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Accounting Policies of Kaira Can Company Ltd. Company

Mar 31, 2015

A Basis of Accounting:

The financial statements of the Company have been prepared on accrual basis under the historical cost convention and on going concern basis in accordance with the Generally Accepted Accounting Principles in India ('Indian GAAP') to comply with the Accounting Standards specified under section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013 ('the Act') / the Companies Act, 1956 as applicable.

B Use of Estimates:

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

C Fixed Assets:

(i) Tangible Fixed Asset:

Fixed Assets are recorded at cost of acquisition or construction net of recoverable taxes. The cost includes financing cost up to the date when such assets are ready for their intended use. They are stated at cost less accumulated depreciation and impairment loss, if any.

(ii) Intangible Assets:

Intangible Assets are stated at cost of acquisition net of recoverable taxes less accumulated amortization / depletion.

D Depreciation and Amortisation:

Depreciation is provided on a pro-rata basis on the straight-line method over the esitmated useful lives of the assets as per the rates prescribed under Schedule II to the Companies Act, 2013.

Cost of Leasehold Land is amortised over the lease period.

Assets costing less than Rs. 5,000/- are fully depreciated in the year of acquisition.

Intangible Assets (Computer Software) is being amortised over a period of five years on straight-line method.

E Impairment of Assets:

Management evaluates at regular intervals, using external and internal sources whether there is any impairment of any asset. Impairment occurs where the carrying value exceeds the present value of future cash flows expected to arise from the continuing use of the asset and its net realisable value on eventual disposal. Any loss on account of impairment is expensed as the excess of the carrying amount over the higher of the asset's net realisable value or present value as determined.

Reversal of impairment losses recognized in prior years is recorded when there is an indication that the impairment losses recognized for the asset no longer exist or have decreased.

F Investments:

Investments, which are readily realizable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as long-term investments.

On initial recognition, all investments are measured at cost. The cost comprises purchase price and directly attributable acquisition charges such as brokerage, fees and duties.

Current investments are carried in financial statements at lower of cost and fair value determined on an individual investment basis. Long-term investments are carried at cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of the investments.

On disposal of an investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the statement of profit and loss.

G Inventories:

Stores and Spare Parts are valued at first-in first-out cost or Net Realisable Value whichever is lower.

Raw materials are valued at first-in first-out cost or Net Realisable Value whichever is lower. The cost includes purchase price as well as incidental expenses.

Process Stock is valued at cost or Net realisable value whichever is lower. Cost comprises all costs of purchase, cost of conversion and other costs incurred in bringing the inventory to the present location and condition.

The finished goods inventory (Containers, Can making machinery, Ice cream cones) is valued at cost or net realisable value whichever is lower. Cost comprises all costs of purchase, cost of conversion and other costs incurred in bringing the inventory to the present location and condition.

H Foreign Currency Transactions:

Initial recognition:

Foreign currency transactions are recorded in the reporting currency by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of transaction.

Conversion:

Foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of transaction and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.

Exchange Differences:

Exchange differences arising on the settlement / conversion of monetary items are recognised as income or expense in the year in which it arises.

The premium or discount arising at the inception of forward exchange contracts is amortised as expenses or income over the life of the respective contracts. Exchange differences on such contracts are recognised in the statement of profit and loss in the year in which the exchange rates change. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognised as income or expense for the year.

I Leases:

Lease transactions entered into prior to 1st April, 2001 :

Lease rentals in respect of assets acquired under lease are charged to Statement of Profit & Loss.

Lease transactions entered into on or after 1st April, 2001 :

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

Assets acquired on leases where a significant portion of the risks and rewards incidental to ownership is retained by the lessor are classified as operating lease. Lease rentals under operating leases are recognized in the Statement of Profit and Loss on a straight line basis.

J Revenue Recognition:

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

Domestic sales of goods are recognized on dispatch of products. Export sales are accounted on the basis of date of bill of lading. Sales are recognized net of value added tax (VAT) collected on behalf of government. Excise duty recovered, which is part of "Revenue from Operations (Gross)", is excluded to arrive at "Revenue from Operations (Net)".

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

Revenue in respect of insurance / other claims, dividend etc. is recognised only when it is reasonably certain that the ultimate collection will be made.

K Employee Benefits:

Short-term employees benefits are recognized as an expense at the undiscounted amount in statement of profit and loss of the year in which the related service is rendered.

Post employment and other long term benefits

The Company contributes to Government provident fund as required by statute, which is a defined contribution plan. There are no other obligations other than the contribution payable. The same is charged to statement of profit and loss.

Superannuation Scheme is a defined contribution scheme and the contribution is charged to the Statement of Profit and Loss of the year when the contribution to the fund is due. There are no other obligations other than the contribution payable.

Gratuity liability is a defined benefit obligation and is provided for on the basis of an actuarial valuation on projected unit credit method. Actuarial gains/losses are immediately taken to statement of profit and loss.

Long term compensated absences are provided for based on actuarial valuation on projected unit credit method. Actuarial gains/losses are immediately taken to statement of profit and loss.

