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Accounting Policies of Hindusthan National Glass & Industries Ltd. Company

Mar 31, 2015

A. accounting Convention

The financial statements, except in respect of certain Fixed Assets, which are stated at fair value or revalued amounts, have been prepared on the basis of the historical cost convention and on the accounting principles of a going concern. The financial statements have been prepared in accordance with the provisions of the Companies Act, 2013 and Accounting Standards as notified under Section 133 of the Companies Act, 2013, read together with paragraph 7 of the Companies (Accounts) Rules 2014.

b. use of estimates

The preparation of financial statements require management to make estimates and assumption that affect the reported amount of assets and liabilities and disclosures relating to contingent liabilities and assets as at the Balance Sheet date and the reported amounts of revenue and expenses during the year. Difference between the actual results and the estimates are recognized in the year in which the results are known materialized.

c. fixed assets

i. Fixed Assets are stated at cost of acquisition or cost of construction or at revalued amounts wherever such assets have been revalued or at fair value as the case may be.

ii. All direct expenditure relating to construction of project are capitalized as "Pre-operative & Trial Run Expenses (pending allocation)". Administrative and general overheads which are specifically attributable to the construction of the project and /or bringing it to the working conditions for intended use (Net of Revenue during the staid period) are also capitalized as 'Pre-operative & Trial Run Expenses (pending allocation)".

d. depreciation and amortization

tangible Assets

i. Depreciation has been provided as per the useful life specified under Schedule II to the Companies Act, 2013 on assets installed/acquired up to 31st March, 1990 on written down value method and in respect of additions thereafter on straight line method.

ii. Certain Plant and Equipments have been considered as continuous process plant as defend under Schedule II to the Companies Act, 2013 on the basis of technical evaluation.

iii. Depreciation on incremental cost arising on account of exchange difference is amortized on straight line method over the remaining life of the assets.

iv. Leasehold lands are amortized over the period of lease.

v. Assets costing Rs 5,000 or less are depreciated fully in the year of addition.

Intangible Assets

vi. Computer Software's are amortized on straight line method @ 33.33% over a period of three years.

e. impairment

Fixed Assets are reviewed at each balance sheet date for impairment. In case events and circumstances indicate any impairment, recoverable amount of fixed assets is determined. An impairment loss is recognized, whenever the carrying amounts of assets belonging to Cash Generating Unit (CGU) exceeds recoverable amount. Te recoverable amount is the greater of assets net selling price or its value in use. In assessing the value in use, the estimated future cash flows from the use of assets are discounted to their present value at appropriate rate. An impairment loss is reversed if there has been change in the recoverable amount and such loss either no longer exists or has decreased. Impairment loss/reversal thereof is adjusted to the carrying value of the respective assets, which in case of CGU, are allocated to its assets on a prorate basis.

f. investments

Non Current Investments are stated at cost, less provision for diminution in value other than temporary, if any. Current Investments are valued at cost or fair value whichever is lower.

g. inventories

Inventories are valued at the lower of cost or estimated net realizable value. In respect of Raw Materials, Stores and Spare Parts, Fuel and Packing Materials the cost includes the taxes and duties other than those recoverable from taxing authorities and other expenses incurred for procuring the same. In respect of Finished Goods and Work-in-Process the cost includes manufacturing expenses and appropriate portion of overheads. Te cost of inventories is determined on the weighted average basis.

h. foreign exchange transactions and derivatives

Transactions in foreign currencies are accounted for at the exchange rate prevailing on the date of the transaction. Foreign currency monetary assets and liabilities at the year-end are translated using closing exchange rates. Te loss or gain thereon and also on the exchange differences on settlement of the foreign currency transaction during the year are recognized as revenue or expenses in the Statement of Profit and Loss except in respect of noncurrent liabilities related to fixed assets/ capital work-in-progress in which case, these are adjusted to the cost of respective fixed assets/ capital work-in-progress.

Exchange differences arising with respect to forward contracts other than those entered into, to hedge foreign currency risk on unexecuted form commitments or of highly probable forecast transactions are recognized in the period in which they arise and the difference between the forwards rate and exchange rate at the date of transaction is recognized as revenue/expense over the life of the contract.

