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Accounting Policies of Jagatjit Industries Ltd. Company

Mar 31, 2015

1.1. BASIS FOR PREPARATION OF ACCOUNTS

These financial statements have been prepared in accordance with the Generally Accepted Accounting Principles in India (GAAP) under the historical cost convention on accrual basis, except for certain tangible assets which are being carried at revalued amounts. These financial statements have been prepared to comply in all material aspects with the accounting standards as prescribed by Companies (Accounting Standards) Rule, 2006, as amended and the other relevant provisions of the Companies Act, 2013.

1.2. USE OF ESTIMATES

The preparation of financial statements require estimates and assumptions to be made that affect the reported amount of assets and liabilities on 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 recognized in the period in which the results are known/materialized.

1.3. FIXED ASSETS

a) Tangible:

Fixed Assets are stated at cost of acquisition / revalued amounts less accumulated depreciation. Cost of acquisition includes taxes, duties, freight and other costs that are directly attributable to bringing assets to their working condition for their intended use. Borrowing costs directly attributable to acquisition or construction of those fixed assets which necessarily take a substantial period of time to get ready for their intended use are capitalized.

Subsequent expenditures related to an item of fixed asset are added to its book value only if they increase the future benefits from the existing asset beyond its previously assessed standard. The cost of fixed assets not ready for their intended use is recorded as capital work-in-progress before such date.

Spares that can be used only with particular items of plant and machinery and such usage is expected to be irregular are capitalized.

b) Intangible:

Intangible Assets are stated at acquisition cost, net of accumulated amortization and accumulated impairment loss, if any.

1.4. DEPRECIATION / AMORTISATION

a) Tangible:

Principal Straight Line Method (SLM) rates, in the manner prescribed by Schedule II of the Companies Act, 2013, have been adopted for the purpose of calculation of depreciation except for the amount added on revaluation of certain assets which are depreciated on the estimate provided by the valued of the remaining useful life of such assets. Leasehold land is amortized over the period of lease. Depreciation on the assets which have been impaired is provided on the basis stated in note 1.5 below. In respect of following assets, where useful life is different than those prescribed in schedule II are used:- Particulars Depreciation

Boiler No-5 Over its useful life as technically assessed (35 Years)

Turbine 7 MW Over its useful life as technically assessed (35 Years)

Evaporator Spent Wash Over its useful life as technically assessed (35 Years)

b) Intangible:

Intangible assets are amortized on a straight line basis over their estimated useful lives and have been amortized @ 10% per annum.

1.5. IMPAIRMENT OF ASSETS

All assets other than inventories, investments and deferred tax assets, are reviewed for impairment, in accordance with Accounting Standard (AS 28), "Impairment of assets", issued by the Institute of Chartered Accountants of India, wherever events or changes in circumstances indicate that the carrying amount may not be recoverable. Assets whose carrying value exceeds their recoverable amount are written down to the recoverable amount. After impairment, depreciation is provided on the revised carrying amount of the assets over its remaining useful life. Previously recognized impairment loss shall be increased or reversed depending on changes in circumstances. However the carrying amount after reversal is not increased beyond the carrying value that would have prevailed by charging usual depreciation if there was no impairment.

1.6. INVESTMENTS

Long Term Investments are stated at cost and provision for diminution is made to recognize a decline, other than temporary, in the value of investments. Current Investments are stated at lower of cost and fair value.

1.7. INVENTORIES

Inventories are valued at the lower of cost (inclusive of excise duty, as applicable) or net realizable value. Cost is determined on a weighted average basis and it includes all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition.

1.8. INCOME

a) Sale is recognized on dispatches made from respective locations of the Company and is inclusive of excise duty on sales wherever payable by the Company. Sales include goods sold by contract manufacturers on behalf of the Company, since risk and reward belongs to the company in accordance with the terms of the relevant contract manufacturing agreements.

b) Revenue from job work is recognized on the completion of a relevant job.

c) Interest on Income Tax refunds, Insurance claims, Export benefits and Other refunds are accounted for as and when amounts receivable can be reasonably determined as being acceptable to authorities. Royalty income is accounted on an accrual basis in accordance with terms specified in the relevant agreements.

1.9. EMPLOYEE BENEFITS

(i) Gratuity and leave encashment which are defined benefits, are accrued based on actuarial valuations at the balance sheet date, carried out by an independent actuary.