L Export Benefits / Incentives:

Export Benefits / Incentives in respect of import duty benefits under DEEC scheme are accounted on accrual basis on the basis of exports made under DEEC scheme.

M Borrowing Cost:

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective asset. All other borrowing costs are expensed in the period they occur.

N Segment Accounting Policies:

Segment assets and liabilities:

All Segment assets and liabilities are directly attributable to the segment. Segment assets include all operating assets used by the segment and mainly consist of fixed assets, inventories, trade receivables, loans and advances and operating cash & cash equivalents. Segment assets and liabilities do not include inter-corporate deposits, share capital, reserves and surplus, borrowings and taxes.

Segment revenue and expenses:

Segment revenue and expenses are directly attributable to respective segment. It does not include interest income / expenses on inter-corporate deposits and borrowings, general administrative expenses, other expenses that arise at the enterprise level and relate to the enterprise as a whole and Income tax.

O Grants and Subsidy

Grants/Subsidies, if received for non specific capital assets are treated as Capital Reserve.

P Taxation:

Income Tax comprises both current and deferred tax. Provision for current tax is made on the basis of estimated taxable income and tax credits computed in accordance with the provisions of the Income Tax Act, 1961.

Deferred tax resulting from "timing differences" between taxable and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date. The deferred tax asset is recognized and carried forward only to the extent that there is a reasonable/ virtual certainty that the asset will be realised in future.

Tax on distributed profits is provided in accordance with the provisions of section 115-O of the Income Tax Act, 1961 is not considered in determination of the profits for the year.

Minimum Alternate Tax (MAT) under the provisions of the Income Tax Act, 1961 is recognized as current tax. The credit available under the said act in respect of MAT is recognized as an asset only when there is certainty that the company will pay income tax in future periods and MAT credit can be carried forward to sef-off against the normal tax liability. MAT credit recognized as an asset is reviewed at each Balance sheet date and written down to the extent the aforesaid certainty no longer exists.

Q Derivative financial instruments (Currency Future Contracts)

Currency futures contract are entered into to hedge the foreign currency risk of firm commitments or highly probable forecast transactions. The mark to market gains / (losses) in respect of all outstanding currency future contracts as at the Balance Sheet are recognised in the statement of Profit and Loss in pursuance of the announcements of the ICAI dated March 29, 2008.

R Earning Per Share (EPS)

The basic EPS is computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity shares outstanding during the year.

Diluted EPS is computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity and dilutive equity equivalent shares outstanding during the year.

S Provisions, Contingent Liabilities and Contingent Assets:

A provision is recognized when the enterprise has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to their present values and are determined based on management estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current management estimates.

Contingent Liabilities are disclosed in respect of possible obligations that arise from past events but their existence is confirmed by the occurrence or non occurrence of one or more uncertain future events not wholly within the control of the Company.

3 (i) Nil Of the above Nil (Previous Year Nil ) shares have been issued for consideration other than cash in five years immediately preceeding the current financial year.

Nil

3 (ii) Equity Shares: The Company has issued only one class of equity shares having a par value of Rs.10 per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company, after distribution of all preferential amounts, in proportion to their shareholding.

# During the year Term Loan from Canara Bank amounting to Rs.2,25,00,000/- , (Previous year Rs. Nil ) was taken. The same was Repayable in 30 monthly instalments of Rs. 7.50 lacs each starting from Oct. 2014 and ending on March 2017. Rate of interest - Base rate plus 3.50% i.e. 13.70% p.a. (Previous year Nil ). After repayment of 4 installments i.e. from Oct- 14 to Jan-15 i.e. Rs. 30,00,000/- , the balance loan of Rs. 195.00 lacs was taken over by Kotak Mahindra Bank Ltd. and Year end balance of such loan is Rs. Nil.

* Deposit includes deposit received from Directors amounting to Rs. Nil /-, ( Previous Year Rs.18,35,000/) and from Shareholders Rs. 61,60,000/-, (Previous Year Rs. 31,25,000/-). Fixed Deposits having maturity of two years amounting to Rs. 83,55,000/-, (Previous year Rs. 27,50,000/-) and three years amounting to Rs. 61,35,000/- (Previous year Rs. 5,32,40,000/-). The new deposits were accepted only from Shareholders amounting to Rs. 61,35,000/- , (Previous year from Public / Shareholders Rs. 2,46,85,000/-).

8 (i) Cash Credit from Bank of Baroda Rs. 10,04,91,914/-, (Previous year Rs 10,93,27,191/-) are Secured by Hypothecation of Stocks of raw material, Work-in-Progress, Finished Goods, Book Debts, Stores & Spares and Movable Machinery at Kanjari and Anand. The cash credit accounts are further secured by the first charge by way of equitable mortgage on the Company's factory land and building of Metal Can Division situated at village Kanjari & Office premises situated at Anand, in the state of Gujarat.

Applicable Rate of Interest is 13.00% p.a., (Previous Year 15.25% p.a.).