Keeping in view the announcement of "Te Institute of Chartered Accountants of India" dated March 29, 2008 regarding accounting for derivatives, mark to market losses on all other derivatives contracts (other than forward contracts dealt as above) outstanding as at the year end, are recognized in the Financial Statements.

i. revenue recognition

i) All Expenses and Revenues are accounted for on mercantile basis except otherwise stated.

ii) Revenues from Export Incentives, Insurance and other claims etc. is recognized on the basis of certainties as its utilization and related realization.

iii) Sales are inclusive of Packing Charges and Excise Duty but exclusive of Value Added Tax, Rebates, Discounts and Claims etc.

j. CenVat / Value added tax (Vat) Credit

CENVAT / VAT credit whenever availed on fixed assets is set off with the cost of the assets. Other CENVAT / VAT credit wherever availed is adjusted with the cost of purchases of Raw Material or Stores as the case may be.

k. employee Benefits

Employee Benefits are accrued in the year services are rendered by the employees. The Company has Defend Contribution Plan for its employees comprising of Provident Fund and Pension Fund. The Company makes regular contribution to Provident Fund which are fully funded and administered by the Trustees / Government. The Company contributes to the Employees' Pension Scheme, 1995 for certain categories of employees. Contributions are recognized in the Statement of Profit and Loss on accrual basis.

Long-term employee benefits under defend benefit plans and other long term employee benefits are determined at the close of each year at the present value of the amount payable using actuarial valuation techniques.

Actuarial gains and losses are recognized in the year when they arise.

l. research and development

Revenue Expenditure on Research and Development is charged to the Statement of Profit and Loss in the year in which it is incurred.

m. subsidies and grants

Cash Subsidy related to fixed assets to the extent received is adjusted to the cost of respective fixed assets. Subsidy related to the total investment in the project is treated as Capital Reserve. Other Government grants including incentives etc. are credited to Statement of Profit and Loss or deducted from the related expenses.

n. Borrowing Costs

Borrowing costs that are attributable to the acquisition/construction of fixed assets are capitalized as part of the cost of respective assets. Other borrowing costs are recognized as an expense in the year in which they are incurred.

o. income tax

Provision for Tax is made for current tax and deferred tax. Current tax is provided on the taxable income using the applicable tax rates and tax laws. Deferred tax assets and liabilities arising on account of timing difference, which are capable of reversal in subsequent periods are recognized using tax rates and tax laws, which have been enacted or substantively enacted. Deferred tax assets are recognized only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets will be realized. In case of carry forward of unabsorbed depreciation and tax losses, deferred tax assets are recognized only, if there is "virtual certainty" that such deferred tax assets can be realized against future taxable profits.

p. Lease

Where the Company is the lessee, finance leases which effectively transfer to the company substantially all the risks and benefits incidental to ownership of the leased item are capitalized at the lower of the fair value and present value of the minimum lease payments at the inception of the lease term and disclosed as leased assets. Lease payments are apportioned between the finance charges and reduction of the lease liability based on the implicit rate of return. Finance charges are charged directly against revenue. Lease management fees, legal charges and other initial direct costs are capitalized.

Lease rentals in respect of assets taken under finance lease up to March 31, 2081 are amortized over the total term of the lease (including extended secondary lease term).

Leases, where the less or effectively retains substantially all the risks and benefits of ownership of the leased item, are classified as operating leases. Operating lease payments are recognized as an expense in the Statement of Profit and Loss on a straight-line basis over the lease term.

q. Provisions, Contingent Liabilities and Contingent assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Assets are neither recognized nor disclosed in the financial statements. Contingent Liabilities, if material are disclosed by way of notes.

r. Measurement of betide

The company presents earnings before interest, tax, depreciation and amortization (EBITDA) as a separate line item on the face of the statement of profit and loss. The company measures EBITDA on the basis of profit/(loss) from continuing operations. In its measurement, the company does not include depreciation and amortization expense, finance costs and tax expense.