(ii) Contributions payable to the Government provident fund and approved superannuation fund which are defined contribution schemes, are charged to Profit and Loss account.

(iii) Long Term Compensated absences are provided for based on actuarial valuation carried by an actuary as at the end of the year.

(iv) Actuarial gains/losses are immediately taken to profit and loss account and are not deferred.

1.10. FOREIGN CURRENCY TRANSACTIONS

Foreign currency transactions are accounted for at the exchange rate prevailing on the date of the transaction. All monetary foreign currency assets and liabilities are converted at the exchange rate prevailing at the date of the balance sheet. All exchange differences other than in relation to acquisition of fixed assets and other long term foreign currency monetary liabilities are dealt with in the statement of Profit and Loss.

1.11. BORROWING COSTS

Borrowing costs attributable to the acquisition and/ or construction of qualifying assets are capitalized as a part of the cost of such assets, upto the date when such assets are ready for their intended use. Other Borrowing costs are charged to Statement of Profit and Loss.

1.12. LEASE ACCOUNTING

Operating Lease payments are recognized as an expense in the Profit and Loss Account on straight-line basis over the lease term [ Note 42 ].

1.13. TAXATION

Tax expense/ earning is the aggregate of current tax and deferred tax charged/ credited to Profit and Loss Account for the year. Current tax is the amount of tax payable in respect of taxable income for the year and measured by using the applicable tax rates and laws. Deferred tax assets and liabilities are 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 subject to the consideration of prudence and to the extent there is reasonable/virtual certainty that sufficient future taxable income will be available against which such deferred tax asset can be realized. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantially enacted by the balance sheet date.

1.14. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

The Company creates a provision when there is present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of obligation. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that probably will not require an outflow of resources or where a reliable estimate of the obligation cannot be made. Contingent assets are neither recognized nor disclosed.


Mar 31, 2014

1.1. BASIS FOR PREPARATION OF ACCOUNTS

These financial statements have been prepared in accordance with the Generally Accepted Accounting Principles in India (GAAP) under the historical cost convention on accrual basis, except for certain tangible assets which are being carried at revalued amounts. These financial statements have been prepared to comply in all material aspects with the accounting standards as prescribed by Companies (Accounting Standards) Rule, 2006, as amended and the other relevant provisions of the Companies Act, 1956 (to the extent applicable) and the Companies Act, 2013 (to the extent notified) read with the General Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013.

1.2. USE OF ESTIMATES

The preparation of financial statements require estimates and assumptions to be made that affect the reported amount of assets and liabilities on 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.

1.3. FIXED ASSETS

a) Tangible:

Fixed Assets are stated at cost of acquisition / revalued amounts less accumulated depreciation. Cost of acquisition includes taxes, duties, freight and other costs that are directly attributable to bringing assets to their working condition for their intended use. Borrowing costs directly attributable to acquisition or construction of those fixed assets which necessarily take a substantial period of time to get ready for their intended use are capitalised. Spares that can be used only with particular items of plant and machinery and such usage is expected to be irregular are capitalised.

b) Intangible:

Intangible Assets are stated at acquisition cost, net of accumulated amortisation and accumulated impairment loss, if any.

1.4. DEPRECIATION / AMORTISATION

a) Tangible:

Principal Straight Line Method (SLM) rates, in the manner prescribed by Schedule XIV of the Companies Act, 1956, have been adopted for the purpose of calculation of depreciation except for the amount added on revaluation of certain assets which are depreciated on the estimate provided by the valuer of the remaining useful life of such assets. Leasehold land is amortised over the period of lease. Depreciation on the assets which have been impaired is provided on the basis stated in note 1.5 below.

b) Intangible:

Intangible assets are amortised on a straight line basis over their estimated useful lives and have been amortised @ 10% per annum.

1.5. IMPAIRMENT OF ASSETS

All assets other than inventories, investments and deferred tax assets, are reviewed for impairment, in accordance with Accounting Standard (AS 28), "Impairment of assets", issued by the Institute of Chartered Accountants of India, wherever events or changes in circumstances indicate that the carrying amount may not be recoverable. Assets whose carrying value exceeds their recoverable amount are written down to the recoverable amount. After impairment, depreciation is provided on the revised carrying amount of the assets over its remaining useful life. Previously recognised impairment loss shall be increased or reversed depending on changes in circumstances. However the carrying amount after reversal is not increased beyond the carrying value that would have prevailed by charging usual depreciation if there was no impairment.