(ii) Overdraft facility from Kotak Mahindra Bank Rs. 2,28,53,091/-, (Previous year Rs. Nil ) are Secured by Hypothecation of existing and future tangible and current assets & movable fixed assets of Ice Cream Cone Division. The Overdraft facility is further secured by the equitable mortgage over factory / land and building situated at GIDC, Vitthal Udhyog nagar, Karamsad, Anand, in the state of Gujarat.

# There are no amounts due for payment to the Investor Education and Protection Fund under Section 125 of the Companies Act, 2013 as at the year end.

* Other payables include Statutory dues, Employees contribution, Outstanding liabilities for expenses, Bonus payable, Salaries payable, Employee welfare expenses payable etc.

NOTES:

(i) Buildings include Rs. 42,02,801/- (as at 31-03-2011 Rs. 44,42,894/-) being the cost of ownership flats in a Co-operative Society.

(ii) Impairment provision included in accumulated depreciation Rs. Nil /- (As at 31-03-2014 Rs. 8,00,000/-).

(iii) Deductions include Reversal of impairment provision for Previous year Rs. 32,13,735/- which was done as the company has sold off the Plant & Machineries and other assets of MMPD division for which the impairment provision was created. For current year Rs. 8,00,000/- has been reversed as the same is no longer required. (Refer Note 20 and 33).

(iv) Consequent to Schedule II to the Companies Act, 2013 becoming applicable w.e.f. April 01, 2014, Depreciation of Rs. 8,39,579/- (net of deferred tax of Rs. 4,03,229/- ) on account of assets whose useful life is already exhausted as on 1st April, 2014 have been adjusted to General Reserve. (Refer Note 4.1 and 6.1).

(v) The Company revised the depreciation rate on certain fixed assets as per usefull life specified in Schedule II of Companies Act, 2013 on account of which depreciation for the year is higher by Rs. 82,46,498/-.

23 (i) As per Accounting Standard 15 "Employee Benefits", the disclosures as defined in the Accounting Standard are given below: Gratuity :

The employees' gratuity fund scheme managed by Trust is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit seprately to build up the final obligation.

The Expected rate of return on plan assets is determined considering several applicable factors, mainly the composition of plan assets held, assessed risks, historical results of return on plan assets and the Company's policy for plan assets management.

The estimates of rate of escalation in salary considered in acturial valuation, take in account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market.

The above information is certified by the actuary and relied upon by the auditors.

Provident Fund:

In addition to the above, in accordance with indian regulations, employees of the Company are entitled to receive benefits under the provident fund, a defined contribution plan, in which, both the employee and the company contribute monthly at a determined rate. These contributions are made to the Government Provident Fund.


Mar 31, 2014

A Basis of Accounting:

These financial statements have been prepared in accordance with the generally accepted accounting principles in India under the historical cost convention on accrual basis. These financial standards have been prepared to comply in all material aspects with the accounting standards notifed under section 211 (3C) and the other relevant provisions of the Companies Act, 1956 read with the general circular 15/2013 dated 13th September, 2013 of the MInistry of the Corporate Affairs in respect of section 133 of the Companies Act, 2013 and other relevant provisions of the Companies Act, 1956.

B Use of Estimates:

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

C Fixed Assets:

(i) Tangible Fixed Asset:

Fixed Assets are recorded at cost of acquisition or construction net of recoverable taxes. The cost includes fnancing cost up to the date when such assets are ready for their intended use. They are stated at cost less accumulated depreciation and impairment loss, if any.

(ii) Intangible Assets:

Intangible Assets are stated at cost of acquisition net of recoverable taxes less accumulated amortization / depletion.

D Depreciation and Amortisation:

Depreciation has been calculated on straight line basis in accordance with the provisions of Section 205(2) (b) of the Companies Act, 1956 at the rates and in the manner specified in Schedule XIV to the said Act. Cost of Leasehold Land is amortised over the lease period. Intangible Assets (Computer Software) is being amortised over a period of five years on Straight Line Method.

Assets costing less than Rs. 5,000/- are fully depreciated in the year of acquisition.

E Impairment of Assets:

Management evaluates at regular intervals, using external and internal sources whether there is any impairment of any asset. Impairment occurs where the carrying value exceeds the present value of future cash flows expected to arise from the continuing use of the asset and its net realisable value on eventual disposal. Any loss on account of impairment is expensed as the excess of the carrying amount over the higher of the asset''s net realisable value or present value as determined.

Reversal of impairment losses recognized in prior years is recorded when there is an indication that the impairment losses recognized for the asset no longer exist or have decreased.

F Investments:

Investments, which are readily realizable and intended to be held for not more than one year from the date on which such investments are made, are classifed as current investments. All other investments are classifed as long-term investments.

On initial recognition, all investments are measured at cost. The cost comprises purchase price and directly attributable acquisition charges such as brokerage, fees and duties.

Current investments are carried in financial statements at lower of cost and fair value determined on an individual investment basis. Long-term investments are carried at cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of the investments.

On disposal of an investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the statement of profit and loss.

G Inventories:

Stores and Spare Parts are valued at frst-in frst-out cost or Net Realisable Value whichever is lower.