Mar 31, 2014

A. Accounting Convention

The financial statements, except in respect of certain Fixed Assets, which are stated at fair value or revalued amounts, have been prepared on the basis of the historical cost and on the accounting principles of a going concern. The financial statements have been prepared in accordance with the provisions of the Companies Act, 1956 and Accounting Standards as notified vide Companies (Accounting Standards) Rules, 2006.

b. Use of Estimates

The preparation of financial statements require Management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosures relating to contingent liabilities and assets as at the Balance Sheet date and the reported amounts of revenue and expenses during the year. Difference between the actual results and the estimates are recognised in the year in which the results are known /materialised.

c. Fixed Assets

i. Fixed Assets are stated at cost of acquisition or cost of construction or at revalued amounts wherever such assets have been revalued or at fair value as the case may be.

ii. All direct expenditure relating to construction of project are capitalised as "Pre-operative & Trial Run Expenses (pending allocation)". Administrative and general overheads which are specifically attributable to the construction of the project and /or bringing it to the working conditions for intended use (Net of Revenue during the said period) are also capitalised as ''Pre-operative & Trial Run Expenses (Pending allocation)".

d. Depreciation and Amortization Tangible Assets

i. Depreciation except otherwise stated has been provided at the rates specified under Schedule XIV to the Companies Act, 1956 on assets installed/acquired up to March 31, 1990 on written down value method and in respect of additions thereafter on straight line method.

ii. Certain Plant and Equipments have been considered as continuous process plant as defined under Schedule XIV to the Companies Act, 1956 on the basis of technical evaluation.

iii. Depreciation on increase in value of Fixed Assets due to revaluation is provided on the basis of remaining useful life as estimated by the valuer on the straight line method and is transferred from Revaluation Reserve to Statement of Profit and Loss.

iv. Depreciation on incremental cost arising on account of exchange difference is amortised on straight line method over the remaining life of the assets.

v. Second hand machines are depreciated on straight line method based on their useful lives as estimated by independent technical experts.

Intangible Assets

vi. Computer Software are amortised on straight line method @ 33.33% over a period of three years.

e. Impairment

Fixed Assets are reviewed at each balance sheet date for impairment. In case events and circumstances indicate any impairment, recoverable amount of fixed assets is determined. An impairment loss is recognised, whenever the carrying amounts of assets belonging to Cash Generating Unit (CGU) exceed recoverable amount. The recoverable amount is the greater of assets net selling price or its value in use. In assessing the value in use, the estimated future cash flows from the use of assets are discounted to their present value at appropriate rate. An impairment loss is reversed if there has been change in the recoverable amount and such loss either no longer exists or has decreased. Impairment loss/reversal thereof is adjusted to the carrying value of the respective assets, which in case of CGU, are allocated to its assets on a prorata basis.

f. Investments

Non Current Investments are stated at cost, less provision for diminution in value other than temporary, if any. Current Investments are valued at cost or fair value whichever is lower.

g. Inventories

Inventories are valued at the lower of cost or estimated net realisable value. In respect of Raw Materials, Stores and Spare Parts, Fuel and Packing Materials the cost includes the taxes and duties other than those recoverable from taxing authorities and other expenses incurred for procuring the same. In respect of Finished Goods and Work-in-Process the cost includes manufacturing expenses and appropriate portion of overheads. The cost of inventories is determined on the weighted average basis.

h. Foreign Exchange Transactions and Derivatives

Transactions in foreign currencies are accounted for at the exchange rate prevailing on the date of the transaction. Foreign currency monetary assets and liabilities at the year-end are translated using closing exchange rates. The loss or gain thereon and also on the exchange differences on settlement of the foreign currency transactions during the year are recognised as revenue or expenses in the Statement of Profit and Loss except in respect of non current liabilities related to fixed assets/capital work-in-progress in which case, these are adjusted to the cost of respective fixed assets/ capital work-in-progress.

Exchange differences arising with respect to forward contracts other than those entered into, to hedge foreign currency risk on unexecuted firm commitments or of highly probable forecast transactions are recognised in the period in which they arise and the difference between the forward rate and exchange rate at the date of transaction is recognised as revenue/expense over the life of the contract.

