cost attributable to qualifying assets up to the date, the asset is put to use. The cost of extension planting on cultivable land including cost of development is capitalized.

1.3 Intangible Assets

Costs incurred on intangible assets, resulting in future economic benefits are capitalized as intangible assets. Intangible assets are stated at cost less accumulated amortization and accumulated impairment loss, if any.

1.4 Depreciation & Amortization

a) Depreciation is calculated in the manner and at applicable rates specified in Schedule XIV of the Companies Act, 1956 under straight line method except in respect of the following where written down value method is followed:

i) In respect of assets under Company's Engineering (MICCO) Division.

ii) In respect of Tea Division, assets acquired from Kothari Plantations and Industries Limited amalgamated with the Company.

iii) In respect of Textile Division, the assets acquired before April, 2001 of GIS Cotton Mill Limited amalgamated with the Company.

b) In respect of spares for specific machinery cost of such spare is amortized over the useful lives of the related machinery as estimated by the management.

c) Leasehold land is amortized over the lease period.

d) Computer software is amortized over a period of five years.

1.5 Impairment of Assets

The carrying amounts of Fixed Assets are reviewed at each balance sheet date to determine, if there is any indication of impairment based on internal/external factors. An impairment loss is recognized wherever the carrying amount of the fixed assets of a cash generating unit exceeds its net selling price or value in use whichever is higher.

1.6 Investments

Long Term Investments are stated at cost with an appropriate provision for diminution in value, other than temporary in nature, in the valuation of long term investments. Current Investments are stated at lower of cost and fair value. Gains/ Losses on disposal of investments are recognized as income /expenditure.

1.7 Foreign Currency Transactions

Transactions in foreign currencies are recognized at the rate existing at the time of such transactions. Gain or Loss resulting from the settlement of such transactions is recognized in the Profit and Loss. At the Balance Sheet date, monetary items denominated in foreign currency are translated at year-end rates or the forward cover rates as applicable. The resultant translation differences, if any, are recognized in the Profit and Loss.

1.8 Inventories

Inventories are valued as under: -

a) Stores and Spare Parts - At cost (on weighted average basis) or net realizable value whichever is lower.

b) Raw Materials - At cost (on weighted average basis) or net realizable value whichever is lower.

c) Stock in Process - Is valued with material at lower of weighted average cost and market rate and estimated conversion cost.

d) Stock in Trade / Contract in Progress - Tea - At cost or net realizable value whichever is lower.

- For long term contracts, contract in progress is valued at realizable value and provision for losses, as may be estimated for completion thereof.

- Others - At cost or net realizable value whichever is lower.

e) Waste / Scrap - Waste and Scrap are valued at estimated realizable value.

1.9 Employee Benefits

a) Short Term Employee Benefits (i.e. benefits payable within one year) are recognized in the period in which employee services are rendered.

b) Post-employment and other long term employee benefits are recognized as an expense in the Statement of Profit and Loss for the year in which the employee has rendered services. The expense is recognized at the present value of the amounts payable determined using actuarial valuation techniques.

c) Actuarial gains/losses arising under Defined Benefit Plans are recognized immediately in the Statement of Profit and Loss as income/expense for the year in which they occur.

1.10 Provisions, Contingent Liabilities and Contingent Assets

i) Provisions are recognized for liabilities that can be measured only by using a substantial degree of estimation, if

a) the Company has a present obligation as a result of a past event,

b) a probable outflow of resources is expected to settle the obligation, and

c) the amount of the obligation can be reasonably estimated.

ii) Reimbursement expected in respect of expenditure required to settle a provision is recognized only when it is virtually certain that the reimbursement will be received. Contingent liability is disclosed in case of

a) present obligation arising from past events, when it is not probable that an outflow of resources will be required to settle the obligation;

b) present obligation when no reliable estimate is possible, and

c) a possible obligation arising from past events where the probability of outflow of resources is not remote.

iii) Contingent Assets are neither recognized, nor disclosed.

Provisions, Contingent Liabilities and Contingent Assets are reviewed at each Balance Sheet date.

1.11 Recognition of Income and Expenditure

Items of income and expenditure are recognized on accrual and prudent basis. Revenue from Construction Contracts is recognized based on the percentage completion method stated on the basis of physical measurement of work actually completed at the Balance Sheet date taking into account the contractual price and revision thereto. Dividends income is recognized when right to receive is established. Interest income is recognized on time proportion basis taking into account the amount outstanding and rate applicable.

1.12 Taxes on Income

Income tax expense comprises current tax and deferred tax charge. Current tax is determined as the amount of tax payable in respect of taxable income for the year based on applicable tax rates and laws. Deferred tax is recognized on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets are recognized only if there is reasonable / virtual certainty that sufficient future taxable income will be available against which such deferred tax assets will be realized. Such assets are reviewed as at each Balance Sheet date to reassess the reliability thereof.

1.13 Leases

For assets acquired under Operating lease, rentals payable are charged to Statement Profit and Loss. Assets acquired under Finance Lease are capitalized at lower of the Fair Value and Present Value of Minimum Lease Payments. Lease income from operating leases is recognized in the Statement Profit and Loss over the period of Lease.

1.14 Government Grants

Government Grants related to specific Tangible Fixed Assets are deducted from gross values of related assets in arriving at their book value. Government Grants related to revenue are recognized in Statement of Profit and Loss.

1.15 Borrowing Costs

Borrowing costs that are attributable to the acquisition, construction or production of a qualifying asset are capitalized as part of cost of such asset till such time the asset is ready for its intended use or sale. A qualifying asset is an asset that necessarily requires a substantial period of time to get ready for its intended use or sale. All other borrowing costs are recognized as an expense in the period in which they are incurred.

 
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