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Accounting Policies of Jenson & Nicholson (India) Ltd. Company

Mar 31, 2015

(I) Basis of Presenting Financial Statements

The financial statements are prepared on going concern basis under historical cost convention modified by the revaluation of certain fixed assets and are in accordance with the requirements of the Companies Act, 1956, and comply with the Mandatory Accounting Standards referred to in sub-section (3C) of Section 211 of the said Act Accounting Policies, unless specifically stated to be otherwise, are consistent and are in consonance with generally accepted accounting principles.

(II) Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles (GAAP) in India requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and the disclosure of contingent liabilities on the date of financial statements and the reported amount of revenue and expenses during the reporting period actual results could defer from those estimates. Any revision to accounting estimates is recognised prospectively in current and future period.

(III) Classification of Assets and Liabilities

The Revised Schedule VI to the Companies Act, 1956 requires assets and liabilities to be classified as either Current or Non-current.

(a) An asset shall be classified as current when it satisfies any of the following criteria:

(i) It is expected to be realized in, or is intended for sale or consumption in, the Company's normal operating cycle.

(ii) It is held primarily for the purpose of being traded.

(iii) It is expected to be realized within twelve months after the reporting date, or

(iv) It is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting date.

(b) All assets other than current assets shall be classified as non-current.

(c) A liability shall be classified as current when it satisfies any of the following criteria:

(i) It is expected to be settled in the company's normal operating cycle.

(ii) It is held primarily for the purpose of being traded.

(iii) It is due to be settled within twelve months after the reporting date, or

(iv) The company does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

(d) All liabilities other than current liabilities shall be classified as non-current.

(IV) Operating Cycle

An operating cycle is the time between the acquisition of assets for processing and their realization in cash or cash equivalents.

(V) Previous Year Figures

The financial statements for the year ended 31st March, 2015 have been presented as per the Revised Schedule VI to the Companies Act, 1956. Accordingly, the previous year's figures have also been reclassified to conform to this year's classification.

(VI) Revenue Recognition

(a) All revenues, costs, assets and liabilities are accounted for on accrual basis.

(b) Dividend income is accounted when the right to receive payment is established and known.

(c) Revenue from sale of goods is recognized when the significant risks and rewards of ownership of the goods are transferred to the customer and is stated net of trade discounts; excise duty sales returns and sales tax.

(d) Revenue from interest is recognized on a time proportion basis taking into account the amount outstanding and the applicable rate of interest.

(e) Non compete fees received in a financial year are apportioned annually over the period of the Contract.

(VII) Fixed Assets / Depreciation / Amortization

(a) Tangible / Fixed Assets Fixed Assets are stated at cost or revaluation, net of CENVAT and VAT. Cost comprises the purchase price and any attributable cost of bringing the assets to working condition for its intended use. Assets under installation or under construction / modernization including respective pre-operative expenses at the Balance Sheet date are shown under capital work-in-progress. Interest on borrowing for acquisition of qualifying assets is capitalised. Profit or loss on disposal of fixed assets is recognized in Profit and Loss Account

(b) Intangible: Trade Mark

i) Product under the brand name of "Instacolour" was launched in earlier years for which a significant amount in terms of advertisement etc. was incurred for promotion of the above brand. The company had applied for registration of such brand as Trade mark, expenses incurred on such brand from the date of launching till 31st March, 1999 was capitalized but registration department has still not issued the necessary registration certificate. ii) Intangible assets are recognized only when future economic benefits arising out of the assets flow to the enterprise and are amortised over their useful life ranging from 3 to 6 years.

(c) Depreciation

i) Consequent to the enactment of the Companies Act,2013 (the Act) and its applicability from accounting period commencing after 1st April,2014, the company has reviewed and revised the estimated useful lives of its fixed assets, generally in accordance with the provisions of the Schedule II of the Act. The company has charged depreciation based on useful lives as prescribed under the schedule.

(VIII) Impairment Loss

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 amount of assets either belonging to cash generating unit (CGU) or otherwise exceeds recoverable amount. The recoverable amount is the greater of asset's net selling price or its value in use. In assessing value in use, the estimated future cash flows from the use of the assets are discounted to their present value at appropriate rate. Impairment loss in excess of Revaluation Surplus is recognised as expense in Profit & Loss Account. An impairment loss is reversed if there has been change in the recoverable amount and such loss either no longer exist 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 pro-rata basis. Impairment loss on revalued assets/CGU previously charged as expenses is recognised as income in the Profit and Loss Account.

(IX) Investments

a) Investments are capitalized at actual cost including cost incidental to acquisition.

b) Investments are classified as long term and current on the basis decision taken by the Board of Directors at the time of making Investments.

c) Long term Investments are individually valued at cost less provision for diminution other than temporary.

d) Current Investments, if any, are valued at lower of cost or market value determined on category of investment basis.

e) Reclassification of Investments from current to long term categories is made at the lower of cost or market value at the date of transfer and resultant profit/loss, if any, are accounted for in the Profit & Loss Account.

(X) Valuation of Inventories

a) Stores and spare parts are valued at cost less provisions as required on account of damages and obsolescence.

b) Stock in trade comprising of raw materials (including in transit), packing materials, stock in process and finished goods are valued at the lower of cost and net realizable value less provisions as required on account of damages and obsolescence.

c) Cost in respect of raw materials, packing materials and stores and spares include expenses incidental to procurement thereof.

d) Cost in respect of finished goods represents prime cost and includes appropriate portion of overhead cost and excise duty.

e) Cost in respect of work in progress represents costs up to the stage of completion.

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

g) Cost where applicable has been arrived at on weighted average method.

(XI) Foreign Currencies

Transactions in foreign currency are recorded in rupees by applying rate of exchange ruling at the time of transaction and exchange differences arising on settlements except for acquisition of fixed assets are dealt with in the Profit & Loss Account. Unsettled transactions are converted at the year-end rate and gain or loss arising on such transaction is recognised in the Profit & Loss Account except in respect of exchange differences arising on repayment of foreign currency liabilities incurred for acquiring fixed assets which are adjusted in the carrying cost of the respective fixed assets.

(XII) Research & Development

Revenue expenditure on research & Development is charged to Profit & Loss Account in the year in which it is incurred. Capital expenditure on Research and Development is treated in the same way as additions to fixed assets.

(XIII) Leased Equipment

Rental in respect of leased equipment acquired under financial lease is charged to the Profit & Loss Account.

(XIV) Amortization of expenses

a) Expenses incurred in connection with issue of debentures are written off over the period of such debentures or ten years whichever is earlier.

b) Preference Share issue expenses are charged off to revenue over the period of such Preference Shares.