Raw materials are valued at frst-in frst-out cost or Net Realisable Value whichever is lower. The cost includes purchase price as well as incidental expenses.

Process Stock is valued at cost or Net realisable value whichever is lower. Cost comprises all costs of purchase, cost of conversion and other costs incurred in bringing the inventory to the present location and condition.

The fnished goods inventory (Containers, Can making machinery, Ice cream cones) is valued at cost or net realisable value whichever is lower. Cost comprises all costs of purchase, cost of conversion and other costs incurred in bringing the inventory to the present location and condition.

H Foreign Currency Transactions:

Initial recognition:

Foreign currency transactions are recorded in the reporting currency by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of transaction.

Conversion:

Foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of transaction and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.

Exchange Differences:

Exchange differences arising on the settlement / conversion of monetary items are recognised as income or expense in the year in which it arises.

The premium or discount arising at the inception of forward exchange contracts is amortised as expenses or income over the life of the respective contracts. Exchange differences on such contracts are recognised in the statement of profit and loss in the year in which the exchange rates change. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognised as income or expense for the year.

I Leases:

Lease transactions entered into prior to 1st April, 2001 :

Lease rentals in respect of assets acquired under lease are charged to Statement of profit & Loss.

Lease transactions entered into on or after 1st April, 2001 :

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

Assets acquired on leases where a significant portion of the risks and rewards incidental to ownership is retained by the lessor are classified as operating lease. Lease rentals under operating leases are recognized in the Statement of profit and Loss on a straight line basis.

J Revenue Recognition:

Revenue is recognised to the extent that it is probable that the economic benefits will fow to the company and the revenue can be reliably measured.

Domestic sales of goods are recognized on dispatch of products. Export sales are accounted on the basis of date of bill of lading. Sales are recognized net of value added tax (VAT) collected on behalf of government. Excise duty recovered, which is part of "Revenue from Operations (Gross)", is excluded to arrive at "Revenue from Operations (Net)".

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

Revenue in respect of insurance / other claims, dividend etc. is recognised only when it is reasonably certain that the ultimate collection will be made.

K Employee benefits:

Short-term employees benefits are recognized as an expense at the undiscounted amount in statement of profit and loss of the year in which the related service is rendered.

Post employment and other long term benefits

The Company contributes to Government provident fund as required by statute, which is a defined contribution plan. There are no other obligations other than the contribution payable. The same is charged to statement of profit and loss.

Superannuation Scheme is a Defined contribution scheme and the contribution is charged to the Statement of profit and Loss of the year when the contribution to the fund is due. There are no other obligations other than the contribution payable.

Gratuity liability is a Defined benefit obligation and is provided for on the basis of an actuarial valuation on projected unit credit method. Actuarial gains/losses are immediately taken to statement of profit and loss.

Long term compensated absences are provided for based on actuarial valuation on projected unit credit method. Actuarial gains/losses are immediately taken to statement of profit and loss.

L Export benefits / Incentives:

Export Benefits / Incentives in respect of import duty benefits under DEEC scheme are accounted on accrual basis on the basis of exports made under DEEC scheme.

M Borrowing Cost:

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective asset. All other borrowing costs are expensed in the period they occur.

N Segment Accounting Policies:

Segment assets and liabilities:

All Segment assets and liabilities are directly attributable to the segment. Segment assets include all operating assets used by the segment and mainly consist of fixed assets, inventories, trade receivables, loans and advances and operating cash & cash equivalents. Segment assets and liabilities do not include inter-corporate deposits, share capital, reserves and surplus, borrowings and taxes.

Segment revenue and expenses:

Segment revenue and expenses are directly attributable to respective segment. It does not include interest income / expenses on inter-corporate deposits and borrowings, general administrative expenses, other expenses that arise at the enterprise level and relate to the enterprise as a whole and Income tax.

O Grants and Subsidy:

Grants/Subsidies, if received for non Specific capital assets are treated as Capital Reserve.

P Taxation:

Income Tax comprises both current and deferred tax. Provision for current tax is made on the basis of estimated taxable income and tax credits computed in accordance with the provisions of the Income Tax Act, 1961.

Deferred tax resulting from "timing differences" between taxable and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date. The deferred tax asset is recognized and carried forward only to the extent that there is a reasonable/ virtual certainty that the asset will be realised in future.

Tax on distributed profits is provided in accordance with the provisions of section 115-O of the Income Tax Act, 1961 is not considered in determination of the profits for the year.

Q Derivative financial instruments (Currency Future Contracts):

Currency futures contract are entered into to hedge the foreign currency risk of firm commitments or highly probable forecast transactions. The mark to market gains / (losses) in respect of all outstanding currency future contracts as at the Balance Sheet are recognised in the statement of profit and Loss in pursuance of the announcements of the ICAI dated March 29, 2008.

R Earning Per Share (EPS):

The basic EPS is computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity shares outstanding during the year.

Diluted EPS is computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity and dilutive equity equivalent shares outstanding during the year.

S Provisions, Contingent Liabilities and Contingent Assets:

A provision is recognized when the enterprise has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to their present values and are determined based on management estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to refect the current management estimates.