Keeping in view the announcement of "The Institute of Chartered Accountants of India" dated March 29, 2008 regarding accounting for derivatives, mark to market losses on all other derivatives contracts (other than forward contracts dealt as above) outstanding as at the year end, are recognised in the Financial Statements.

i. Revenue Recognition

i) All expenses and revenues are accounted for on mercantile basis except otherwise stated.

ii) Revenues from Export Incentives, Insurance and other claims, etc. is recognised on the basis of certainties of its utilisation and related realisation.

iii) Sales are inclusive of Packing Charges and Excise Duty but exclusive of Value Added Tax, Rebates, Discounts and Claims etc.

j. CENVAT / Value Added Tax (VAT) Credit

CENVAT / VAT credit whenever availed on fixed assets is set off with the cost of the assets. Other CENVAT / VAT credit wherever availed is adjusted with the cost of purchases of Raw Material or Stores as the case may be.

k. Employee Benefits

Employee Benefits are accrued in the year services are rendered by the employees. The Company has Defined Contribution Plan for its employees comprising of Provident Fund and Pension Fund. The Company makes regular contribution to Provident Fund which are fully funded and administered by the Trustees / Government. The Company contributes to the Employees'' Pension Scheme, 1995 for certain categories of employees. Contributions are recognised in the Statement of Profit and Loss on accrual basis.

Long-term employee benefits under defined benefit plans and other long term employee benefits are determined at the close of each year at the present value of the amount payable using actuarial valuation techniques.

Actuarial gains and losses are recognised in the year when they arise.

l. Research and Development

Revenue expenditure on Research and Development is charged to the Statement of Profit and Loss in the year in which it is incurred.

m. Subsidies and Grants

Cash Subsidy related to fixed assets to the extent received is adjusted to the cost of respective fixed assets. Subsidy related to the total investment in the project is treated as Capital Reserve. Other Government grants including incentives etc. are credited to Statement of Profit and Loss or deducted from the related expenses.

n. Borrowing Costs

Borrowing costs that are attributable to the acquisition/construction of fixed assets are capitalised as part of the cost of respective assets. Other borrowing costs are recognised as an expense in the year in which they are incurred.

o. Income Tax

Provision for Tax is made for current tax and deferred tax. Current tax is provided on the taxable income using the applicable tax rates and tax laws. Deferred tax assets and liabilities arising on account of timing difference, which are capable of reversal in subsequent periods are recognised using tax rates and tax laws, which have been enacted or substantively enacted. Deferred tax assets are recognised only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets will be realised. In case of carry forward of unabsorbed depreciation and tax losses, deferred tax assets are recognised only if there is "virtual certainty" that such deferred tax assets can be realised against future taxable profits.

p. Lease

Where the Company is the lessee, Finance Leases which effectively transfer to the Company substantially all the risks and benefits incidental to ownership of the leased item are capitalised at the lower of the fair value and present value of the minimum lease payments at the inception of the lease term and disclosed as leased assets. Lease payments are apportioned between the finance charges and reduction of the lease liability based on the implicit rate of return. Finance charges are charged directly against revenue. Lease management fees, legal charges and other initial direct costs are capitalised.

Lease rentals in respect of assets taken under finance lease up to March 31, 2081 are amortised over the total term of the lease (including extended secondary lease term).

Leases, where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item, are classified as Operating Leases. Operating lease payments are recognised as an expense in the Statement of Profit and Loss on a straight-line basis over the lease term.

q. Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Assets are neither recognised nor disclosed in the financial statements. Contingent Liabilities, if material are disclosed by way of notes.

r. Measurement of EBITDA

As permitted by the Guidance Note on the Revised Schedule VI to the Companies Act, 1956, the Company has elected to present Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) as a separate line item on the face of the Statement of Profit and Loss. The Company measures EBITDA on the basis of profit/(loss) from continuing operations. In its measurement, the Company does not include depreciation and amortization expense, finance costs and tax expense.