(XV) Retirement Benefits Provident Fund

Contributions to Provident Fund are defined contribution plans and are paid to appropriate authorities and charged to Profit and Loss Account on accrual basis. There are no other obligations other than the contribution payable to respective authorities.

Gratuity

The Company provides for gratuity, a defined benefit retirement plan (the "Gratuity Plan") covering eligible employees. In accordance with the Payment of Gratuity Act, 1972, the Gratuity Plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee's salary and the tenure of employment. Liabilities with regard to the Gratuity Plan are determined by actuarial valuation as of the balance sheet date. Actuarial gains and losses are adjusted to the profit and loss account in the period in which it arises.

Leave Encashment Plan

The Company provides for leave encashment on actuarial basis as of balance sheet date.

(XVI) Taxes on Income

Tax expense comprises of current and deferred tax. Current income tax is measured at the amount expected to be paid, if any, to the tax authorities in accordance with the Indian Income Tax Act. Deferred income taxes reflect the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. Unrecognized deferred tax assets of earlier years are re-assessed and recognized to the extent that it has become reasonably or virtually certain that future taxable income will be available against which such deferred tax assets can be realized.

(XVII) 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, it is probable that there will be an outflow of resources and a reliable estimate can be made of the amount of the obligation. These are reviewed at each balance sheet date and adjusted to reflect the current best estimate. Contingent Assets are neither recognized nor disclosed in the financial statements. Contingent liabilities are not provided for and are disclosed by way of notes.

(XVIII) CENVAT

Excise duty payments included in purchase of Raw Materials are considered as inputs for conversion and debited to CENVAT ACCOUNT, which is utilized against despatch of finished goods after conversion of those raw materials into finished goods. Accordingly, purchase account is debited with the value of goods and other expenses but not the excise duty on purchase.

(XIX) Events Occurring after the Balance Sheet Date

Occurrences of events after the Balance Sheet date and having material effect on the revenue statements of the year under review have been considered in drawing-up the accounts.


Mar 31, 2014

(I) Basis of Presenting Financial Statements

The financial statements are prepared on going concern basis under historical cost convention modified by the revaluation of certain fixed assets and are in accordance with the requirements of the Companies Act, 1956, and comply with the Mandatory Accounting Standards referred to in sub-section (3C) of Section 211 of the said Act Accounting Policies, unless specifically stated to be otherwise, are consistent and are in consonance with generally accepted accounting principles.

(II) Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles (GAAP) in India requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and the disclosure of contingent liabilities on the date of financial statements and the reported amount of revenue and expenses during the reporting period actual results could defer from those estimates. Any revision to accounting estimates is recognised prospectively in current and future period.

(III) Classification of Assets and Liabilities

The Revised Schedule VI to the Companies Act, 1956 requires assets and liabilities to be classified as either Current or Non-current.

(a) An asset shall be classified as current when it satisfies any of the following criteria:

(i) It is expected to be realized in, or is intended for sale or consumption in, the Company''s normal operating cycle.

(ii) It is held primarily for the purpose of being traded.

(lii) It is expected to be realized within twelve months after the reporting date, or

(iv) It is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least twelve months afterthe reporting date.

(b) All assets other than current assets shall be classified as non-current.

(c) A liability shall be classified as current when it satisfies any of the following criteria:

(i) It is expected to be settled in the company''s normal operating cycle.

(ii) It is held primarily for the purpose of being traded.

(iii) It is due to be settled within twelve months after the reporting date, or

(iv) The company does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

(d) All liabilities other than current liabilities shall be classified as non-current.

(IV) Operating Cycle

An operating cycle is the time between the acquisition of assets for processing and their realization in cash or cash equivalents.

(V) Previous Year Figures

The financial statements for the year ended 31st March, 2014 have been presented as per the Revised Schedule VI to the Companies Act, 1956. Accordingly, the previous year''s figures have also been reclassified to conform to this year''s classification.

(VI) Revenue Recognition

(a) All revenues, costs, assets and liabilities are accounted for on accrual basis.

(b) Dividend income is accounted when the right to receive payment is established and known.

(c) Revenue from sale of goods is recognized when the significant risks and rewards of ownership of the goods are

Transferred to the customer and is stated net of trade discounts; excise duty sales returns and sales tax.

(d) Revenue from interest is recognized on a time proportion basis taking into account the amount outstanding and the applicable rate of interest.

(e) Non compete fees received in a financial year are apportioned annually over the period of the Contract.

(VII) Fixed Assets

(a) Tangible:

Fixed Assets are stated at cost or revaluation, net of CENVAT and VAT. Cost comprises the purchase price and any attributable cost of bringing the assets to working condition for its intended use. Assets under installation or under construction / modernization including respective pre-operative expenses at the Balance Sheet date are shown under capital work-in-progress. Interest on borrowing for acquisition of qualifying assets is capitalised. Profit or loss on disposal of fixed assets is recognized in Profit and Loss Account

(b) Intangible: Trade Mark

A product under the brand name of "Instacolour" was launched in earlier years for which a significant amount in terms of advertisement etc. was incurred for promotion of the above brand. The company had applied for registration of such brand as Trade mark, expenses incurred on such brand from the date of launching till 31st March, 1999 was capitalized but registration department has still not issued the necessary registration certificate.

(c) Depreciation

Depreciation is provided on straight line/written down value method on prorata basis at the rates specified in the Schedule XIV of the companies Act,1956.

Types of Assets : Depreciation Policy :

Assets acquired up Written down method to 30.06.1986

Assets acquired on Straight line method and from 1.07.1986

Leasehold land Period of lease

Freehold land Not depreciated

Trade Mark

Impaired Assets

Revalued Assets

At Straight line method over a period of 10 years Straight line method on revised carrying cost over its remaining useful life.

Depreciation on the amount added on revaluation is set off against revaluation reserve.

(VIII) Impairment Loss

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 amount of assets either belonging to cash generating unit (CGU) or otherwise exceeds recoverable amount. The recoverable amount is the greater of asset''s net selling price or its value in use. In assessing value in use, the estimated future cash flows from the use of the assets are discounted to their present value at appropriate rate. Impairment loss in excess of Revaluation Surplus is recognised as expense in Profit & Loss Account. An impairment loss is reversed if there has been change in the recoverable amount and such loss either no longer exist 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 pro-rata basis. Impairment loss on revalued assets/CGU previously charged as expenses in recognised as income in the Profit and Loss Account.