Contingent Liabilities are disclosed in respect of possible obligations that arise from past events but their existence is confirmed by the occurrence or non occurrence of one or more uncertain future events not wholly within the control of the Company.


Mar 31, 2013

A Basis of Accounting:

These financial statements have been prepared in accordance with the generally accepted accounting principles in India under the historical cost convention on accrual basis. These financial standards have been prepared to comply in all material aspects with the accounting standards notified under section 211 (3C) and the other relevant provisions of the Companies Act, 1956.

B Use of Estimates:

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

C Fixed Assets:

(i) Tangible Fixed Asset:

Fixed Assets are recorded at cost of acquisition or construction net of recoverable taxes. The cost includes financing cost up to the date when such assets are ready for their intended use. They are stated at cost less accumulated depreciation and impairment loss, if any. Fixed Assets acquired on lease basis from Leasing Companies prior to 1st April, 2001 are not included in the Schedule of Fixed Assets. Lease Rentals paid in respect thereof are charged to Profit and Loss Account.

(ii) Intangible Assets:

Intangible Assets are stated at cost of acquisition net of recoverable taxes less accumulated amortization / depletion.

D Depreciation and Amortisation:

Depreciation has been calculated on straight line basis in accordance with the provisions of Section 205(2)

(b) of the Companies Act, 1956 at the rates and in the manner specified in Schedule XIV to the said Act. Cost of Leasehold Land is amortised over the lease period. Intangible Assets (Computer Software) is being amortised over a period of five years on Straight Line Method.

Assets costing less than Rs. 5,000/- are fully depreciated in the year of acquisition.

E Impairment of Assets:

Management evaluates at regular intervals, using external and internal sources whether there is any impairment of any asset. Impairment occurs where the carrying value exceeds the present value of future cash flows expected to arise from the continuing use of the asset and its net realisable value on eventual disposal. Any loss on account of impairment is expensed as the excess of the carrying amount over the higher of the asset''s net realisable value or present value as determined.

Reversal of impairment losses recognized in prior years is recorded when there is an indication that the impairment losses recognized for the asset no longer exist or have decreased.

F Investments:

Investments, which are readily realizable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as long-term investments.

On initial recognition, all investments are measured at cost. The cost comprises purchase price and directly attributable acquisition charges such as brokerage, fees and duties.

Current investments are carried in financial statements at lower of cost and fair value determined on an individual investment basis. Long-term investments are carried at cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of the investments.

On disposal of an investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the statement of profit and loss.

G Inventories:

Stores and Spare Parts are valued at first-in first-out cost or Net Realisable Value whichever is lower.

Raw materials are valued at first-in first-out cost or Net Realisable Value whichever is lower. The cost includes purchase price as well as incidental expenses.

Process Stock is valued at cost or Net realisable value whichever is lower. Cost is arrived at on the basis of absorption costing.

Finished Goods manufactured (Containers, Can making machinery, Ice cream cones) are valued at absorption cost or net realisable value whichever is lower.

H Foreign Currency Transactions:

Initial recognition:

Foreign currency transactions are recorded in the reporting currency by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of transaction.

Conversion:

Foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of transaction and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.

Exchange Differences:

Exchange differences arising on the settlement / conversion of monetary items are recognised as income or expense in the year in which it arises.

The premium or discount arising at the inception of forward exchange contracts is amortised as expenses or income over the life of the respective contracts. Exchange differences on such contracts are recognised in the statement of profit and loss in the year in which the exchange rates change. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognised as income or expense for the year.

I Leases:

Lease transactions entered into prior to 1st April, 2001 :

Lease rentals in respect of assets acquired under lease are charged to Profit & Loss Account.

Lease transactions entered into on or after 1st April, 2001 :

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

Assets acquired on leases where a significant portion of the risks and rewards incidental to ownership is retained by the lessor are classified as operating lease. Lease rentals under operating leases are recognized in the Profit and Loss account on a straight line basis.

J Revenue Recognition:

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

Domestic sales of goods are recognized on dispatch of products. Export sales are accounted on the basis of date of bill of lading. Sales are recognized net of value added tax (VAT) collected on behalf of government. Excise duty recovered, which is part of "Revenue from Operations (Gross)", is excluded to arrive at "Revenue from Operations (Net)".

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

Revenue in respect of insurance / other claims, dividend etc. is recognised only when it is reasonably certain that the ultimate collection will be made.

K Employee Benefits:

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

Post employment and other long term benefits

The Company contributes to Government provident fund as required by statute, which is a defined contribution plan. There are no other obligations other than the contribution payable. The same is charged to Profit and Loss account.

Superannuation Scheme is a defined contribution scheme and the contribution is charged to the Profit and Loss Account of the year when the contribution to the fund is due. There are no other obligations other than the contribution payable.

Gratuity liability is a defined benefit obligation and is provided for on the basis of an actuarial valuation on projected unit credit method. Actuarial gains/losses are immediately taken to profit and loss account.