2.1(b).1 In terms of Scheme of Arrangement pursuant to the Order of Hon''ble High Court, Calcutta dated April 7, 2008 and by the Hon''ble High Court, Delhi dated March 19, 2008 (the Scheme) sanctioning the amalgamation of Ace Glass Containers Limited (AGCL) with the Company, 13,68,872 and 21,41,448 equity shares ofRs. 10/- each of the Company issued in lieu of the shares of the Company held by AGCL and shares of AGCL held by the Company were transferred to ACE Trust and HNG Trust respectively in earlier years for the sole benefit of the Company. Out of the shares so transferred 68,44,360 and 77,97,240 equity shares ofRs. 2/- each of the Company (after subdivision of 1 equity share of Rs. 10/- each into 5 equity shares of Rs. 2/- each w.e.f. 13/11/2009) are held by ACE Trust and HNG Trust respectively as on March 31, 2014. In view of the shares being held for the sole benefit of the Company as mentioned above, the book value of Rs. 6,014.85 Lakhs of these investments have been shown as deduction from Shareholders Fund and thereby General Reserve is adjusted to that extent. Receipt from the Trusts on account of beneficial interest is credited to Capital Reserve.

2.1(b).2 In respect of 1,46,41,600 Equity Shares held by HNG Trust and ACE Trust, the Trustees had informed the Company of their decision to forego their rights to dividend on shares held by them for the year 2012-13 and accordingly proposed dividend and dividend distribution tax amounting to Rs. 14.64 Lakhs (Rs. 219.62 Lakhs) and Rs. 2.51 Lakhs (Rs. 35.63 Lakhs) respectively has been written back during the year.


Mar 31, 2012

A. Accounting Convention

The Financial Statements, except in respect of certain Fixed Assets, which are stated at fair value or revalued amounts, have been prepared on the basis of the historical cost and on the accounting principles of a going concern. The Financial Statements have been prepared in accordance with the provisions of the Companies Act, 1956 and Accounting Standards as notified vide Companies (Accounting Standards) Rules, 2006.

b. Use of Estimates

The preparation of Financial Statements require Management to make estimates and assumption that affect the reported amount of assets and liabilities and disclosures relating to contingent liabilities and assets as at the balance sheet date and the reported amounts of revenue and expenses during the year. Difference between the actual results and the estimates are recognised in the year in which the results are known/materialised.

c. Fixed Assets

Fixed Assets are stated at cost of acquisition or cost of construction or at revalued amounts wherever such assets have been revalued or at fair value as the case may be.

d. Depreciation and Amortization Tangible Assets

i. Depreciation except otherwise stated has been provided at the rates specified under Schedule XIV to the Companies Act, 1956 on assets installed/acquired up to March 31, 1990 on Written Down Value Method and in respect of additions thereafter on Straight Line Method.

ii. Certain Plant and Equipments have been considered as continuous process plant as defined under Schedule XIV to the Companies Act, 1956 on the basis of technical evaluation.

iii. Depreciation on increase in value of Fixed Assets due to revaluation is provided on the basis of remaining useful life as estimated by the valuer on the Straight Line Method and is transferred from Revaluation Reserve to Statement of Profit and Loss.

iv. Depreciation on incremental cost arising on account of exchange difference is amortised on Straight Line Method over the remaining life of the assets.

v. Second hand machines are depreciated on Straight Line Method based on their useful lives as estimated by independent technical experts.

Intangible Assets

vi. Computer Soft wares are amortised on Straight Line Method @ 33.33% over a period of three years.

Fixed Assets at Nashik Plant are estimated to have lower residual lives than that envisaged as per the rates provided in Schedule XIV of the Companies Act, 1956. Depreciation has been provided based on the estimated shorter residual lives as follows:

e. Impairment

Fixed Assets are reviewed at each balance sheet date for impairment. In case events and circumstances indicate any impairment, recoverable amount of fixed assets is determined. An impairment loss is recognised, whenever | the carrying amounts of assets belonging to Cash Generating Unit (CGU) exceeds recoverable amount. The recoverable amount is the greater of assets net selling price or its value in use. In assessing the value in use, the estimated future cash flows from the use of assets are discounted to their present value at appropriate rate. An impairment loss is reversed if there has been change in the recoverable amount and such loss either no longer exists or has decreased. Impairment loss/reversal thereof is adjusted to the carrying value of the respective assets, which in case of CGU, are allocated to its assets on a prorata basis.

f. Investments

Non current Investments are stated at cost, less Provision for Diminution in value other than temporary, if any. Current Investments are valued at cost or fair value whichever is lower.