(IX) Investments

a) Investments are capitalized at actual cost including cost incidental to acquisition.

b) Investments are classified as long term and current on the basis decision taken by the Board of Directors at the time of making Investments.

c) Long term Investments are individually valued at cost less provision for diminution other than temporary.

d) Current Investments, if any, are valued at lower of cost or market value determined on category of investment basis.

e) Reclassification of Investments from current to long term categories is made at the lower of cost or market value at the date of transfer and resultant profit/loss, if any, are accounted for in the Profit & Loss Account.

(X) Valuation of Inventories

a) Stores and spare parts are valued at cost less provisions as required on account of damages and obsolescence.

b) Stock in trade comprising of raw materials (including in transit), packing materials, stock in process and finished goods are valued at the lower of cost and net realizable value less provisions as required on account of damages and obsolescence.

c) Cost in respect of raw materials, packing materials and stores and spares include expenses incidental to procurement thereof.

d) Cost in respect of finished goods represents prime cost and includes appropriate portion of overhead cost and excise duty.

e) Cost in respect of work in progress represents costs up to the stage of completion.

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

g) Cost where applicable has been arrived at on weighted average method.

(XI) Foreign Currencies

Transactions in foreign currency are recorded in rupees by applying rate of exchange ruling at the time of transaction and exchange differences arising on settlements except for acquisition of fixed assets are dealt with in the Profit & Loss Account. Unsettled transactions are converted at the year-end rate and gain or loss arising on such transaction is recognised in the Profit & Loss Account except in respect of exchange differences arising on repayment of foreign currency liabilities incurred for acquiring fixed assets which are adjusted in the carrying cost of the respective fixed assets.

(XII) Research & Development

Revenue expenditure on research & Development is charged to Profit & Loss Account in the year in which it is incurred. Capital expenditure on Research and Development is treated in the same way as additions to fixed assets.

(XIII) Leased Equipment

Rental in respect of leased equipment acquired under financial lease is charged to the Profit & Loss Account.

(XIV) Amortization of expenses

a) Expenses incurred in connection with issue of debentures are written off over the period of such debentures or ten years whichever is earlier.

b) Preference Share issue expenses are charged off to revenue over the period of such Preference Shares.

(XV) Retirement Benefits Provident Fund

Contributions to Provident Fund are defined contribution

plans and are paid to appropriate authorities and charged to Profit and Loss Account on accrual basis. There are no other obligations other than the contribution payable to respective authorities.

Gratuity

The Company provides for gratuity, a defined benefit retirement plan (the "Gratuity Plan") covering eligible employees. In accordance with the Payment of Gratuity Act, 1972, the Gratuity Plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee''s salary and the tenure of employment. Liabilities with regard to the Gratuity Plan are determined by actuarial valuation as of the balance sheet date. Actuarial gains and losses are adjusted to the profit and loss account in the period in which it arises.

Leave Encashment Plan

The Company provides for leave encashment on actuarial basis as of balance sheet date.

(XVI) Taxes on Income

Tax expense comprises of current and deferred tax. Current income tax is measured at the amount expected to be paid, if any, to the tax authorities in accordance with the Indian Income Tax Act. Deferred income taxes reflect the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance , sheet date. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. Unrecognized deferred tax assets of earlier years are re-assessed and recognized to the extent that it has become reasonably or virtually certain that future taxable income will be available against which such deferred tax assets can be realized.

(XVII) 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, it is probable that there will be an outflow of resources and a reliable estimate can be made of the amount of the obligation.

These are reviewed at each balance sheet date and adjusted to reflect the current best estimate. Contingent Assets are neither recognized nor disclosed in the financial statements. Contingent liabilities are not provided for and are disclosed by way of notes.

(XVIII) CENVAT

Excise duty payments included in purchase of Raw Materials are considered as inputs for conversion and debited to CENVAT ACCOUNT, which is utilized against despatch of finished goods after conversion of those raw materials into finished goods. Accordingly, purchase account is debited with the value of goods and other expenses but not the excise duty on purchase.

(XIX) Events Occurring after the Balance Sheet Date Occurrences of events after the Balance Sheet date and having material effect on the revenue statements of the year under review have been considered in drawing-up the accounts Of the above Ordinary Shares :

1.1 Till 1982, 5,25,000 Ordinary Shares were allotted as fully paid up by way of bonus shares, by capitalisation of Reserves.

1.2 7,50,000 Ordinary shares were allotted as fully paid bonus shares in 1991-92 by capitalisation of General Reserves and

Share Premium Account.

1.3 1,14,17,057 Ordinary Shares of Rs.2/-each fully paid were allotted to promoters'' group and overseas corporate bodies at a premium ofRs. 7.40 per share on conversion of the Optionally Convertible Debentures amounting to Rs. 1000.42 lacs issued to them and interest thereon.

1.4 53,19,148 Ordinary Shares of Rs. 2/- each fully paid were allotted to Unit Trust of India on conversion of the

Optionally Convertible Debentures amounting toRs. 500.00 lacs issued to them at a premium of Rs. 7.40 per share.

Of the above Preference Shares:

1.5 10,00,00014.5% Cumulative Redeemable Preference Shares ofRs. 100/-each issued in three tranches in 1997-98 redeemable at par at the end of the fifth year from the dates of allotment, i.e., 25.09.2002, 27.10.2002 and 08.12.2002 with option for early redemption not exceeding 25% of the aggregate of the Preference Shares outstanding at the end of the fourth year from the date of the allotment, i.e., 25.09.2001,27.10.2001 and 08.12.2001. These Preference Shares have not been redeemed as yet.

1.6 7,00,00014% Cumulative Redeemable Preference Shares of Rs. 100/-each issued in two tranches in 1998-99 are redeemable at par at the end of the fifth year, sixth year and seventh year from the respective dates of allotment i.e., 01.02.2004 and 09.02.2004, 01.02.2005 and 09.02.2005 and 01.02.2006 and 09.02.2006 in the proportion of 30%, 30% and 40% respectively. The Preference Shareholders had filed a notice for redemption of the aforesaid preference shares.

1.7 The details of Share Holding more than 5% shares:

Name of Lenders : Sirius Financial Services Pvt. Ltd

Original Lendors : United Bank of India, Indian Overseas Bank, IDBI

Charge : United Bank of India - First charge on all immovable properties of the company at Naihati and Sikandrabad together with all building and infrastructure thereon and all Plant and Machinery attched to the earth., and second charge on all moveable assets. Personal Guarantee by the promoters of the company by Shri S P Sinha and Shri Shailendra Prakash Sinha.

