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Accounting Policies of Oriental Hotels Ltd. Company

Mar 31, 2015

The Financial Statements have been prepared on the basis of historical cost convention on the basis of a going con- cern following the accrual system of accounting and comply with the applicable mandatory 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.

Use of Estimates:

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities as on the date of the financial statements and the reported amounts of revenues and expenses during the period reported. Although, these estimates are based upon management's knowledge of current events and actions, actual results could differ from those estimates and revisions, if any, are recognized in the current and future periods.

a) Revenue Recognition

Revenue comprises sale of rooms, food and beverages, allied services relating to hotel operations, including net income from telecommunication services and management and operating fees. Revenue is recognised upon rendering of the service.

b) Export Benefit Entitlement

Benefits arising in the nature of Duty Free Scrips are recognised upon the actual utilisation of Duty credit Scrips for the purchase of Fixed Assets and Inventories and are adjusted against the cost of the related assets.

c) Fixed Assets

Fixed Assets are stated at cost less accumulated depreciation/ amortisation. Costs include all expenses directly attributable to bring the assets to its present location and condition. None of the Assets were revalued during the course of the year.

d) Depreciation/Amortisation

Depreciable amount for assets is the cost of an asset, or other amount substituted for cost, less its estimated residual value.

Depreciation on tangible fixed assets has been provided on the straight-line method as per the useful life pre- scribed in Schedule II to the Companies Act, 2013 except in respect of the following categories of assets, in whose case the life of the assets has been re-assessed as under based on technical evaluation, taking into account the nature of the asset, the estimated usage of the asset, the operating conditions of the asset, past history of replace- ment, anticipated technological changes, manufacturers warranties and maintenance support, etc.

Asset description Useful life

Plant and machinery 10- 20 Years

Electrical installations and equipment 20 years

Hotel Wooden Furniture 15 years

EndUser devices-Computers,Laptops,etc 6 years

Asset costing less than Rs 5000 4 years

In respect of improvements to leasehold premises depreciation is provided at the rates arrived at based on the number of years of the total lease or at the rates arrived at based on useful life whichever is earlier.

Intangible assets - computer software including licenced software is being amortised over a period of 6 years.

e) Investments

Long Term Investments are carried at cost. Provision for decline in the value, other than temporary, has been made wherever necessary.

Current Investments are carried at lower of cost and market value / net asset value.

f) Inventories

Inventories are valued at cost on weighted average basis.

g) Transactions in Foreign Exchange

Foreign Currency transactions are recorded at the exchange rate prevailing on the date of the transactions. Monetary items denominated in foreign currency and outstanding at the Balance Sheet date are translated at the exchange rate prevailing on the date of balance sheet date. Exchange differences arising on settlement and conversion of foreign currency transactions are recognised as income or expense in the period in which they arise, except in cases where they relate to long term monetary items utilized for acquisition of qualifying assets.

Consequent to the notification No.F.No.17/133/2008 - CL V dated 29th December, 2011 revising Accounting Standard (AS) 11 "The Effects of Changes in Foreign Exchange Rates", the company has exercised the option in terms of paragraph 46A. Accordingly the exchange differences arising on settlement / translation of long term monetary items utilised for acquisition of depreciable fixed assets are adjusted to the carrying cost of fixed assets

Non-monetary items denominated in foreign currency are carried at the exchange rate in force at the date of the transaction.

h) Employee Benefits

In respect of defined contributions schemes, contributions to Provident Fund and Family Pension are charged to profit and loss account as incurred.

In respect of defined benefit schemes, the post - retirement benefits such as gratuity, leave encashment and other retirement benefits are accounted for based on valuations, as at the balance sheet date, made by an independent actuary. Gratuity in respect of certain employees is covered by Group Gratuity scheme with the Life Insurance Corporation of India and the balance employees contribution is made to a recognised fund and is managed by the TATA AIA Life Insurance.