1.6. INVESTMENTS

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

1.7. INVENTORIES

Inventories are valued at the lower of cost (inclusive of excise duty, as applicable) or net realisable value. Cost is determined on a weighted average basis and it includes all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition.

1.8. INCOME

a) Sale is recognised on dispatches made from respective locations of the Company and is inclusive of excise duty on sales wherever payable by the Company. Sales include goods sold by contract manufacturers on behalf of the Company, since risk and reward belongs to the company in accordance with the terms of the relevant contract manufacturing agreements.

b) Revenue from job work is recognised on the completion of a relevant job.

c) Interest on Income Tax refunds, Insurance claims, Export benefits and Other refunds are accounted for as and when amounts receivable can be reasonably determined as being acceptable to authorities. Royalty income is accounted on an accrual basis in accordance with terms specified in the relevant agreements.

1.9. EMPLOYEE BENEFITS

(i) Gratuity and leave encashment which are defined benefits, are accrued based on actuarial valuations at the balance sheet date, carried out by an independent actuary.

(ii) Contributions payable to the Government provident fund and approved superannuation fund which are defined contribution schemes, are charged to Profit and Loss account.

(iii) Compensated absences are provided for based on actuarial valuation carried by an actuary as at the end of the year.

(iv) Actuarial gains/losses are immediately taken to profit and loss account and are not deferred.

1.10. FOREIGN CURRENCY TRANSACTIONS

Monetary items are reported using the closing rate and resultant exchange difference is taken to Profit & Loss Account. Non monetary items are reported using exchange rate at the date of transaction.

1.11. INTEREST ON BORROWINGS

Interest on Working Capital Management is charged against profit for the year in which it is incurred. Interest on borrowings for capital assets is capitalised till the date the asset is ready to be put to use.

1.12. LEASE ACCOUNTING

Operating Lease payments are recognized as an expense in the Profit and Loss Account on straight-line basis over the lease term [Note 45].

1.13. TAXATION

Tax expense/ earning is the aggregate of current tax and deferred tax charged/ credited to Profit and Loss Account for the year. Current tax is the amount of tax payable in respect of taxable income for the year and measured by using the applicable tax rates and laws. Deferred tax assets and liabilities are 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 subject to the consideration of prudence. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantially enacted by the balance sheet date.

1.14. PROVISIONS AND CONTINGENT LIABILITIES

The Company creates a provision when there is present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of obligation. A disclosure for a contingent liability is made when there is a possible obligation and a present obligation that probably will not require an outflow of resources or where a reliable estimate of the obligation cannot be made.

2.7 Terms/Rights Attached To Equity Shares

a) 18,438,112 shares referred to as equity shares are having face value of Rs. 10/- per share. Each holder of equity shares is entitled to one vote per share and dividend, if declared.

b) 25,210,000 underlying Equity Shares of Rs.10/- each fully paid up ranking pari-passu with existing shares were issued in the name of the Depository, The Bank of New York, representing the Global Depository Receipt (GDR) issue. GDRs do not carry any voting rights until they are converted into underlying equity shares.

c) 2,500,000 Equity Shares of Rs 10/- each are held by LPJ Holdings Pvt. Ltd., fully paid up at a premium of Rs 20/- per share, as a special series with differential rights to dividend and voting, were issued during the financial year 2004-05. These shares have no right to the dividend and each share carries twenty voting rights per share as compared to one voting right per existing equity share and were under the lock-in-period of three years from the date of allotment.

d) The holders of all the above equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts in event of liquidation of the Company.

Nature of Security

i. Term Loan amounting to Rs.39 lacs (Previous year Rs. 193 lacs) for Malt Extract Extension is secured by all the machineries and accessories including Civil work related to Filter and instrumentation installed at its works at Jagatjit Nagar, Distt Kapurthala.

ii. Term Loan amounting to Rs.841 lacs ( Previous year Rs. 1,214 lacs) for installation of Water Pollution Control Equipments is secured by all the machineries and accessories including Civil work related to aforementioned equipments installed at its works at Jagatjit Nagar, Distt Kapurthala.

iii. Term Loan amounting to Rs. Nil ( Previous year Rs. 220 lacs) for Malt Spirit Plant and Malted Milk Food Plant is secured by all the machineries and accessories including Civil work related to Plants installed at its works at Jagatjit Nagar, Distt Kapurthala.

iv Term Loan amounting to Rs. 306 lacs (Previous year Rs.444 lacs ) for machinery (IS machine) is secured by all the machineries and accessories including civil work related to the aforementioned machinery installed at its works at Site IV, Plot No.17 Sahibabad Industrial Area Sahibabad (U.P).