Indian Overseas Bank - First charge on all immovable properties of the company at Naihati and Sikandrabad together with all building and infrastructure thereon and all Plant and Machinery attched to the earth., and second charge on all moveable assets. Personal Guarantee by the promoters of the company by Shri S P Sinha.

IDBI - First charge on all immovable properties of the company at Naihati and Sikandrabad together with all building and infrastructure thereon and all Plant and Machinery attched to the earth, and second charge on all moveable assets.

Name of Lenders : Vivid Colors Pvt. Ltd.

Original Lendors : IIBI, Dombivili Nagari Sahakari Bank Ltd., Punjab Natinal Bank

Charge : IIBI - First charge on all immovable properties of the company at Naihati and Sikandrabad together with all building and infrastructure thereon and all Plant and Machinery attached to the earth, and second charge on all moveable assets. Personal Guarantee by the promoters of the company by Shri S P Sinha and Shir Shailendra Prakash Sinha.

Dombivili Nagari Sahakari Bank Ltd - Hypothecation of Plant and Machinery.

Punjab Natinal Bank - Whole immovable properties of the company including plant & machinery, spares, tools office equipments and furniture & fixtures, and Personal guarantee by the promoter of the company by Shri S P Sinha.

3.1 Term Loan from Banks and financial institutions (United Bank of India, Dombivli Nagari Sahakari Bank Ltd.PNB, Indian Overseas Bank,IIBI,and IDBI) are secured by equitable mortgage of immovable properties of the Company and by way of charge on movable plant and machinery, machinery spares, tools and accessories and other movables both present and future. The Term Loan from IIBI included in the above loans is also guaranteed by two of the Promoters of the Company.Term loans from IDBI, United Bank of India and Indian Overseas Bank have been assigned in favour of Sirius Financial Services Pvt. Ltd through IFCI Ltd. The term loan from Dombivili Nagari Sahakari Bank Ltd, IIBI, Canara Bank and Punjab National Bank has been assigned in favour of Vivid Colors Pvt. Ltd. through Asset Care & Reconstruction Enterprise Ltd (ACRE)

3.3 The company has stopped providing interest on all loans from Banks and Financial Institutions whether secured and unsecured w.e.f. 01.04.2006 on the ground that these loans would have been declared NPAby them.

3.4 Loans and advances from Related Parties are:

Advance received from M/s Maurya Management Pvt Ltd. Remaining outstanding as on 31st March, 2014 Rs. 500 lacs. Refer note no. 3 of the Note on the Financial Statements

Current Lendors : Sirius Financial Services Pvt. Ltd

Original Lendors : State Bank of India, Union Bank of India, Bank of Baroda, Bank of India, SBI Home Finance Ltd, SIDBI

Charge : State Bank of India, Union Bank of India, Bank of Baroda, Bank of India, SBI Home Finance Ltd - First Charge on all book debts, money receivables, stocks, lab equipments furnitures and motor vehicles at different sites of the company, and second charge on Land and Building and Plant and Machinery attached to the earth at Sikandrabad and Naihati

SIDBI - First charge on all immovable properties of the company at Naihati and Sikandrabad together with all building and infrastructure thereon and all Plant and Machinery attached to the earth, and second charge on all moveable assets.

Current Lendores : ACRE

ORiginal Lendors : Canara Bank

Charge : First Charge on all book debts, money receivables, stocks, lab equipments furnitures and motor vehicles at different sites of the company, and second charge on Land and Building and Plant and Machinery attached to the earth at Sikandrabad and Naihati.

Cuurent Lendors : Vivid Colors Pvt. Ltd.

Original Lendors : Allahabad Bank, National Co-Operative Bank, Standard Chartered Bank, Global Trust Bank (OBC)

Charge : Allahabad Bank - First Charge on all book debts, money receivables, stocks, lab equipments furnitures and motor vehicles at different sites of the company, and second charge on Land and Building and Plant and Machinery attached to the earth at Sikandrabad an Naihati. National Co-Operative Bank - Includes 151.25 lacs secured by pledge of various raw materials & components (imported or indigenous) and guaranteed by one of the Directors of the Company. Security documentation is pending. Standard Chartered Bank - First charge on Insta Color Machines (Tinting Machines) Global Trust Bank (OBC) - Second charge on all Fixed assets of the company and Personal Guarantee of Shri S P Sinha.

6.1 Cash credit and working capital loan from banks are secured by way of charge on Company''s stocks (not relatingto plant and machinery), bills receivable, book debts and other movables both present and future except for certain Jensomatic Automatic Machines hypothecated by way of a first charge in favour of a banker. Temporary overlimit taken from a bank is also guaranteed by one of the Directors of the Company. Cash Credit and working capital loans from State Bank of India, Bank of Baroda, Bank of India and Union Bank of India have been assigned in favour of Sirius Financial Services Pvt. Ltd through IFCl Ltd. and for Allahabad Bank & Standard Chartered Bank Global Trust Bank (OBC) have been assigned in favour of Vivid Colors Pvt Ltd.

6.2 Bill Discounting facility from SIDBI is secured by a charge on whole of the immovable properties of the Company together with building, Plant and Machinery and other items attached to the earth or permanently fastened to earth. Subsequently the entire loan has been assigned in favour of Sirius Financial Services Pvt. Ltd through IFCl Ltd.

6.3 Loans includeRs. 500 lacs received from Global Trust Bank (OBC) originally as Shortterm in 1997-98 for a period of six months as advance for issue of secured Redeemable Non-Convertible debentures ofRs. 100/- each which was subsequently renewed fora further period of six months. No repayment has been made nor any debenture has been issued as yet. Now it has been categorised as Short term as per Schedule VI requirements. The entire loan has been assigned in favour of M/s Vivid Colors Pvt Ltd.

6.4 IncludesRs. 500 lacs as Short Term loan from M/s SBI Home Finance Ltd, the entire loan has been assigned in favour of Sirius Financial Services Pvt. Ltd through IFCl Ltd.

6.5 The company has stopped providing interest on all loans from Banks and Financial Institutions whether secured and unsecured w.e.f. 01.04.2006 on the ground that these loans would have been declared NPAbythem.

6.6 Short Term Borrowings from other parties amounting toRs. 3452.25 lacs (previous year 3177.25 lacs) secured by mortgaged aTTradernarkandGoodwiti.

6.7 Period and amount of Continuing default

The amount due to the suppliers covered under the Micro, Small and Medium Enterprises Development Act,2006, This information takes into account only those suppliers who have responded to the enquiries made by the company for this purpose

Trade payables are dues in respect of goods purchased or services received (including from employees, professionals and others under contract) in the normal course of business.