In respect of other employee benefits, provision for such benefits are provided in terms of Accounting Standard - 15 (Revised) - "Employee Benefits".

i) Borrowing Cost

Borrowing costs incurred on acquiring qualifying assets (i.e. assets that necessarily take a substantial period of time to get ready for their intended use) are capitalised at the weighted average rate at which the funds have been borrowed for such acquisition. Other borrowing costs are recognised as an expense in the year in which they are incurred. Debenture issue costs and the premium on redemption of debentures are adjusted against the available Securities Premium Account in accordance with the provisions of Section 52 of the Companies Act 2013.All other borrowing costs are charged to Statement of Profit and Loss over the tenure of the borrowing

j) Taxes on Income :

Income Tax including minimum alternate tax is computed in accordance with Accounting Standard 22 (AS-22) 'Accounting for Taxes on Income'. Tax expenses are accrued in the same period as the revenue and expenses to which they relate.

Provision for current income tax is made on the tax liability payable on taxable income after considering tax al- lowances, deductions and exemptions determined in accordance with the prevailing tax laws. The differences between taxable income and the net profit /loss before tax for the year as per the financial statements are identi- fied and the tax effect of the deferred tax asset or deferred tax liability is recorded for timing differences , i.e. differences that originate in one accounting period and reversed in another. The tax effect is calculated on accu- mulated timing differences at the end of the accounting year based on applicable tax rates. Deferred tax assets/ liabilities are reviewed as at each Balance Sheet date.

Deferred tax assets, other than on unabsorbed depreciation and carried forward losses, are recognised only if there is reasonable certainty that they will be realised in future and are reviewed for the appropriateness of their respective carrying values at each balance sheet date. In situations, where the company has unabsorbed depre- ciation and carried forward losses, deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that the same can be realised against future taxable profits.

k) Impairment of Assets:

Impairment is ascertained at each balance sheet date in respect of the Company's fixed assets. An impairment loss is recognised whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value based on an appropriate discount factor.

l) Accounting for Provisions, Contingent Liabilities and Contingent Assets:

Provisions are recognised in terms of Accounting Standard 29 - 'Provisions, Contingent Liabilities and Contingent Assets', when there is a present legal or statutory obligation as a result of past events where it is probable that there will be outflow of resources to settle the obligation and when a reliable estimate of the amount of the obliga- tion can be made.

Contingent Liabilities are recognised only when there is a possible obligation arising from past events due to oc- currence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or where any present obligation cannot be made. Obligations are assessed on an ongoing basis and only those having a largely probable outflow of resources are provided for.

Contingent Assets are not recognised in the financial statements.

m) Assets taken on lease:

In respect of lease transactions, which are in nature of finance leases, Assets taken on lease after 1st April, 2001 are accounted as fixed assets at fair value in accordance with Accounting Standard 19 (AS-19) - "Leases". Lease payments are apportioned between finance charges and reduction of the lease liability based on the implicit rate of return.

Assets taken on lease/licence under which all the risks and rewards of ownership are effectively retained by the lessor are classified as operating lease. Lease payments under operating leases are recognised as expenses in accordance with the respective lease/licence agreements.

(a) The Company has one class of equity shares having a par value of Rs. 1/- share. Each shareholder is eligible for one vote per share held. The Board of Directors in their meeting on 15th May, 2015 proposed a dividend of Rs.0.40 per equity share, which is subject to approval of shareholders in the ensuing Annual General Meeting. In the event of liquidation, the equity shareholders are eligible to receive remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

(b) Reconciliation of Equity shares

iii) Includes Exchange Loss in currency swap of the term loan Rs.1,740.07 lakhs ( Previous Year Rs.2037.36 lakhs)

Footnote : Deferred tax asset on loss U/s 35AD of the Income Tax Act, 1961 has been recognised as equivalent deferred tax liability has been created on Depreciation on Fixed Assets.

(i) Secured loans from banks represents short term loan secured by way of mortgage by deposit of title deed in respect of immovable properties of Fisherman's Cove and Coonoor Hotel & additionally secured by way of exclusive first charge of credit card receivables of the Company.

(ii) Short term loan from related parties consisted of inter corporate deposits for a period of 90 days with an option of prepayment carrying interest @ 11%.