Terms of Repayment

Repayable in 20 equal quarterly installments commencing from June, 2009. Last installment due in March, 2014. Rate of Interest 13.20%p.a.(Previous year 13.25% p.a.) as at year end. Last installment of March, 2014 was paid on 1st April 2014.

Repayable in 28 equal quarterly installments commencing from September, 2009. Last installment due in June, 2016. Rate of Interest 14.25% p.a.(Previous year 14.25% p.a.) as at year end.

Repayable in 20 equal quarterly installments commencing from April, 2009. Last installment was due and paid on January 2014. Rate of interest Nil ( Previous year 15.50% p.a.) as at year end.

Repayable in 20 equal quarterly installments commencing from September, 2011. Last installment due on July, 2016 Rate of interest 14.75% p.a (Previous year 14.25% p.a.) as at year end.

v Term Loan amounting to Rs.Nil (Previous year Rs. 161 lacs) for plant & machinery is secured by all the machineries and accessories including civil work related to aforementioned machinery installed at its works at Jagatjit Nagar, Distt Kapurthala.

vi. Term Loan amounting to Rs.1,519 lacs (Previous year Rs. 2,008 lacs) for Boiler is secured by all the machineries and accessories including civil work related to the aforementioned machineries installed at its works at Jagatjit Nagar, Distt Kapurthala.

vii Term Loan amounting to Rs.1,200 lacs (Previous year Rs. 2,640 lacs) is secured by land with building thereon where the Hamira (Punjab) plant of company is situated. Loan was taken for General Corporate purpose including strengthening of Net Working Capital and to meet normal capex of the company.

viii Term Loan amounting to Rs.464 lacs (Previous year Rs. 580 lacs) for turbine is secured by all the machineries and accessories including civil work related to turbine installed at its works at Jagatjit Nagar, Distt Kapurthala.

ix Term Loan amounting to Rs.4,432 lacs (Previous year Nil) is secured against lease rent receivables of leased space at Plot No. 78, Institutional area, Sector-18, Gurgaon, Haryana and 9th & 10th Floor, Ashoka Estate, 24 Barakhamba Road, New Delhi for the purpose of Working Capital needs of the company.

x Car Loans are secured by hypothecation of the related cars.

4.2 Terms of repayment for Long Term Unsecured Borrowings i. Unsecured Inter Corporate deposit Rs. 59 lacs (Previous year Rs. 59 lacs) from related party ( Fast Buck Investment and Trading Pvt. Ltd).

Note : Installments falling due in respect of all the above loans of long-term debt" (Refer Note 10).

Repayable in 20 equal quarterly installments commencing from April, 2012. Last installment was initially due on January 2017. However, Loan has been squared off prematurely on January 2014, because company had not availed the whole sanctioned amount of loan. Rate of interest Nil (Previous year 15.50%p.a.) as at year end.

Repayable in 20 equal quarterly installments commencing from April, 2013. Last installment due on January, 2018. Rate of interest 13.20% p.a (Previous year 13.25% p.a.) as at year end.

Repayable in 25 equal Monthly installments commencing from January 2013. Last installment due on January 2015 Rate of interest 13.95% p.a.: (Previous year 13.25% p.a) as at year end.

Repayable in 60 equal monthly installments commencing from April, 2013. Last installment due on March, 2018. Rate of interest 14.25% p.a (Previous year 14.25 p.a) as at year end.

Repayable in 88 structured monthly installments commencing from June, 2013. Last installment due on Sept, 2020. Rate of interest 12.25% p.a. (Previous year Nil ) as at year end.

Repayable in 36-60 equal monthly installments. Rate of interest 8.25% to 11.25% p.a.

Rate of Interest 8% on Rs. 24 lacs and 12% on Rs 35 lacs; Previous year 8% on Rs 24 lacs and 12% on Rs. 35 lacs.

up to 31.3.2015 have been grouped under "Current maturity


Mar 31, 2012

1.1. BASIS FOR PREPARATION OF ACCOUNTS

The financial statements are prepared under the historical cost convention, except for certain fixed assets which are revalued, on accrual basis of accounting in accordance with the generally accepted accounting principles in India and the provisions of the Companies Act,1956.