g. Inventories

Inventories are valued at the lower of cost or estimated net realisable value. In respect of Raw Materials, Stores & Spare Parts, Fuel, Building and Packing Materials the cost includes the taxes and duties other than those recoverable from taxing authorities and other expenses incurred for procuring the same. In respect of Finished Goods and Work-in-Process the cost includes manufacturing expenses and appropriate portion of overheads. The cost of inventories is determined on the Weighted Average Basis.

h. Foreign Exchange Transactions and Derivatives

Transactions in foreign currencies are accounted for at the exchange rate prevailing on the date of the transaction. Foreign Currency Monetary Assets and Liabilities at the year-end are translated using closing exchange rates. The loss or gain thereon and also on the exchange differences on settlement of the foreign currency transaction during the year are recognised as revenue or expenses in the Statement of Profit and Loss.

Exchange differences arising with respect to forward contracts other than those entered into, to hedge foreign currency risk on unexecuted firm commitments or of highly probable forecast transactions are recognised in the period in which they arise and the difference between the forward rate and exchange rate at the date of transaction is recognised as revenue/expense over the life of the contract.

Keeping in view the announcement of "The Institute of Chartered Accountants of India" dated March 29, 2008 regarding accounting for derivatives, mark to market losses on all other derivatives contracts (other than forward contracts dealt as above) outstanding as at the year end, are recognised in the Financial Statements.

i. Revenue Recognition

i) All Expenses and Revenues are accounted for on mercantile basis except otherwise stated.

ii) Revenues from Export Incentives, Insurance and other claims etc. is recognised on the basis of certainties as to its utilisation and related realisation.

iii) Sales are inclusive of Packing Charges and Excise Duty but exclusive of Value Added Tax, Rebates, Discounts and Claims etc.

j. CENVAT / Value Added Tax (VAT) Credit

Cenvat / VAT credit whenever availed on Fixed Assets is set off with the cost of the assets. Other Cenvat / VAT credit wherever availed is adjusted with the cost of purchases of Raw Material or Stores as the case may be. k. Employee Benefits

k.Employee Benefits are accrued in the year services are rendered by the employees. The Company has Defined Contribution Plan for its employees comprising of Provident Fund and Pension Fund. The Company makes regular contribution to Provident Fund which are fully funded and administered by the Trustees/Government. The Company contributes to the Employees' Pension Scheme, 1995 for certain categories of employees. Contributions are recognised in the Statement of Profit and Loss on accrual basis.

Long-term employee benefits under Defined Benefit Plans and other long term employee benefits are determined at the close of each year at the present value of the amount payable using actuarial valuation techniques. Actuarial gains and losses are recognised in the year when they arise.

l. Research and Development

Revenue Expenditure on Research and Development is charged to the Statement of Profit and Loss in the year in which it is incurred.

m. Subsidies and Grants Cash Subsidy related to Fixed Assets to the extent received is adjusted to the cost of respective Fixed Assets. Subsidy related to the total investment in the project is treated as Capital Reserve. Other Government grants including incentives etc. are credited to Statement of Profit and Loss or deducted from the related expenses.

n. Borrowing Cost

Borrowing costs that are attributable to the acquisition/construction of Fixed Assets are capitalised as part of the cost of respective assets. Other borrowing costs are recognised as an expense in the year in which they are incurred. o. Income Tax

o.Provision for Tax is made for current tax and deferred tax. Current tax is provided on the taxable income using the applicable tax rates and tax laws. Deferred Tax Assets and Liabilities arising on account of timing difference, which are capable of reversal in subsequent periods are recognised using tax rates and tax laws, which have been enacted or substantively enacted. Deferred Tax Assets are recognised only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such Deferred Tax Assets will be realised. In case of carry forward of unabsorbed depreciation and tax losses, Deferred Tax Assets are recognised only if there is "Virtual Certainty" that such Deferred Tax Assets can be realised against future taxable profits.

p. Lease Where the Company is the lessee, finance leases which effectively transfer to the Company substantially all the risks and benefits incidental to ownership of the leased item are capitalised at the lower of the fair value and present value of the minimum lease payments at the inception of the lease term and disclosed as leased assets. Lease payments are apportioned between the finance charges and reduction of the lease liability based on the implicit rate of return. Finance charges are charged directly against revenue. Lease management fees, legal charges and other initial direct costs are capitalised.