Footnote : Amounts due to Micro, Small and Medium Enterprises:

The amount due to Micro and Small Enterprises as defined in the "The Micro, Small and Medium Enterprises Development Act, 2006" has been determined to the extent of such parties have been identified on the basis of information available with the Company. No amount is outstanding over a period of 45 days.

(i) The amount reflects the position as on 31st March 2015, the actual amount to be transferred to the "Investor Education & Protection Fund" shall be determined and paid to the credit of the fund on due dates.

(ii) Includes Rs.90 lakhs due to Directors(Previous Year Rs.60 lakhs).

(i) The related party under Long Term Deposits placed for hotel properties represent enterprises influenced by relatives of key management personnel.

(ii) Advance Tax and Tax deducted at Source is net of Provision for Income tax amounting to Rs.16,833.79 lakhs (previous year Rs.16,833.79 lakhs).

(iii) Provision for income tax considered above is net of MAT credit utilised of Rs.114.79 lakhs (Previous year Rs.65.88 lakhs).

Footnote : The inventories have been classified as per the nomenclature used in the hotel industry.

Footnote : (i) Include amounts in unpaid dividend accounts Rs.74.52 lakhs (Previous year Rs.68.11 lakhs).

(i) Based on the orders of the Division Bench of the Hon'be High Court of Madras in an earlier year, the value of Freehold Land amounting to Rs.749.86 lakhs has been classified as recoverables. The Company has initiated appropriate legal action to recover the amount together with interest and obtained interim stay order to protect and secure the amount. The Company has received part amount under a compromise settlement. The company has already obtained the court order for recovery of the balance amount of Rs.374.25 lakhs.

(ii) The company entered into a long term agreement for development of hotel at Bannerghatta in Bengaluru in the year 2007. During the year 2013-14, the Company decided to terminate the lease agreement and recover the amount spent on the project along with the deposit made. As per the agreement the termination will take effect when the lessor fulfills the conditions laid in the termination agreement. In view of the above agreement an amount of Rs.777.65 lakhs lying in long term deposits placed for hotel properties and capital work in progress have been transferred to amounts recoverable.

Note : On account of foreclosure of loan the entire amount is amortised during the year. Note 21 : Rooms, restaurants, banquets and other income


Mar 31, 2013

A) Fixed Assets

Fixed Assets are carried at cost less depreciation.

b) Depreciation

Depreciation on Assets is provided on straight line basis at rates which are in conformity with the requirements of the Companies Act, 1956. Assets given to the employees under the Company''s white good scheme are depreciated as per the terms of the scheme. Buildings constructed and capital expenditure incurred on leasehold rights are depreciated at the rates arrived at based on the number of years of total lease or the rates applicable as per the Companies Act,1956 whichever is higher.

c) Investments

Long Term Investments are carried at cost. Provision for decline in the value, other than temporary, has been made wherever necessary.

Current Investments are carried at lower of cost and market value / net asset value.

d) Inventories

Inventories are valued at cost on weighted average basis.

e) Transactions in Foreign Exchange

Foreign Currency transactions are recorded at the exchange rate prevailing on the date of the transactions. Monetary items denominated in foreign currency and outstanding at the Balance Sheet date are translated at the exchange rate prevailing on the date of balance sheet. Exchange differences arising on settlement and conversion of foreign currency transactions are recognised as income or expense in the period in which they arise, except in cases where they relate to long term monetary items utilized for acquisition of qualifying assets.

Consequent to the notification No.F.No.17/133/2008 – CL V dated 29th December, 2011 revising Accounting Standard (AS) 11 “The Effects of Changes in Foreign Exchange Rates”, the Company has exercised the option in terms of paragraph 46A. Accordingly the exchange differences arising on settlement / translation of long term monetary items utilised for acquisition of depreciable fixed assets are adjusted to the carrying cost of fixed assets. Non-monetary items denominated in foreign currency are carried at the exchange rate in force at the date of the transaction.

f) Employee Benefits

In respect of defined contributions schemes, contributions to Provident Fund and Family Pension are charged to profit and loss account as incurred.