1.2. USE OF ESTIMATES

The preparation of financial statements require estimates and assumptions to be made that affect the reported amount of assets and liabilities on 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.

1.3. FIXED ASSETS

Fixed Assets are stated at cost of acquisition / revalued amounts less accumulated depreciation. Cost of acquisition includes taxes, duties, freight and other costs that are directly attributable to bringing assets to their working condition for their intended use. Borrowing costs directly attributable to acquisition or construction of those fixed assets which necessarily take a substantial period of time to get ready for their intended use are capitalised.

Spares that can be used only with particular items of plant and machinery and such usage is expected to be irregular are capitalised.

1.4. DEPRECIATION

Principal Straight Line Method (SLM) rates, in the manner prescribed by Schedule XIV of the Companies Act, 1956, have been adopted for the purpose of calculation of depreciation except for the amount added on revaluation of certain assets which are depreciated on the estimate provided by the valuer of the remaining useful life of such assets. Leasehold land is amortised over the period of lease. Depreciation on the assets which have been impaired is provided on the basis stated in note 1.5 below.

1.5. IMPAIRMENT OF ASSETS

All assets other than inventories, investments and deferred tax assets, are reviewed for impairment, in accordance with Accounting Standard (AS 28), "Impairment of assets", issued by the Institute of Chartered Accountants of India, wherever events or changes in circumstances indicate that the carrying amount may not be recoverable. Assets whose carrying value exceeds their recoverable amount are written down to the recoverable amount. After impairment, depreciation is provided on the revised carrying amount of the assets over its remaining useful life. Previously recognised impairment loss shall be increased or reversed depending on changes in circumstances. However the carrying amount after reversal is not increased beyond the carrying value that would have prevailed by charging usual depreciation if there was no impairment [Note 35.1 and 35.2].

1.6. INVESTMENTS

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

1.7. INVENTORIES

Inventories are valued at the lower of cost (inclusive of excise duty, as applicable) or net realisable value. Cost is determined on a weighted average basis and it includes all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition.

1.8. INCOME

a) Sale is recognised on dispatches made from respective locations of the Company and is inclusive of excise duty on sales wherever payable by the Company. Sales include goods sold by contract manufacturers on behalf of the Company, since risk and reward belongs to the company in accordance with the terms of the relevant contract manufactring agreements.

b) Revenue from job work is recognised on the completion of a relevant job.

c) Interest on Income Tax refunds, Insurance claims, Export benefits and Other refunds are accounted for as and when amounts receivable can be reasonably determined as being acceptable to authorities. Royalty income is accounted on an accrual basis in accordance with terms specified in the relevant agreements.

1.9. EMPLOYEE BENEFITS

(i) Gratuity and leave encashment which are defined benefits, are accrued based on actuarial valuations at the balance sheet date, carried out by an independent actuary.

(ii) Contributions payable to the Government provident fund and approved superannuation fund which are defined contribution schemes, are charged to Profit and Loss account.

(iii) Compensated absences are provided for based on actuarial valuation carried by an actuary as at the end of the year. (iv) Actuarial gains/losses are immediately taken to profit and loss account and are not deferred.

1.10. FOREIGN CURRENCY TRANSACTIONS

Monetary items are reported using the closing rate and resultant exchange difference is taken to Profit & Loss Account. Non monetary items are reported using exchange rate at the date of transaction.

1.11. INTEREST ON BORROWINGS

Interest on Working Capital Management is charged against profit for the year in which it is incurred. Interest on borrowings for capital assets is capitalised till the date the asset is ready to be put to use.

1.12. LEASE ACCOUNTING

Operating Lease payments are recognized as an expense in the Profit and Loss Account on straight-line basis over the lease term [Note 47].

1.13. Taxation

Tax expense/ earning is the aggregate of current tax and deferred tax charged/ credited to Profit and Loss Account for the year. Current tax is the amount of tax payable in respect of taxable income for the year and measured by using the applicable tax rates and laws. Deferred tax assets and liabilities are 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 subject to the consideration of prudence. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantially enacted by the balance sheet date.