-There Is no amount due and outstanding to be credited to Investor Eductation & Protection Fund as at 31.03.2014

8.1 78,00,00,000/-, 20.5% Non-Convertible Debentures ofRs. 1007-each redeemable at 5% premium privately placed with IDBI are redeemable in three tranches amounting to 7 200 lacs, 7 400 lacs and 7 200 lacs on 1st January, 2004,2005 and 2006. However the said debenture has not been redeemed. Subsequently the entire loan has been assigned in favour of Sirius Financial Services Pvt. Ltd through IFCI.

8.2 71,00,00,000,15% Non-Convertible Debentures of 7 100/-each privately placed with NIA were redeemable attheendof the third year from the date of allotment i.e., 25th February, 2003 at par. However the said debenture has not been redeemed yet.

8.3 75,00,00,000,15% Non-Convertible Debentures of 7 100/- each privately placed with UTI are redeemable in three tranches of equal amount at the end of the 4th,5th and 6th year from the date of allotmenti.e.,on 18th October,2003,2004,2005 respectively at par. The entire loan has been assigned in favour of Vivid Colors Pvt. Ltd. through ACRE.

8.5 All the Non-Convertible Debentures and Optionally Convertible Debentures are to be secured by an equitable mortgage of the Company''s all immovable properties both present and future and hypothecation of other movable assets save and except stock and book debts (by way of second charge) ranking pari-passu with mortgage /charge created in favour of Sirius Financial Services Pvt. Ltd/Vivid Colors Pvt. Ltd. Security documen- tations are pending for 15% NCD placed with NIA, 15% NCD placed with UTI and 13.5% OCD placed with UTI.

Notes:

1. The Company revalued its freehold land, buildings and plant & machinery as at 30.06.85 and thereafter on 30.09.95 further revalued its land and building.These revaluations resulted in net increase in value of assets by Rs. 334063 as at 30th September, 1995 which was credited to Revaluation Reserve.

2 Freehold Land:

ACRE under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act,2002 has sold out the Panvel property in excercise of powers conferred under section 13(4) of the said act.

Description of Immovable Property taken by ACRE: ¦

Land admeasuring 24,195 sq yds situated at Panvel (Khanda), Taluka- Panvel, Dist. Raigad (Maharashtra) and comprised in Survey No. 102 (P), 107 (P) and 780 (Part).

3 That the Asset care and Reconstruction Ltd. (ACRE) has acquired the debt and financial assets from the Dombivili Nagari Sahkari Bank Ltd., Specified Undertaking of the Unit Trust of India, Industrial Investment Bank of India, Punjab National Bank and Canara Bank under the deed of assignment dated 28/02/2010,29/03/2011,21 /06/2011,22/06/2011 and 03/12/2012 respectively. The aforesaid debts/ financial assets are secured by equitable mortgage of immovable properties of the company and by way of charge on movable assets including current assets. The ACRE under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act,2002 and in exercise of powers confened under section 13(12) read with Rule 9 of the security interest repay the amount mentioned in the said notice being Rs. 11770.50 Lacs. The company have failed to repay the amount, so the ACRE has taken possession of the Sikandrabad property, the entire movable assets including current assets situated at plot no. 21 & 22, Sikandrabad Industrial Area, Dist. Bullandshahar (U. P.) in exercise of powers conferred under section 13(4) of the said acton the 21 st May, 2013.

Description of Immovable Property taken by ACRE:

Land admeasuring 67,144.44 sq meterbearing plot no. 21 & 22, situated at Sikandrabad Industrial area, Dist. Bullandshahar(U. P.)

4 During the quarter ended 31st December, 2013, the Land & Building situated at Panvel has been sold by Asset Care & Reconstruction Enterprises Limited (ACRE) under Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act. The profit from sale of Land & Building amounting toRs. 4034.54 lacs and included in other income for the quarter ended 31st December, 2013.

5 During the yearthe Company mortagaged Trade Mark and Goodwill in favour of Vivid Colors Pvt. Ltd. against their Shortterm Loan amounting to Rs. 3452.25 lacs.


Mar 31, 2013

(I) Basis of Presenting Financial Statements

The financial statements are prepared on going concern basis under historical cost convention modified by the revaluation of certain fixed assets and are in accordance with the requirements of the Companies Act, 1956, and comply with the Mandatory Accounting Standards referred to in sub- section (3C) of Section 211 of the said Act Accounting Policies, unless specifically stated to be otherwise, are consistent and are in consonance with generally accepted accounting principles.

(II) Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles (GAAP) in India requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and the disclosure of contingent liabilities on the date of financial statements and the reported amount of revenue and expenses during the reporting period actual results could defer from those estimates. Any revision to accounting estimates is recognised prospectively in current and future period.

(III) Classification of Assets and Liabilities

The Revised Schedule VI to the Companies Act, 1956 requires assets and liabilities to be classified as either Current or Non-current.

(a) An asset shall be classified as current when it satisfies any of the following criteria:

(i) It is expected to be realized in, or is intended for sale or consumption in, the Company''s normal operating cycle.

(ii) It is held primarily for the purpose of being traded.

(iii) It is expected to be realized within twelve months after the reporting date, or

(iv)lt is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting date.

(b) All assets other than current assets shall be classified as non-current.

(c) A liability shall be classified as current when it satisfies any of the following criteria:

(i) It is expected to be settled in the company''s normal operating cycle.

(ii) It is held primarily for the purpose of being traded.

(iii) It is due to be settled within twelve months after the reporting date, or

(iv)The company does not have'' an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

(d) All liabilities other than current liabilities shall be classified as non-current.

(IV) Operating Cycle

An operating cycle is the time between the acquisition of assets for processing and their realization in cash or cash equivalents.

(V) Previous Year Figures

The financial statements for the year ended 31st March, 2013 have been presented as per the Revised Schedule VI to the Companies Act, 1956. Accordingly, the previous year''s figures have also been reclassified to conform to this year''s classification.

(VI) Revenue Recognition

(a) All revenues, costs, assets and liabilities are accounted for on accrual basis.

(b) Dividend income is accounted when the right to receive payment is established and known.

(c) Revenue from sale of goods is recognized when the significant risks and rewards of ownership of the goods are transferred to the customer and is stated net of trade discounts; excise duty sales returns and sales tax.

(d) Revenue from interest is recognized on a time proportion basis taking into account the amount outstanding and the applicable rate of interest.

(e) Non compete fees received in a financial year are apportioned annually over the period of the Contract.