In respect of defined benefit schemes, the post - retirement benefits such as gratuity, leave encashment and other retirement benifits are accounted for based on valuations, as at the balance sheet date, made by an independent actuary. Gratuity in respect of certain employees is covered by Group Gratuity scheme with the Life Insurance Corporation of India and the balance employees contribution is made to a recognised fund and is managed by the Company.

In respect of other employee benefits, provision for such benefits are provided in terms of Accounting Standard - 15 (Revised) - "Employee Benefits".

g) Borrowing Cost:

Borrowing costs incurred on acquiring qualifying assets (i.e assets that necessarily take a substantial period of time to get ready for their intended use) are capitalised at the weighted average rate at which the funds have been borrowed for such acquisition. Other borrowing costs are recognised as an expense in the year in which they are incurred.

h) Taxes on Income :

Income Tax including minimum alternate tax is computed in accordance with Accounting Standard 22 (AS-22) ''Accounting for Taxes on Income'' . Tax expenses are accrued in the same period as the revenue and expenses to which they relate.

Provision for current income tax is made on the tax liability payable on taxable income after considering tax al- lowances, deductions and exemptions determined in accordance with the prevailing tax laws. The differences between taxable income and the net profit /loss before tax for the year as per the financial statements are identi- fied and the tax effect of the deferred tax asset or deferred tax liability is recorded for timing differences , i.e. differences that originate in one accounting period and reversed in another. The tax effect is calculated on accu- mulated timing differences at the end of the accounting year based on applicable tax rates. Deferred tax assets/ liabilities are reviewed as at each Balance Sheet date.

Deferred tax assets, other than on unabsorbed depreciation and carried forward losses, are recognised only if there is reasonable certainty that they will be realised in future and are reviewed for the appropriateness of their respective carrying values at each balance sheet date. In situations, where the Company has unabsorbed depreciation and carried forward losses, deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that the same can be realised against future taxable profits.

i) Impairment of Assets:

Impairment is ascertained at each Balance Sheet date in respect of the Company''s fixed assets. An impairment loss is recognised whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value based on an appropriate discount factor.

j) Accounting for Provisions, Contingent Liabilities and Contingent Assets:

Provisions are recognised in terms of Accounting Standard 29 - ''Provisions, Contingent Liabilities and Contingent Assets'', when there is a present legal or statutory obligation as a result of past events where it is probable that there will be outflow of resources to settle the obligation and when a reliable estimate of the amount of the obligation can be made.

Contingent Liabilities are recognised only when there is a possible obligation arising from past events due to occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or where any present obligation cannot be made. Obligations are assessed on an ongoing basis and only those having a largely probable outflow of resources are provided for.

Contingent Assets are not recognised in the financial statements.

k) Assets taken on lease:

In respect of lease transactions, which are in nature of finance leases, Assets taken on lease after 1st April, 2001 are accounted as fixed assets at fair value in accordance with Accounting Standard 19 (AS-19) - "Leases". Lease payments are apportioned between finance charges and reduction of the lease liability based on the implicit rate of return.

Assets taken on lease/licence under which all the risks and rewards of ownership are effectively retained by the lessor are classified as operating lease. Lease payments under operating leases are recognised as expenses in accordance with the respective lease/licence agreements.


Mar 31, 2012

A) Fixed Assets

Fixed Assets are carried at cost less depreciation.

b) Depreciation

Depreciation on Assets is provided on straight line basis at rates which are in conformity with the requirements of the Companies Act, 1956. Assets given to the employees under the company's white good scheme are depreciated as per the terms of the scheme. Buildings constructed and capital expenditure incurred on leasehold rights are depreciated at the rates arrived at based on the number of years of total lease or the rates applicable as per the Companies Act,1956 whichever is higher.

c) Investments

Long Term Investments are carried at cost. Provision for decline in the value, other than temporary, has been made wherever necessary.