1.14. PROVISIONS AND CONTINGENT LIABILITIES

The Company creates a provision when there is present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of obligation. A disclosure for a contingent liability is made when there is a possible obligation and a present obligation that probably will not require an outflow of resources or where a reliable estimate of the obligation cannot be made.


Mar 31, 2011

1. BASIS FOR PREPARATION OF ACCOUNTS

The financial statements are prepared under the historical cost convention, except for certain fixed assets which are revalued, on accrual basis of accounting in accordance with the generally accepted accounting principles in India and the provisions of the Companies Act,1956.

2. USE OF ESTIMATES

The preparation of financial statements require estimates and assumptions to be made that affect the reported amount of assets and liabilities on 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. FIXED ASSETS

Fixed Assets are stated at cost of acquisition / revalued amounts less accumulated depreciation. Cost of acquisition includes taxes, duties, freight and other costs that are directly attributable to bringing assets to their working condition for their intended use. Borrowing costs directly attributable to acquisition or construction of those fixed assets which necessarily take a substantial period of time to get ready for their intended use are capitalised. Spares that can be used only with particular items of plant and machinery and such usage is expected to be irregular are capitalised.

4. DEPRECIATION

Principal Straight Line Method (SLM) rates, in the manner prescribed by Schedule XIV of the Companies Act, 1956, have been adopted for the purpose of calculation of depreciation except for the amount added on revaluation of certain assets which are depreciated on the estimate provided by the valuer of the remaining useful life of such assets. Leasehold land is amortised over the period of lease. Depreciation on the assets which have been impaired is provided on the basis stated in note 5 below.

5. IMPAIRMENT OF ASSETS

All assets other than inventories, investments and deferred tax assets, are reviewed for impairment, in accordance with Accounting Standard (AS 28), "Impairment of assets", issued by the Institute of Chartered Accountants of India, wherever events or changes in circumstances indicate that the carrying amount may not be recoverable. Assets whose carrying value exceeds their recoverable amount are written down to the recoverable amount. After impairment, depreciation is provided on the revised carrying amount of the assets over its remaining useful life. Previously recognised impairment loss shall be increased or reversed depending on changes in circumstances. However the carrying amount after reversal is not increased beyond the carrying value that would have prevailed by charging usual depreciation if there was no impairment [ 21 II (B) 5 below ].

6. INVESTMENTS

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

7. INVENTORIES

Inventories are valued at the lower of cost (inclusive of excise duty, as applicable) or net realisable value. Cost is determined on a weighted average basis and it includes all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition.

8. INCOME

a) Sale is recognised on dispatches made from respective locations of the Company and is inclusive of excise duty wherever payable by the Company. Sales include goods sold by contract manufacturers on behalf of the Company, since risk and reward belongs to the company in accordance with the terms of the relevant contract manufactring agreement.

b) Revenue from job work is recognised on the completion of a relevant job.

c) Interest on Income Tax refunds, Insurance claims, Export benefits and Other refunds are accounted for as and when amounts receivable can be reasonably determined as being acceptable to authorities. Royalty income is accounted on an accrual basis in accordance with terms specified in the relevant agreements.

9. EMPLOYEE BENEFITS

(i) Gratuity and leave encashment which are defined benefits, are accrued based on actuarial valuations at the balance sheet date, carried out by an independent actuary.

(ii) Contributions payable to the Government provident fund and approved superannuation fund which are defined contribution schemes, are charged to Profit and Loss account.

(iii) Compensated absences are provided for based on actuarial valuation carried by an actuary as at the end of the year.

(iv) Actuarial gains/losses are immediately taken to profit and loss account and are not deferred.

10. FOREIGN CURRENCY TRANSACTIONS

Monetary items are reported using the closing rate and resultant exchange difference is taken to Profit & Loss Account. Non monetary items are reported using exchange rate at the date of transaction.

11. INTEREST ON BORROWINGS

Interest on Working Capital Management is charged against profit for the year in which it is incurred. Interest on borrowings for capital assets is capitalised till the date the asset is ready to be put to use.

12. LEASE ACCOUNTING

Operating Lease payments are recognized as an expense in the Profit and Loss Account on straight-line basis over the lease term [Note 21 II (B) 32 below].

13. TAXATION

Tax expense/ earning is the aggregate of current tax and deferred tax charged/ credited to Profit and Loss Account for the year. Current tax is the amount of tax payable in respect of taxable income for the year and measured by using the applicable tax rates and laws. Deferred tax assets and liabilities are 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 subject to the consideration of prudence. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantially enacted by the balance sheet date.