Lease rentals in respect of assets taken under finance lease up to March 31, 2081 are amortised over the total term of the lease (including extended secondary lease term).

Leases, where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item, are classified as Operating Leases. Operating lease payments are recognised as an expense in the Statement of Profit and Loss on a Straight-line Basis over the lease term.

q. Provision, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Assets are neither recognised nor disclosed in the Financial Statements. Contingent Liabilities, if material are disclosed by way of notes.

r. Measurement of EBITDA

As permitted by the Guidance Note on the Revised Schedule VI to the Companies Act, 1956, the Company has elected to present Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) as a separate line item on the face of the Statement of Profit and Loss. The Company measures EBITDA on the basis of profit/(loss) from continuing operations. In its measurement, the Company does not include Depreciation and Amortization Expense, Finance Costs and Tax Expense.

The Company has only one class of Equity Shares having a par value of Rs. 2 each. Each holder of equity shares is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approval of the Shareholders. In the event of liquidation, the Equity Shareholders are eligible to receive the remaining assets of the Company, after distribution of all preferential amounts, in proportion of their shareholding.


Mar 31, 2011

A. Accounting Convention

The accounts, except in respect of certain Fixed Assets, which are stated at fair value or revalued amounts, have been prepared on the basis of the historical cost and on the accounting principles of a going concern. The accounts have been prepared in accordance with the provisions of the Companies Act, 1956 and Accounting Standards as notified vide Companies (Accounting Standards) Rules, 2006.

b. Use of Estimates

The preparation of financial statements require management to make estimates and assumption that affect the reported amount of assets and liabilities and disclosures relating to contingent liabilities and assets as at the Balance Sheet date and the reported amounts of income and expenses during the year. Difference between the actual results and the estimates are recognised in the year in which the results are known /materialised.

c. Fixed Assets

Fixed Assets are stated at cost of acquisition or cost of construction or at revalued amounts wherever such assets have been revalued or at fair value as the case may be.

d. Depreciation and Amortization

Tangible Assets

i. Depreciation except otherwise stated has been provided at the rates specified under Schedule XIV to the Companies Act, 1956 on assets installed/acquired up to 31 March, 1990 on written down value method and in respect of additions thereafter on straight line method.

ii. Certain Plant and Machinery have been considered as continuous process plant as defined under Schedule XIV to the Companies Act, 1956 on the basis of technical evaluation.

iii. Depreciation on increase in value of Fixed Assets due to revaluation is provided on the basis of remaining useful life as estimated by the valuer on the straight line method and is transferred from Revaluation Reserve to Profit and Loss Account.

iv. Depreciation on incremental cost arising on account of exchange difference is amortised on straight line method over the remaining life of the assets.

v. Second hand machines are depreciated on straight line method based on their useful lives as estimated by independent technical experts.

Intangible Assets

vi. Computer Softwares are amortised on straight line method @ 33.33% over a period of three years.

e. Impairment

Fixed Assets are reviewed at each balance sheet date for impairment. In case events and circumstances indicate any impairment, recoverable amount of fixed assets is determined. An impairment loss is recognised, whenever the carrying amounts of assets belonging to Cash Generating Unit (CGU) exceeds recoverable amount. The recoverable amount is the greater of assets net selling price or its value in use. In assessing the value in use, the estimated future cash flows from the use of assets are discounted to their present value at appropriate rate. An impairment loss is reversed if there has been change in the recoverable amount and such loss either no longer exists or has decreased. Impairment loss/reversal thereof is adjusted to the carrying value of the respective assets, which in case of CGU, are allocated to its assets on a prorata basis.

f. Investments

Long Term Investments are stated at cost, less provision for diminution in value other than temporary, if any. Current Investments are valued at cost or fair value whichever is lower.

g. Inventories

Inventories are valued at the lower of cost or estimated net realisable value. In respect of Raw Materials, Stores, Spare Parts, Fuel, Building and Packing Materials the cost includes the taxes and duties other than those recoverable from taxing authorities and other expenses incurred for procuring the same. In respect of Finished Goods and Work-in-Process the cost includes manufacturing expenses and appropriate portion of overheads. The cost of inventories is determined on the weighted average basis.