Current Investments are carried at lower of cost and market value / net asset value.

d) Inventories

Inventories are valued at cost on weighted average basis.

e) Transactions in Foreign Exchange

Foreign Currency transactions are recorded at the exchange rate prevailing on the date of the transactions. Monetary items denominated in foreign currency and outstanding at the Balance Sheet date are translated at the exchange rate prevailing on the date of balance sheet date. Exchange differences arising on settlement and conversion of foreign currency transactions are recognized as income or expense in the period in which they arise, except in cases where they relate to long term monetary items utilized for acquisition of qualifying assets.

During the year, consequent to the notification No.F.No.17/133/2008 - CL V dated 29th December, 2011 revising Accounting Standard (AS) 11 "The Effects of Changes in Foreign Exchange Rates, the company has exercised the option in terms of paragraph 46A. Accordingly the exchange differences arising on settlement / translation of long term monetary items utilized for acquisition of fixed assets are adjusted to the carrying cost of fixed assets excluding the value of fluctuations to the extent considered as part of interest cost in accordance with Accounting Stadard-16 " Borrowing Costs.

Non-monetary items denominated in foreign currency are carried at the exchange rate in force at the date of the transaction.

f) Employee Benefits

In respect of defined contributions schemes, contributions to Provident Fund and Family Pension are charged to profit and loss account as incurred.

In respect of defined benefit schemes, the post - retirement benefits such as gratuity, leave encashment and other retirement benefits are accounted for based on valuations, as at the balance sheet date, made by an independent actuary. Gratuity in respect of certain employees is covered by Group Gratuity scheme with the Life Insurance Corporation of India and the balance employees contribution is made to a recognized fund and is managed by the company.

In respect of other employee benefits, provision for such benefits are provided in terms of Accounting Standard - 15 (Revised) - "Employee Benefits".

g) Borrowing Cost

Borrowing costs incurred on acquiring qualifying assets (i.e assets that necessarily take a substantial period of time to get ready for their intended use) are capitalized at the weighted average rate at which the funds have been borrowed for such acquisition. Other borrowing costs are recognized as an expense in the year in which they are incurred. Exchange differences arising from foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs.

h) Taxes on Income

Income Tax including minimum alternate tax is computed in accordance with Accounting Standard 22 (AS-22) 'Accounting for Taxes on Income'. Tax expenses are accrued in the same period as the revenue and expenses to which they relate.

Provision for current income tax is made on the tax liability payable on taxable income after considering tax allowances, deductions and exemptions determined in accordance with the prevailing tax laws. The differences between taxable income and the net profit /loss before tax for the year as per the financial statements are identified and the tax effect of the deferred tax asset or deferred tax liability is recorded for timing differences , i.e. differences that originate in one accounting period and reversed in another. The tax effect is calculated on accumulated timing differences at the end of the accounting year based on applicable tax rates. Deferred tax assets/ liabilities are reviewed as at each Balance Sheet date.

Deferred tax assets, other than on unabsorbed depreciation and carried forward losses, are recognized only if there is reasonable certainty that they will be realized in future and are reviewed for the appropriateness of their respective carrying values at each balance sheet date. In situations, where the company has unabsorbed depreciation and carried forward losses, deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that the same can be realized against future taxable profits.

i) Impairment of Assets

Impairment is ascertained at each balance sheet date in respect of the Company's fixed assets. An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value based on an appropriate discount factor.

j) Accounting for Provisions, Contingent Liabilities and Contingent Assets

Provisions are recognized in terms of Accounting Standard 29 - 'Provisions, Contingent Liabilities and Contingent Assets', when there is a present legal or statutory obligation as a result of past events where it is probable that there will be outflow of resources to settle the obligation and when a reliable estimate of the amount of the obligation can be made.

Contingent Liabilities are recognized only when there is a possible obligation arising from past events due to occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or where any present obligation cannot be made. Obligations are assessed on an ongoing basis and only those having a largely probable outflow of resources are provided for.

Contingent Assets are not recognized in the financial statements.

k) Assets taken on lease

In respect of lease transactions, which are in nature of finance leases, Assets taken on lease after 1st April, 2001 are accounted as fixed assets at fair value in accordance with Accounting Standard 19 (AS-19) - "Leases". Lease payments are apportioned between finance charges and reduction of the lease liability based on the implicit rate of return.