14. PROVISIONS AND CONTINGENT LIABILITIES

The Company creates a provision when there is present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of obligation. A disclosure for a contingent liability is made when there is a possible obligation and a present obligation that probably will not require an outflow of resources or where a reliable estimate of the obligation cannot be made.


Mar 31, 2010

1. BASIS FOR PREPARATION OF ACCOUNTS

These accounts have been prepared in accordance with historical cost convention on an accrual basis (unless otherwise stated) and applicable accounting standards issued by the Institute of Chartered Accountants of India.

2. FIXED ASSETS

Fixed Assets are stated at their historical cost (net of CENVAT) or at enhanced value inclusive of write up arising out of revaluation, wherever applicable.

3. DEPRECIATION

Principal Straight Line Method (SLM) rates, in the manner prescribed by Schedule XIV of the Companies Act, 1956, have been adopted for the purpose of calculation of depreciation except for the amount added on revaluation of certain assets which are depreciated on the estimate provided by the valuer of the remaining useful life of such assets. Leasehold land is amortised over the period of lease. Depreciation on the assets which have been impaired is provided on the basis stated in note 4 below.

4. IMPAIRMENT OF ASSETS

All assets other than inventories, investments and deferred tax assets, are reviewed for impairment, in accordance with Accounting Standard (AS 28), "Impairment of assets", issued by the Institute of Chartered Accountants of India, wherever events or changes in circumstances indicate that the carrying amount may not be recoverable. Assets whose carrying value exceeds their recoverable amount are written down to the recoverable amount. After impairment, depreciation is provided on the revised carrying amount of the assets over its remaining useful life. Previously recognised impairment loss shall be increased or reversed depending on changes in circumstances. However the carrying amount after reversal is not increased beyond the carrying value that would have prevailed by charging usual depreciation if there was no impairment.

5. INVESTMENTS

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

6. INVENTORIES

Inventories are valued at the lower of cost (inclusive ofexcise duty, as applicable) or net realisable value. Cost is determined on a weighted average basis and it includes all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition.

7. INCOME

a) Sale is recognised on dispatches made from respective locations of the Company and is inclusive of excise duty wherever payable by the Company.

b) Revenue from job work is recognised on the completion of a relevant job. The Companys share of income from tie-up operations is recognised on the terms of the relevant agreements.

c) Interest on Income Tax refunds, Insurance claims, Export benefits and Other refunds are accounted for as and when amounts receivable can be reasonably determined as being acceptable to authorities. Royalty income is accounted on an accrual basis in accordance with terms specified in the relevant agreements,

8. EMPLOYEE BENEFITS

(i) Gratuity and leave encashment which are defined benefits, are accrued based on actuarial valuations at the balance sheet date, carried out by an independent actuary. (ii) Contributions payable to the Government provident fund and approved superannuation fund which are defined contribution schemes, are charged to Profit and Loss account. (iii) Compensated absences are provided for based on actuarial valuation carried by an actuary as at the end of the year. (iv) Actuarial gains/losses are immediately taken to profit and loss account and are not deferred.

9. FOREIGN CURRENCY TRANSACTIONS

Monetary items are reported using the closing rate and resultant exchange difference is taken to Profit & Loss Account. Non monetary items are reported using exchange rate at the date of transaction.

10. INTEREST ON BORROWINGS

Interest on Working Capital Management is charged against profit for the year in which it is incurred, interest on borrowings for capital assets is capitalised till the date the asset is ready to be put to use.

11. LEASE ACCOUNTING

Operating Lease payments are recognized as an expense in the Profit and Loss Account on straight-line basis over the lease term (Note 21 U (B) 33 below].

12. TAXATION

Tax expense/ earning is the aggregate of current tax and deferred tax charged/ credited to Profit and Loss Account for the year. Current tax is the amount of tax payable in respect of taxable income for the year and measured by using the applicable tax rates and laws. Deferred tax assets and liabilities are 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 subject to the consideration of prudence. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantially enacted by the balance sheet date.

13. PROVISIONS AND CONTINGENT LIABILITIES

The Company creates a provision when there is present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of obligation. A disclosure for a contingent liability is made when there is a possible obligation and a present obligation that probably will not require an outflow of resources or where a reliable estimate of the obligation cannot be made.

 
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