Long term compensated absences are provided for based on actuarial valuation on projected unit credit method. Actuarial gains/losses are immediately taken to profit and loss account.

L Export Benefits / Incentives:

Export Benefits / Incentives in respect of import duty benefits under DEEC scheme are accounted on accrual basis on the basis of exports made under DEEC scheme.

M Borrowing Cost:

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective asset. All other borrowing costs are expensed in the period they occur.

N Segment Accounting Policies:

Segment assets and liabilities:

All Segment assets and liabilities are directly attributable to the segment. Segment assets include all operating assets used by the segment and mainly consist of fixed assets, inventories, trade receivables, loans and advances and operating cash & cash equivalents. Segment assets and liabilities do not include inter-corporate deposits, share capital, reserves and surplus, borrowings and taxes.

Segment revenue and expenses:

Segment revenue and expenses are directly attributable to respective segment. It does not include interest income / expenses on inter-corporate deposits and borrowings, general administrative expenses, other expenses that arise at the enterprise level and relate to the enterprise as a whole and Income tax.

O Taxation:

Income Tax comprises both current and deferred tax. Provision for current tax is made on the basis of estimated taxable income and tax credits computed in accordance with the provisions of the Income Tax Act, 1961.

Deferred tax resulting from "timing differences" between taxable and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date. The deferred tax asset is recognized and carried forward only to the extent that there is a reasonable/ virtual certainty that the asset will be realised in future.

Tax on distributed profits is provided in accordance with the provisions of section 115-O of the Income Tax Act, 1961 is not considered in determination of the profits for the year.

P Provisions, Contingent Liabilities and Contingent Assets:

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognised but are disclosed in the notes. Contingent Assets are neither recognised nor disclosed in the financial statements.


Mar 31, 2012

A Basis of Accounting:

These financial statements have been prepared in accordance with the generally accepted accounting principles in India under the historical cost convention on accrual basis. These financial standards have been prepared to comply in all material aspects with the accounting standards notifies under section 211 (3C) and the other relevant provisions of the Companies Act, 1956.

B Use of Estimates:

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

C Fixed Assets:

C (i) Tangible Fixed Asset:

Fixed Assets are recorded at cost of acquisition or construction net of recoverable taxes. The cost includes financing cost up to the date when such assets are ready for their intended use. They are stated at cost less accumulated depreciation and impairment loss, if any. Fixed Assets acquired on lease basis from Leasing Companies prior to 1st April, 2001 are not included in the Schedule of Fixed Assets. Lease Rentals paid in respect thereof are charged to Profit and Loss Account.

C (ii) Intangible Assets:

Intangible Assets are stated at cost of acquisition net of recoverable taxes less accumulated amortization / depletion.

D Depreciation and Amortisation:

Depreciation has been calculated on straight line basis in accordance with the provisions of Section 205(2)

(b) of the Companies Act, 1956 at the rates and in the manner specified in Schedule XIV to the said Act. Cost of Leasehold Land is amortised over the lease period. Intangible Assets (Computer Software) is being amortised over a period of five years on Straight Line Method.

Assets costing less than Rs. 5,000/- are fully depreciated in the year of acquisition.

E Impairment of Assets:

Management evaluates at regular intervals, using external and internal sources whether there is any impairment of any asset. Impairment occurs where the carrying value exceeds the present value of future cash flows expected to arise from the continuing use of the asset and its net realisable value on eventual disposal. Any loss on account of impairment is expensed as the excess of the carrying amount over the higher of the asset's net realisable value or present value as determined.

Reversal of impairment losses recognized in prior years is recorded when there is an indication that the impairment losses recognized for the asset no longer exist or have decreased.

F Investments:

Investments, which are readily realizable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as long-term investments.

On initial recognition, all investments are measured at cost. The cost comprises purchase price and directly attributable acquisition charges such as brokerage, fees and duties.

Current investments are carried in financial statements at lower of cost and fair value determined on an individual investment basis. Long-term investments are carried at cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of the investments.

On disposal of an investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the statement of profit and loss.

G Inventories:

G (i) Stores and Spare Parts are valued at first-in first-out cost or Net Realisable Value whichever is lower.

G (ii) Raw materials are valued at first-in first-out cost or Net Realisable Value whichever is lower. The cost includes purchase price as well as incidental expenses.

G (iii) Process Stock is valued at cost or Net realisable value whichever is lower. Cost is arrived at on the basis of absorption costing.

G (iv) Finished Goods manufactured (Containers, Can making machinery, Ice cream cones) are valued at absorption cost or net realisable value whichever is lower.

H Foreign Currency Transactions:

H (i) Initial recognition:

Foreign currency transactions are recorded in the reporting currency by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of transaction.

H (ii) Conversion:

Foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of transaction and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.

H (iii) Exchange Differences:

Exchange differences arising on the settlement / conversion of monetary items are recognised as income or expense in the year in which it arises.

The premium or discount arising at the inception of forward exchange contracts is amortised as expenses or income over the life of the respective contracts. Exchange differences on such contracts are recognised in the statement of profit and loss in the year in which the exchange rates change. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognised as income or expense for the year.