Own manufactured moulds used for the manufacture of glass items are recorded at weighted average cost, which includes prime cost, factory and general overheads and the same are classified as stores and spare parts under inventories.

h. Foreign Exchange Transactions and Derivatives

Transactions in foreign currencies are accounted for at the exchange rate prevailing on the date of the transaction. Foreign currency monetary assets and liabilities at the year-end are translated using closing exchange rates. The loss or gain thereon and also on the exchange differences on settlement of the foreign currency transaction during the year are recognised as income or expenses in the profit and loss account.

Exchange differences arising with respect to forward contracts other than those entered into, to hedge foreign currency risk on unexecuted firm commitments or of highly probable forecast transactions are recognised in the period in which they arise and the difference between the forwards rate and exchange rate at the date of transaction is recognised as income/expense over the life of the contract.

Keeping in view the announcement of "The Institute of Chartered Accountants of India" dated 29 March 2008 regarding accounting for derivatives, mark to market losses on all other derivatives contracts (other than forward contracts dealt as above) outstanding as at the year end, are recognised in the accounts.

i. Revenue Recognition

i) All Expenses and Income are accounted for on mercantile basis except otherwise stated.

ii) Income from Export Incentives, Insurance and other claims etc. is recognised on the basis of certainties as to its utilisation and related realisation.

iii) Sales are inclusive of Packing Charges and Excise Duty but exclusive of Value Added Tax, Rebates, Discounts and Claims etc.

j. CENVAT / Value Added Tax (VAT) Credit

Cenvat / VAT credit whenever availed on Fixed Assets is set off with the cost of the assets. Other Cenvat / VAT credit wherever availed is adjusted with the cost of purchases of Raw Material or Stores as the case may be.

k. Employee Benefits

Employee Benefits are accrued in the year services are rendered by the employees. The Company has Defined Contribution Plan for its employees comprising of Provident Fund and Pension Fund. The Company makes regular contribution to Provident Fund which are fully funded and administered by the Trustees / Government. The Company contributes to the Employees Pension Scheme, 1995 for certain categories of employees. Contributions are recognised in the Profit and Loss account on accrual basis.

Long-term employee benefits under defined benefit plans and other long term employee benefits are determined at the close of each year at the present value of the amount payable using actuarial valuation techniques.

Actuarial gains and losses are recognised in the year when they arise.

l. Research and Development

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

m. Subsidies and Grants

Cash Subsidy related to Fixed Assets to the extent received is adjusted to the cost of respective fixed assets. Subsidy related to the total investment in the project is treated as Capital Reserve. Other Government grants including incentives etc. are credited to Profit and Loss Account or deducted from the related expenses.

n. Borrowing Cost

Borrowing costs that are attributable to the acquisition/construction of Fixed Assets are capitalised as part of the cost of respective assets. Other borrowing costs are recognised as an expense in the year in which they are incurred.

o. Income Tax

Provision for Tax is made for current tax and deferred tax. Current tax is provided on the taxable income using the applicable tax rates and tax laws. Deferred tax assets and liabilities arising on account of timing difference, which are capable of reversal in subsequent periods are recognised using tax rates and tax laws, which have been enacted or substantively enacted. Deferred tax assets are recognised only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets will be realised. In case of carry forward of unabsorbed depreciation and tax losses, deferred tax assets are recognised only if there is "virtual certainty" that such deferred tax assets can be realised against future taxable profits.

p. Lease

Where the Company is the lessee, finance leases which effectively transfer to the Company substantially all the risks and benefits incidental to ownership of the leased item are capitalised at the lower of the fair value and present value of the minimum lease payments at the inception of the lease term and disclosed as leased assets. Lease payments are apportioned between the finance charges and reduction of the lease liability based on the implicit rate of return. Finance charges are charged directly against income. Lease management fees, legal charges and other initial direct costs are capitalised.

Leases rentals in respect of assets taken under finance lease up to 31 March 2081 are amortised over the total term of the lease (including extended secondary lease term).

Leases, where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item, are classified as operating leases. Operating lease payments are recognised as an expense in the Profit and Loss Account on a straight-line basis over the lease term.

q. Provision, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Assets are neither recognised nor disclosed in the financial statements. Contingent Liabilities, if material are disclosed by way of notes.

 
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