(VII) Fixed Assets (a) Tangible:

Fixed Assets are stated at cost or revaluation, net of CENVAT and VAT. Cost comprises the purchase price and any attributable cost of bringing the assets to working condition for its intended use. Assets under installation or under construction / modernization including respective pre- operative expenses at the Balance Sheet date are shown under capital work-in-progress.. Interest on borrowing for acquisition of qualifying assets is capitalised. Profit or loss on disposal of fixed assets is recognized in Profit and Loss Account

(b) Intangible: Trade Mark

A product under the brand name of "Instacolour" was launched in earlier years for which a significant amount in terms of advertisement etc. was incurred for promotion of the above brand. The company had applied for registration of such brand as Trade mark, expenses incurred on such brand from the date of launching till 31st March, 1999 was capitalized but registration department has still not issued the necessary registration certificate.

(c) Depreciation

Depreciation is provided on straight line/written down value method on prorata basis at the rates specified in the Schedule XIV of the companies Act, 1956.

(VIII) Impairment Loss

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 amount of assets either belonging to cash generating unit (CGU) or otherwise exceeds recoverable amount. The recoverable amount is the greater of asset''s net selling price or its value in use. In assessing value in use, the estimated future cash flows from the use of the assets are discounted to their present value at appropriate rate. Impairment loss in excess of Revaluation Surplus is recognised as expense in Profit & Loss Account. An impairment loss is reversed if there has been change in the recoverable amount and such loss either no longer exist 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 pro- rata basis. Impairment loss on revalued assets/CGU previously charged as expenses is recognised as income in the Profit and Loss Account.

(IX) Investments

(a) Investments are capitalized at actual cost including cost incidental to acquisition.

(b) Investments are classified as long term and current on the basis decision taken by the Board of Directors at the time of making Investments.

(c) Long term Investments are individually valued at cost less provision for diminution other than temporary.

(d) Current Investments, if any, are valued at lower of cost or market value determined on category of investment basis.

(e) Reclassification of Investments from current to long term categories is made at the lower of cost or market value at the date of transfer and resultant profit/loss, if any, are accounted for in the Profit & Loss Account.

(X) Valuation of Inventories

(a) Stores and spare parts are valued at cost less provisions as required on account of damages and obsolescence.

(b) Stock in trade comprising of raw materials (including in transit), packing materials, stock in process and finished goods are valued at the lower of cost and net realizable value less provisions as required on account of damages and obsolescence.

(c) Cost in respect of raw materials, packing materials and stores and spares include expenses incidental to procurement thereof.

(d) Cost in respect of finished goods represents prime cost and includes appropriate portion of overhead cost and excise duty.

(e) Cost in respect of work in progress represents costs up to the stage of completion.

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

(g) Cost where applicable has'' been arrived at on weighted average method.

(XI) Foreign Currencies

Transactions in foreign currency are recorded in rupees by applying rate of exchange ruling at the time of transaction and exchange differences arising on settlements except for acquisition of fixed assets are dealt with in the Profit & Loss Account. Unsettled transactions are converted at the year-end rate and gain or loss arising on such transaction is recognised in the Profit & Loss Account except in respect of exchange differences arising on repayment of foreign currency liabilities incurred for acquiring fixed assets which are adjusted in the carrying cost of the respective fixed assets.

(XII) Research & Development

Revenue expenditure on research & Development is charged to Profit & Loss Account in the year in which it is incurred. Capital expenditure on Research and Development is treated in the same way as additions to fixed assets.

(XHI) Leased Equipment

Rental in respect of leased equipment acquired under financial lease is charged to the Profit & Loss Account.

(XIV) Amortization of Expenses

a) Expenses incurred in connection with issue of debentures are written off over the period of such debentures or ten years whichever is earlier.

b) Preference Share issue expenses are charged off to revenue over the period of such Preference Shares.

(XV) Retirement Benefits Provident Fund

Contributions to Provident Fund are defined contribution plans and are paid to appropriate authorities and charged to Profit and Loss Account on accrual basis. There are no other obligations other than the contribution payable to respective authorities. Gratuity

The Company provides for gratuity, a defined benefit retirement plan (the "Gratuity Plan") covering eligible employees. In accordance with the Payment of Gratuity Act, 1972, the Gratuity Plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee''s salary and the tenure of employment. Liabilities with regard to the Gratuity Plan are determined by actuarial valuation as of the balance sheet date.Actuarial gains and losses are adjusted to the profit and loss account in the period in which it arises.. Leave Encashment Plan

The Company provides for leave encashment on actuarial basis as of balance sheet date.

(XVI) Taxes on Income

Tax expense comprises of current and deferred tax. Current income tax is measured at the amount expected to be paid, if any, to the tax authorities in accordance with the Indian Income Tax Act. Deferred income taxes reflect the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. Unrecognized deferred tax assets of earlier years are re-assessed and recognized to the extent that it has become reasonably or virtually certain that future taxable income will be available against which such deferred tax assets can be realized.

(XVII) 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, it is probable that there will be an outflow of resources and a reliable estimate can be made of the amount of the obligation. These are reviewed at each balance sheet date and adjusted to reflect the current best estimate. Contingent Assets are neither recognized nor disclosed in the financial statements. Contingent liabilities are not provided for and are disclosed by way of notes.

(XVIII) Cenvat

Excise duty payments included in purchase of Raw Materials are considered as inputs for conversion and debited to CENVAT ACCOUNT, which is utilized against despatch of finished goods after conversion of those raw materials into finished goods. Accordingly, purchase account is debited with the value of goods and other expenses but not the excise duty on purchase.

(XIX) Events Occurring after the Balance Sheet Date Occurrences of event after the Balance Sheet Date & having material effect on the revenue statements of the year under review have been considered in drawing up the accounts.


Mar 31, 2012

(I) Basis of Presenting Financial Statements

The financial statements are prepared on going concern basis under historical cost convention modified by the revaluation of certain fixed assets and are in accordance with the requirements of the Companies Act, 1956, and comply with the Mandatory Accounting Standards referred to in sub- section (3C) of Section 211 of the said Act Accounting Policies, unless specifically stated to be otherwise, are consistent and are in consonance with generally accepted accounting principles.

(II) Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles (GAAP) in India requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and the disclosure of contingent liabilities on the date of financial statements and the reported amount of revenue and expenses during the reporting period actual results could defer from those estimates. Any revision to accounting estimates is recognised prospectively in current and future period.

(III) Classification of Assets and Liabilities

The Revised Schedule VI to the Companies Act, 1956 requires assets and liabilities to be classified as either Current or Non-current.

(a) An asset shall be classified as current when it satisfies any of the following criteria:

(i) It is expected to be realized in, or is intended for sale or consumption in, the Company's normal operating cycle.