I Leases:

I (i) Lease transactions entered into prior to 1st April, 2001 :

Lease rentals in respect of assets acquired under lease are charged to Profit & Loss Account.

I (ii) Lease transactions entered into on or after 1st April, 2001 :

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

Assets acquired on leases where a significant portion of the risks and rewards incidental to ownership is retained by the lessor are classified as operating lease. Lease rentals under operating leases are recognized in the Profit and Loss account on a straight line basis.

J Revenue Recognition:

J (i) Revenue is recognised to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured.

J (ii)Domestic sales of goods are recognized on dispatch of products. Export sales are accounted on the basis of date of bill of lading. Sales are recognized net of value added tax (VAT) collected on behalf of government. Excise duty recovered, which is part of "Revenue from Operations (Gross)", is excluded to arrive at "Revenue from Operations (Net)".

Interest income is recognized on time proportion basis taking into account the amount outstanding and rate applicable. Revenue in respect of insurance / other claims, dividend etc. is recognised only when it is reasonably certain that the ultimate collection will be made.

K Employee Benefits:

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

Post employment and other long term benefits

The Company contributes to Government provident fund as required by statute, which is a defined contribution plan. There are no other obligations other than the contribution payable. The same is charged to Profit and Loss account. Superannuation Scheme is a defined contribution scheme and the contribution is charged to the Profit and Loss Account of the year when the contribution to the fund is due. There are no other obligations other than the contribution payable.

Gratuity liability is a defined benefit obligation and is provided for on the basis of an actuarial valuation on projected unit credit method. Actuarial gains/losses are immediately taken to profit and loss account.

Long term compensated absences are provided for based on actuarial valuation on projected unit credit method. Actuarial gains/losses are immediately taken to profit and loss account.

L Export Benefits / Incentives:

Export Benefits / Incentives in respect of import duty benefits under DEEC scheme are accounted on accrual basis on the basis of exports made under DEEC scheme.

M Borrowing Cost:

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective asset. All other borrowing costs are expensed in the period they occur.

N Segment Accounting Policies:

N (i) Segment assets and liabilities:

All Segment assets and liabilities are directly attributable to the segment. Segment assets include all operating assets used by the segment and mainly consist of fixed assets, inventories, sundry debtors, loans and advances and operating cash & bank balances. Segment assets and liabilities do not include inter-corporate deposits, share capital, reserves and surplus, borrowings and taxes.

N (ii) Segment revenue and expenses:

Segment revenue and expenses are directly attributable to respective segment. It does not include interest income / expenses on inter-corporate deposits and borrowings, general administrative expenses, other expenses that arise at the enterprise level and relate to the enterprise as a whole and Income tax.

O Taxation:

Income Tax comprises both current and deferred tax. Provision for current tax is made on the basis of estimated taxable income and tax credits computed in accordance with the provisions of the Income Tax Act, 1961. Deferred tax resulting from "timing differences" between taxable and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date. The deferred tax asset is recognized and carried forward only to the extent that there is a reasonable/ virtual certainty that the asset will be realised in future.

Tax on distributed profits is provided in accordance with the provisions of section 115-O of the Income Tax Act, 1961 is not considered in determination of the profits for the year.

P Provisions, Contingent Liabilities and Contingent Assets:

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognised but are disclosed in the notes. Contingent Assets are neither recognised nor disclosed in the financial statements.


Mar 31, 2010

(A) Basis of Accounting:

The accounts are prepared on accrual basis under the historical cost convention in accordance with generally accepted accounting principles [GAAP] and in compliance with the accounting standards referred to in Section 211 (3C) of the Companies Act, 1956 and other relevant provisions of the said Act.

(B) Use of Estimates:

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

(C) Fixed Assets:

(i) Fixed Assets are recorded at cost of acquisition or construction. They are stated at historical cost. Fixed Assets acquired on lease basis from Leasing Companies prior to 1st April, 2001 are not included in the Schedule of Fixed Assets. Lease Rentals paid in respect thereof are charged to Profit and Loss Account.

(ii) Management evaluates at regular intervals, using external and internal sources whether there is any impairment of any asset. Impairment occurs where the carrying value exceeds the present value of future cash flows expected to arise from the continuing use of the asset and its net realisable value on eventual disposal. Any loss on account of impairment is expensed as the excess of the carrying amount over the higher of the assets net realisable value or present value as determined.

Reversal of impairment losses recognized in prior years is recorded when there is an indication that the impairment losses recognized for the asset no longer exist or have decreased.

(iii) Depreciation:

Depreciation has been calculated on straight line basis in accordance with the provisions of Section 205(2)(b) of the Companies Act, 1956 at the rates and in the manner specified in Schedule XIV to the said Act. Cost of Leasehold Land is amortised over the lease period. Intangible Assets (Computer Software) is being amortised over a period of Five years on Straight Line Method. Assets costing less than Rs. 5,000/- are fully depreciated in the year of acquisition.

(iv) Intangible Assets:

Intangible Assets are stated at cost of acquisition.