Assets taken on lease/license under which all the risks and rewards of ownership are effectively retained by the lessor are classified as operating lease. Lease payments under operating leases are recognized as expenses in accordance with the respective lease/license agreements.

(i) 10.40% Secured Non-convertible Redeemble Debentures Secured by Mortgage of Buildings and other fixed assets of Vivanta by Taj Surya, Coimbatore, and repayable in single installment on maturity , viz 10th January 2015.

(ii) Term Loan of Rs7,692.31 lakhs are secured by way of mortgage by deposit of title deeds in respect of immovable properties of Fisherman's Cove and Connor hotels & additionally secured by way of exclusive first charge of credit card receivables of the Company and repayable in 13 quarterly installments commencing, July 2011.

(iii) Term Loan of Rs7,000 lakhs are secured by way of mortgage by deposit of title deeds in respect of immovable properties of Fisherman's Cove and Connor hotels & additionally secured by way of exclusive first charge of credit card receivables of the Company and repayable in 19 quarterly installments commencing, April 2013.

(iv) Term Loan of Rs3,286 lakhs is secured by first paripassu mortgage by deposit of title deeds of Taj Coromandel hotel and repayable in 3 yearly installments commencing from June 2011.

(v) The Company has entered into currency swap transactions with a view to convert its rupee borrowing into foreign currency borrowing. Accordingly, the underlying borrowing are translated at the exchange rate prevailing at the Balance sheet date.

i) Amounts due to Micro, Small and Medium Enterprises:

The amount due to Micro and Small Enterprises as defined in the "The Micro, Small and Medium Enterprises Development Act, 2006" has been determined to the extent of such parties have been identified on the basis of information available with the Company. No amount is outstanding over a period of 30 days.

iii) Stated at the exchange rate prevailing on the date of Initial deposit of loan which was converted into Shares.

iv) In terms of Share Retention Agreement with International Finance Corporation (IFC) for the loans availed by TAL Hotel and Resorts Limited (THRL), transfer of shareholding in this company is restricted during the subsistence of the loan agreement of THRL.

v) In terms of an undertaking, transfer of this shareholding is restricted to Taj / TATA group Companies.

vi) Acquired during the year

vii) Equity Shares of Rs 10/- each have been reduced to Rs 1 /- each as confirmed by the order of the court and provision for diminution in value has been made in the earlier years.

viii) Redeemed during the year

Note:

i) The related party under Long Term Deposits placed for hotel properties represent enterprises influenced by relatives of key management personnel.

ii) The shareholders deposit represents advance for investments.

Note1: Based on the orders of the Division Bench of the Hon'ble High Court of Madras in an earlier year, the value of Freehold Land amounting to Rs 749.86 Lakhs has been classified as recoverable. The Company has initiated appropriate legal action to recover the amount together with interest and obtained interim stay order to protect and secure the amount. The Company has received part amount under a compromise settlement. The company has already obtained the court order for recovery of the balance amount of Rs 385.57 Lakhs


Mar 31, 2011

The financial statements are prepared under historical cost convention on accrual basis and comply with Accounting Standards (AS) referred to in Section 211(3C) of the Companies Act, 1956. The preparation of financial statements requires the management to make estimates and assumptions considered in the reported amounts of assests and liabilities(including contingent liabilities) as of the date of the financial statements and the reported income and expenses. The management believes that the estimates used in the preparation of the finanfial statements are prudent and reasonable. Future results could differ from the estimates. Significant accounting policies adopted in the presentation of the accounts are as under:

a) Fixed Assets

Fixed Assets are carried at cost less depreciation.

b) Depreciation

Depreciation on Assets is provided on straight line basis at rates which are in conformity with the requirements of the Companies Act, 1956. Assets given to the employees under the Companys white good scheme are depreciated as per the terms of the scheme. Buildings constructed and capital expenditure incurred on leasehold rights are depreciated at the rates arrived at based on the number of years of total lease or the rates applicable as per the Companies Act, 1956 whichever is higher.

c) Investments

Long Term Investments are carried at cost. Provision for decline in the value, other than temporary, has been made wherever necessary.