(ii) It is held primarily for the purpose of being traded.

(iii)lt is expected to be realized within twelve months after the reporting date, or

(iv)lt is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting date.

(b) All assets other than current assets shall be classified as non-current.

(c) A liability shall be classified as current when it satisfies any of the following criteria:

(i) It is expected to be settled in the company's normal operating cycle.

(ii) It is held primarily for the purpose of being traded.

(iii) It is due to be settled within twelve months after the reporting date, or

(iv)The company does not have' an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

(d) All liabilities other than current liabilities shall be classified as non-current.

(IV) Operating Cycle

An operating cycle is the time between the acquisition of assets for processing and their realization in cash or cash equivalents.

(V) Previous Year Figures

The financial statements for the year ended 31st March, 2012 have been presented as per the Revised Schedule VI to the Companies Act, 1956. Accordingly, the previous year's figures have also been reclassified to conform to this year's classification.

(VI) Revenue Recognition

(a) All revenues, costs, assets and liabilities are accounted for on accrual basis.

(b) Dividend income is accounted when the right to receive payment is established and known.

(c) Revenue from sale of goods is recognized when the significant risks and rewards of ownership of the goods are transferred to the customer and is stated net of trade discounts; excise duty sales returns and sales tax.

(d) Revenue from interest is recognized on a time proportion basis taking into account the amount outstanding and the applicable rate of interest.

(e) Non compete fees received in a financial year are apportioned annually over the period of the Contract.

(VII) Fixed Assets (a) Tangible:

Fixed Assets are stated at cost or revaluation, net of CENVAT and VAT. Cost comprises the purchase price and any attributable cost of bringing the assets to working condition for its intended use. Assets under installation or under construction / modernization including respective pre- operative expenses at the Balance Sheet date are shown under capital work-in-progress. . Interest on borrowing for acquisition of qualifying assets is capitalised. Profit or loss on disposal of fixed assets is recognized in Profit and Loss Account

(b) Intangible: Trade Mark

A product under the brand name of "Instacolour" was launched in earlier years for which a significant amount in terms of advertisement etc. was incurred for promotion of the above brand. The company had applied for registration of such brand as Trade mark, expenses incurred on such brand from the date of launching till 31st March, 1999 was capitalized but registration department has still not issued the necessary registration certificate.

(VIII) Impairment Loss

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 amount of assets either belonging to cash generating unit (CGU) or otherwise exceeds recoverable amount. The recoverable amount is the greater of asset's net selling price or its value in use. In assessing value in use, the estimated future cash flows from the use of the assets are discounted to their present value at appropriate rate. Impairment loss.in excess of Revaluation Surplus is recognised as expense in Profit & Loss Account. An impairment loss is reversed if there has been change in the recoverable amount and such loss either no longer exist 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 pro- rata basis. Impairment loss on revalued assets/CGU previously charged as expenses is recognised as income in the Profit and Loss Account.

(IX) Investments

(a) Investments are capitalized at actual cost including cost incidental to acquisition.

(b) Investments are classified as long term and current on the basis decision taken by the Board of Directors at the time of making Investments.

(c) Long term Investments are individually valued at cost less provision for diminution other than temporary.

(d) Current Investments, if any, are valued at lower of cost or market value determined on category of investment basis.

(e) Reclassification of Investments from current to long term categories is made at the lower of cost or market value at the date of transfer and resultant profit/loss, if any, are accounted for in the Profit & Loss Account.

(X) Valuation of Inventories

(a) Stores and spare parts are valued at cost less provisions as required on account of damages and obsolescence.

(b) Stock in trade comprising of raw materials (including in transit), packing materials, stock in process and finished goods are valued at the lower of cost and net realizable value less provisions as required on account of damages and obsolescence.

(c) Cost in respect of raw materials, packing materials and stores and spares include expenses incidental to procurement thereof.

(d) Cost in respect of finished goods represents prime cost and includes appropriate portion of overhead cost and excise duty.

(e) Cost in respect of work in progress represents costs up to the stage of completion.

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

(g) Cost where applicable has been arrived at on weighted average method.

(XI) Foreign Currencies

Transactions in foreign currency are recorded in rupees by applying rate of exchange ruling at the time of transaction and exchange differences arising on settlements except for acquisition of fixed assets are dealt with in the Profit & Loss Account. Unsettled transactions are converted at the year-end rate and gain or loss arising on such transaction is recognised in the Profit & Loss Account except in respect of exchange differences arising on repayment of foreign currency liabilities incurred for acquiring fixed assets which are adjusted in the carrying cost of the respective fixed assets. (XII)Research & Development

Revenue expenditure on research & Development is charged to Profit & Loss Account in the year in which it is incurred. Capital expenditure on Research and Development is treated in the same way as additions to fixed assets.

(XIII) Leased Equipment

Rental in respect of leased equipment acquired under financial lease is charged to the Profit & Loss Account.

(XIV) Amortization of Expenses

a) Expenses incurred in connection with issue of debentures are written off over the period of such debentures or ten years whichever is earlier. b) Preference Share issue expenses are charged off to revenue over the period of such Preference Shares.

(XV) Retirement Benefits Provident Fund

Contributions to Provident Fund are defined contribution plans and are paid to appropriate authorities and charged to Profit and Loss Account on accrual basis. There are no other obligations other than the contribution payable to respective authorities. Gratuity

The Company provides for gratuity, a defined benefit retirement plan (the "Gratuity Plan") covering eligible employees. In accordance with the Payment of Gratuity Act, 1972, the Gratuity Plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee's salary and the tenure of employment. Liabilities with regard to the Gratuity Plan are determined by actuarial valuation as of the balance sheet date. Actuarial gains and losses are adjusted to the profit and loss account in the period in which it arises.. Leave Encashment Plan

The Company provides for leave encashment on actuarial basis as of balance sheet date.

(XVI) Taxes on Income

Tax expense comprises of current and deferred tax. Current income tax is measured at the amount expected to be paid, if any, to the tax authorities in accordance with the Indian Income Tax Act. Deferred income taxes reflect the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. Unrecognized deferred tax assets of earlier years are re-assessed and recognized to the extent that it has become reasonably or virtually certain that future taxable income will be available against which such deferred tax assets can be realized.

(XVII) 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, it is probable that there will be an outflow of resources and a reliable estimate can be made of the amount of the obligation. These are reviewed at each balance sheet date and adjusted to reflect the current best estimate. Contingent Assets are neither recognized nor disclosed in the financial statements. Contingent liabilities are not provided for and are disclosed by way of notes.