(D) Investments:

Long Term Investments are shown at cost. Provision is made for any diminution, other than temporary, in the value of investments.

(E) Employee Benefits : Retirement and Gratuity benefits

The Company contributes to Government provident fund as required by statute, which is a defined contribution plan. The same is charged to Profit and Loss account.

Superannuation Scheme is a defined contribution scheme and the contribution is charged to the Profit and Loss Account of the year when the contribution to the fund is due.

There are no other obligations other than the contribution payable to the respective authorities.

Gratuity liability is a defined benefit obligation and is provided for on the basis of an actuarial valuation on projected unit credit method.

Long term compensated absences are provided for based on actuarial valuation made at the end of each financial year.

The actuarial valuation is done as per projected unit credit method.

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

(F) Valuation of Inventories :

(i) Stores and Spare Parts are valued at first-in first-out cost or Net Realisable Value whichever is lower.

(ii) Raw materials are valued at first-in first-out cost or Net Realisable Value whichever is lower. The cost includes purchase price as well as incidental expenses.

(iii) Process Stock is valued at cost or Net realisable value whichever is lower. Cost is arrived at on the basis of absorption costing. Finished Goods manufactured (Containers, Can making machinery, Ice cream cones) are valued at absorption cost or net realisable value whichever is lower.

(G) Foreign currency Transactions:

(a) Initial recognition:

Foreign currency transactions are recorded in the reporting currency by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of transaction.

(b) Conversion:

Foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of transaction; and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.

(c) Exchange Differences:

Exchange differences arising on the settlement/conversion of monetary items are recognised as income or expense in the year in which it arises.

The premium or discount arising at the inception of forward exchange contracts is amortised as expenses or income over the life of the respective contracts. Exchange differences on such contracts are recognised in the statement of profit and loss in the year in which the exchange rates change. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognised as income or expense for the year. (H) Export Benefits/ Incentives:

Export Benefits / Incentives in respect of import duty benefits under DEEC scheme are accounted on accrual basis on the basis of exports made under DEEC scheme.

(I) Revenue Recognition:

(i) Sales are accounted on despatch of products. Export sales are accounted on the basis of date of bill of lading.

(ii) Revenue in respect of Insurance/other claims, interest etc. is recognised only when it is reasonably certain that the ultimate collection will be made.

(J) Borrowing Cost:

Interest and other costs in connection with the borrowing of the funds to the extent related / attributed to the acquisition / construction of qualifying fixed assets are capitalised upto the date when such assets are ready for their intended use and other borrowing costs are charged to Profit & Loss Account. A qualifying asset is one that necessarily takes substantial period of time i.e. more than 12 months to get ready for intended use.

(K) Segment Accounting Policies:

(a) Segment assets and liabilities:

All Segment assets and liabilities are directly attributable to the segment. Segment assets include all operating assets used by the segment and consist principally of fixed Assets, inventories, sundry debtors, loans and advances and operating cash & bank balances. Segment assets and liabilities do not include inter-corporate deposits, share capital, reserves and surplus, borrowings and taxes.

(b) Segment revenue and expenses:

Segment revenue and expenses are directly attributable to respective segment. It does not include interest income / expenses on inter-corporate deposits and borrowings, general administrative expenses, other expenses that arise at the enterprise level and relate to the enterprise as a whole and Income tax.

(L) Taxation:

Income Taxes are accounted for in accordance with Accounting Standard (AS 22)- Accounting for Taxes on Income, notified in the Companies (Accounting Standard) Rules, 2006.

Income Tax comprises both current and deferred tax. Current tax is measured on the basis of estimated taxable income and tax credits computed in accordance with the provisions of the Income Tax Act, 1961.

Deferred tax resulting from "timing differences" between taxable and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date. The deferred tax asset is recognized and carried forward only to the extent that there is a reasonable/ virtual certainty that the asset will be realised in future.

Tax on distributed profits payable in accordance with the provisions of section 115-0 of the Income Tax Act, 1961 is in accordance with the Guidance Note on Accounting for Corporate Dividend Tax regarded as a tax on distribution of profits and is not considered in determination of the profits for the year.

(M) Leases

(a) Lease transactions entered into prior to 1st April, 2001 :

Lease rentals in respect of assets acquired under lease are charged to Profit & Loss Account.

(b) Lease transactions entered into on or after 1st April, 2001 :

i. Assets acquired under lease where the Company has substantially all the risks and rewards incidental to ownership are classified as finance leases. Such assets are capitalised at the inception of the lease at the lower of the fair value or the present value of minimum lease payments and a liability is created for an equivalent amount. Each lease rental paid is allocated between the liability and the interest cost, so as to obtain a constant periodic rate of interest on the outstanding liability for each period. ii. Assets acquired on leases where a significant portion of the risks and rewards incidental to ownership is retained by the lessor are classified as operating lease. Lease rentals under operating leases are recognized in the Profit and Loss account on a straight line basis.

(N) Provisions, Contingent Liabilities and Contingent Assets :

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognised but are disclosed in the notes. Contingent Assets are neither recognised nor disclosed in the financial statements.

 
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