Current Investments are carried at lower of cost and market value / net asset value.

d) Inventories

Inventories are valued at cost on weighted average basis.

e) Transactions in Foreign Exchange

Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of the transactions. Monetary items denominated in foreign currency and outstanding at the Balance Sheet date are translated at the exchange rate ruling at the year end. Exchange differences arising on foreign currency transactions are recognised as income or expense in the period in which they arise.

Non-monetary items denominated in foreign currency are carried at the exchange rate in force at the date of the transaction.

f) Derivative Instuments

Exchange defference arising on repayment/revaluation of derivative contracts, entered in to in respect of some of the companys undelying borrowings, are recognised as income or expense, as the case may be, in the period in which arise. Interest rate derivatives are accounted based on the underlying benchmark for the relevant period.

g) Employee Benefits

In respect of defined contributions schemes, contributions to Provident Fund and Family Pension are charged to profit and loss account as incurred.

In respect of defined benefit schemes, the post - retirement benefits such as gratuity, leave encashment and other retirement benefits are accounted for based on valuations, as at the balance sheet date, made by an independent actuary.

Gratuity in respect of certain employees is covered by Group Gratuity scheme with the Life Insurance Corporation of India and the balance employees contribution is made to a recognised fund and is managed by the company.

In respect of other employee benefits, provision for such benefits are provided in terms of Accounting Standard - 15 (Revised) - "Employee Benefits".

h) Borrowing Cost

Borrowing costs incurred on acquiring qualifying assets (i.e. assets that necessarily take a substantial period of time to get ready for their intended use) are capitalised at the weighted average rate at which the funds have been borrowed for such acquisition.Other borrowing cost are recognised as an expense in the year in which they are incurred.

i) Taxes on Income :

Income Tax is computed in accordance with Accounting Standard 22 (AS-22) Accounting for Taxes on Income. Tax expenses are accrued in the same period as the revenue and expenses to which they relate.

Provision for current income tax is made on the tax liability payable on taxable income after considering tax allowances, deductions and exemptions determined in accordance with the prevailing tax laws. The differences between taxable income and the net profit /loss before tax for the year as per the financial statements are identified and the tax effect of the deferred tax asset or deferred tax liability is recorded for timing differences, i.e. differences that originate in one accounting period and reversed in another. The tax effect is calculated on accumulated timing differences at the end of the accounting year based on applicable tax rates. Deferred tax assets/ liabilities are reviewed as at each Balance Sheet date.

Deferred tax assets, other than on unabsorbed depreciation and carried forward losses, are recognised only if there is reasonable certainty that they will be realised in future and are reviewed for the appropriateness of their respective carrying values at each balance sheet date. In situations, where the company has unabsorbed depreciation and carried forward losses, deferrred tax assets are recognised only if there is virtual certainty supported by convincing evidence that the same can be realised against future taxable profits.

j) Impairment of Assets:

Impairment is ascertained at each balance sheet date in respect of the Companys fixed assets. An impairment loss is recognised whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value based on an appropriate discount factor.

k) Accounting for Provisions, Contingent Liabilities and Contingent Assets:

Provisions are recognised in terms of Accounting Standard 29 - Provisions, Contingent Liabilities and Contingent Assets, when there is a present legal or statutory obligation as a result of past events where it is probable that there will be outflow of resources to settle the obligation and when a reliable estimate of the amount of the obligation can be made. Contingent Liabilities are recognised only when there is a possible obligation arising from past events due to occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or where any present obligation cannot be made. Obligations are assessed on an ongoing basis and only those having a largely probable outflow of resources are provided for. Contingent Assets are not recognised in the financial statements.