(XVIII) CENVAT

Excise duty payments included in purchase of Raw Materials are considered as inputs for conversion and debited to CENVAT ACCOUNT, which is utilized against despatch of finished goods after conversion of those raw materials into finished goods. Accordingly, purchase account is debited with the value of goods and other expenses but not the excise duty on purchase.


Mar 31, 2010

1) Basis of Accounting

The financial statements are prepared under historical cost convention modified by the revaluation of certain fixed assets, on the basis of a going concern and are in accordance with the requirements of the Companies Act, 1956, and comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the said Act. The Company follows mercantile system of accounting and recognizes income and expenditure on accrual basis.

2) Fixed Assets

i) Freehold land, Buildings and Plant and Machinery as at 30th June, 1985 are stated at valuation which was done by an approved valuer at the then current replacement value. Subsequent acquisition of these assets and other fixed assets are stated at their purchase cost together with any incidental expenses of acquisition. Further Land & Buildings as at 30th September, 1995, was revalued by an approved valuer and the net increase in such revaluation was credited to revaluation reserve. Interest on borrowing for acquisition of qualifying assets is capitalised. During the year 2005- 2006 the company made an assessment for any indication of impairment in the carrying amount of the companys fixed assets and determined the impairment loss on certain fixed assets. As required by the Standard, the impairment loss has been assessed and charged to the Profit & Loss account after adjusting the revaluation reserve on the assets.

ii) Trade Mark

A product under the brand name of "instacolor" was launched in previous years for which a significant amount in terms of advertisement etc. was incurred for promotion of the above brand. The company had applied for registration of such brand as Trade mark, expenses incurred on such brand from the date of launching till 31st March, 1999 was capitalized but registration department has still not issued the necessary registration certificate.

iii) Depreciation

Depreciation is provided on straight line/written down value method on pro rata basis at the rates specified in the Schedule XIV of the Companies Act, 1956, except for following assets as under:

a) (i) Written down value method - on assets acquired upto 30th June, 1986.

(ii) Straight line method - on assets acquired on and from 1st July, 1986.

b) Leasehold land is amortised over the period of the lease.

c) Freehold land is not depreciated.

d) Trade Marks is written off on straight line method over a period of ten years.

e) In respect of impaired assets depreciation is provided under Straight Line Method based on assets revised carrying amount less its residual value if any over its remaining estimated useful life.

f) In respect of revalued assets, depreciation on the amount added on revaluation is set off against Revaluation Reserve.

g) Profit or loss on disposal of fixed assets is recognised in Profit and Loss Account.

3) Impairment Loss

Impairment loss assessment is done at the balance sheet date to determine whether there is any indication of impairment in the carrying amount of the Companys fixed assets. If any such indication exists, the assets recoverable amount is estimated. An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount. After recognition of impairment loss, the depreciation charge for the asset is adjusted in future periods to allocate the assets revised carrying amount, less its residual value (if any), on Straight Line basis over its remaining useful life.

4) Investments

a) Long Term Investments are stated at cost. In case, there is a permanent diminution in the value of any investments, a provision for the same is made in the accounts.

b) Current Investments are stated at lower of cost and market value / repurchase price.

c) Dividend income is accounted when the right to receive payment is established and known.

5) Valuation of Inventories

a) Stores and spare parts are valued at cost less provisions as required on account of damaged and obsolete stocks.

b) Stock in trade comprising of raw materials (including in transit), packing materials, stock in process and finished goods are valued at the lower of cost and net realizable value after making such provisions as required on account of damaged, unserviceable,inert and obsolete stocks.

c) Cost has been arrived at on the basis of weighted average method.

6) Foreign Currencies

Transactions in foreign currency are recorded in rupees by applying rate of exchange ruling at the time of transaction and exchange differences arising on settlements except for acquisition of fixed assets are dealt with in the Profit & Loss Account. Unsettled transactions are converted at the year-end rate and gain or loss arising on such transaction is recognised in the Profit & Loss Account except in respect of exchange differences arising on repayment of foreign currency liabilities incurred for acquiring fixed assets which are adjusted in the carrying cost of the respective fixed assets.

7) Revenue Recognition

Revenue is recognised to the extent that it can be reliably measured and is probable that the economic benefits will flow to the Company.

Sales of Goods:

Revenue from sale of goods is recognized when the significant risks and rewards of ownership of the goods are transferred to the customer and is stated net of trade discounts,excise duty.sales returns and sales tax.

Interest:

Revenue is recognized on a time proportion basis taking into account the amount outstanding and the applicable rate of interest.

Dividend:

Revenue is recognized when the right to receive is established.

8) Research & Development

Revenue expenditure on research & Development is charged to Profit & Loss Account in the year in which it is incurred. Capital expenditure on Research and Development is treated in the same way as expenditure on fixed assets.

9) Leased Equipment

Rental in respect of leased equipment acquired under financial lease is charged to the Profit & Loss Account.

10) Debenture and Share Issue Expenses

Expenses incurred in connection with issue of debentures are written off over the period of such debentures or ten years whichever is earlier.

Preference Share issue expenses are charged off over the period of such Preference Shares.

11) Voluntary Retirement Scheme / Retrenchment Compensation

Payments under voluntary retirement scheme for employees is amortised in equal instalments over a period of five years.

Retrenchment compensation to employees is amortised in equal instalments over a period of 60 months.

12) Retirement Benefits

Contribution to defined contribution scheme such as provident fund etc. are charged to the Profit and Loss Account as incurred. The Company also provides for retirement benefits in the form of Gratuity and Leave Encashment .Such defined benefits are charged to the Profit and Loss Account based on actuarial valuation,as at the balance sheet date,made by independent actuaries.

13) Deferred Taxation

The deferred tax for timing differences between the book and tax profits for the year is accounted for, using the tax rates and laws that have been substantively enacted as of the balance sheet date. Deferred tax assets arising from timing differences are recognized to the extent there is virtual/reasonable certainty that these would be realized in future.

14) Provisions, Contingent Liabilities and Contingent Assets

A provision is made based on a reliable estimate when it is probable that an outflow of resources embodying economic benefits will be required to settle an obligation.

Contingent liabilities, if material, are disclosed by way of notes to accounts. Contingent assets are not recognized or disclosed in the financial statements.

15) CENVAT

Excise duty payments relating to purchases of input are being debited to CENVAT account, which is utilized against despatch of finished goods after conversion of those inputs into finished goods. Accordingly, purchase account is debited with the value of goods and other expenses but not the excise duty on purchase. This is being consistently followed by the Company over the years..

16) Non Compete Fees

Non compete fees received apportioned annually over the period of the Contract.

 
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