Mar 31, 2010

1. ACCOUNTING POLICIES

The financial statements are prepared under historical cost convention on accrual basis and comply with Accounting Standards (AS) referred to in Section 211(3C) of the Companies Act, 1956. Significant accounting policies adopted in the presentation of the accounts are as under:

a) Fixed Assets

Fixed Assets are carried at cost less depreciation.

b) Depreciation

Depreciation on Assets is provided on straight line basis at rates which are in conformity with the requirements of the Companies Act, 1956. Assets given to the employees under the Companys white good scheme are depreciated as per the terms of the scheme. Buildings constructed and capital expenditure incurred on leasehold rights are depreciated at the rates arrived at based on the number of years of total lease or the rates applicable as per the Companies Act, 1956 whichever is higher.

c) Investments

Long Term Investments are carried at cost. Provision for decline in the value, other than temporary, has been made wherever necessary.

Current Investments are carried at lower of cost and market value / net asset value.

d) Inventories

Inventories are valued at cost on weighted average basis.

e) Transactions in Foreign Exchange

Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of the transactions. Monetary items denominated in foreign currency and outstanding at the Balance Sheet date are translated at the exchange rate ruling at the year end. Exchange differences arising on foreign currency transactions are recognised as income or expense in the period in which they arise. Non-monetary items denominated in foreign currency are carried at the exchange rate in force at the date of the transaction.

f) Employee Benefits

In respect of defined contribution schemes, contributions to Provident Fund and Family Pension are charged to profit and loss account as incurred.

In respect of defined benefit schemes, the post - retirement benefits such as gratuity, leave encashment and other retirement benefits are accounted for based on valuations, as at the balance sheet date, made by an independent actuary. Gratuity in respect of certain employees is covered by Group Gratuity scheme with the Life Insurance Corporation of India.

In respect of other employee benefits, provision for such benefits are provided in terms of Accounting Standard - 15

(Revised) - "Employee Benefits".

g) Borrowing Cost

Borrowing costs incurred on acquiring qualifying assets (i.e. assets that necessarily take a substantial period of time to get ready for their intended use) are capitalised at the weighted average rate at which the funds have been borrowed for such acquisition.Other borrowing cost are regognised as an expense in the year in which they are incurred.

h) Taxes on Income :

Income Tax is computed in accordance with Accounting Standard 22 (AS-22) Accounting for Taxes on Income. Tax expenses are accrued in the same period as the revenue and expenses to which they relate.

Provision for current income tax is made on the tax liability payable on taxable income after considering tax allowances, deductions and exemptions determined in accordance with the prevailing tax laws. The differences between taxable income and the net profit /loss before tax for the year as per the financial statements are identified and the tax effect of the deferred tax asset or deferred tax liability is recorded for timing differences, i.e. differences that originate in one accounting period and reversed in another. The tax effect is calculated on accumulated timing differences at the end of the accounting year based on applicable tax rates. Deferred tax assets/ liabilities are reviewed as at each Balance Sheet date. i) Impairment of Assets:

Impairment is ascertained at each balance sheet date in respect of the Companys fixed assets. An impairment loss is recognised whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value based on an appropriate discount factor.

j) Accounting for Provisions, Contingent Liabilities and Contingent Assets:

Provisions are recognised in terms of Accounting Standard 29 - Provisions, Contingent Liabilities and Contingent Assets when there is a present legal or statutory obligation as a result of past events where it is probable that there will be outflow of resources to settle the obligation and when a reliable estimate of the amount of the obligation can be made.

Contingent Liabilities are recognised only when there is a possible obligation arising from past events due to occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or where any present obligation cannot be made. Obligations are assessed on an ongoing basis and only those having a largely probable outflow of resources are provided for.

Contingent Assets are not recognised in the financial statements.

k) Assets taken on lease:

In respect of lease transactions, which are in nature of finance leases, Assets taken on lease after April, 2001 are accounted as fixed assets at fair value in accordance with Accounding Standard 19 (AS-19) - "Leases". Lease payments are apportioned between finance charges and reduction of the lease liability based on the implicit rate of return.

Assets taken on lease / licence under which all the risks and rewards of ownership are effectively retained by the lessor are classified as operating lease. Lease payments under operating leases are recognised as expenses in accordance with the respective lease / licence agreements.

 
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