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Accounting Policies of Standard Industries Ltd. Company

Mar 31, 2015

Corporate Information

standard Mills Company Limited was incorporated in the year 1892 under the Indian Companies act, 1882. In line with the diverse nature of its business, it had changed its name from standard Mills Company Limited to STANDARD INDUSTRIES LIMITED, ('the Company') in October 1989. The Company was engaged in the business of manufacturing textiles, chemicals and garments. With a change in focus, the Company further diversified into real estate business. Presently, the Company is in the business of real estate and Trading in Textiles and Chemicals.

Note 2:

(a) Basis of accounting and preparation of financial statements:

The financial statements of the Company have been prepared 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 2013 act")/Companies act, 1956 ("the 1956 act"), as applicable. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

(b) Use of Estimates:

The preparation of the financial statements, in conformity with the generally accepted accounting principles, requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting year. differences between actual results and estimates are recognized in the year in which the results are known/ materialized.

(c) Inventories:

Inventories (Traded Goods) are valued at lower of cost and net realizable value.

(d) cash and cash equivalents (for purposes of cash Flow Statement):

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

(e) cash flow statement:

Cash flows are reported using the indirect method, whereby Profit/(loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

(f) Property under Development:

Property under development represents leasehold land converted into stock-in-trade on the basis of lower of the cost and fair value as valued by external values on the date of conversion.

(g) Depreciation Policy:

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 prescribed in schedule II to the Companies act, 2013 except for Computers (deskstop, Laptops, etc,) has been assessed for 6 years based on technical assessment, taking into account the nature of the asset, the estimated usage of the asset, the operating conditions of the asset, past history of replacement, anticipated technological changes, manufacturers warranties and maintenance support, etc.

(h) Revenue Recognition:

revenue from sale of products is recognised net of returns and on transfer of significant risks and rewards of ownership to the buyer, which generally coincides with the delivery of goods. sales exclude sales tax and value added tax. Interest income is accounted on accrual basis. dividend income is accounted for when the right to receive the same is established. revenue (income) is recognized when no significant uncertainty as to determination/realization exists.

(i) Fixed Assets:

fixed assets are stated at cost of acquisition or construction and include amounts added on revaluation less accumulated depreciation and impairment loss.

fixed assets viz. land, buildings, plant and machinery as on December 31, 1984 had been revalued on the basis of their current replacement price as on December 31, 1985 and related factors. accordingly, they were stated at revalued cost

(j) Foreign currency Transactions:

Transactions in foreign currency are recorded at the original rates of exchange in force at the time the transactions are effected. at the year-end, monetary items denominated in foreign currency are reported using closing rates of exchange. exchange differences arising thereon and on realization/payment of foreign exchange are accounted, in the relevant year, as income or expense.

(k) Investments:

Current Investments are carried at lower of cost and fair value. Long-term (non-current) investments are carried at cost. however, when there is a decline, other than temporary, the carrying amount is reduced to recognize the decline.

(l) Employee Benefits:

(i) Contributions payable to the Company's Provident fund and superannuation fund, which is defined contribution scheme, are charged to revenue.

(ii) The Company's liability for Gratuity funds is defined benefit scheme, which is funded through Trust set-up by the Company. The difference between the actuarial valuation for Gratuity and the balance in the fund maintained by Trust as at the year-end is provided for in the accounts.

(iii) Liability in respect of compensated absences is charged on the basis of actuarial valuation as at the year-end.

(m) Segment reporting:

The Company identifies primary segments based on the dominant source, nature of risks and returns and the internal organisation and management structure. The operating segments are the segments for which separate financial information is available and for which operating Profit/loss amounts are evaluated regularly by the executive Management in deciding how to allocate resources and in assessing performance.

The accounting policies adopted for segment reporting are in line with the accounting policies of the Company. segment revenue, segment expenses, segment assets and segment liabilities have been identified to segments on the basis of their relationship to the operating activities of the segment. revenue, expenses, assets and liabilities which relate to the Company as a whole and are not allocable to segments on reasonable basis have been included under "unallocated revenue/expenses/assets/liabilities".

(n) Taxes on Income:

Tax expense comprises of current tax and deferred tax. Current tax is measured at the amount expected to be paid to/recovered from the tax authorities, using the applicable tax rates. deferred income tax reflect the current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years. deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future income will be available except that deferred tax assets, in case there are unabsorbed depreciation and losses, are recognized if there is virtual certainty that sufficient future taxable income will be available to realize the same. [also refer note 25(h)].

Tax on distributed Profits payable in accordance with the provisions of section 115-o of the Income-tax act,1961, is disclosed in accordance with the Guidance note on accounting for Corporate dividend Tax issued by the Institute of Chartered accountants of India (ICaI)

(o) Impairment of Assets:

at the end of each year, the Company determines whether a provision should be made for impairment loss on fixed assets by considering the indications that an impairment loss may have occurred in accordance with accounting standard (as-28) on 'Impairment of assets'. an impairment loss is charged to the statement of Profit and Loss in the year in which, an asset is identified as impaired, when the carrying value of the asset exceeds its recoverable value. The impairment loss recognised in prior accounting periods is reversed if there has been a change in the estimate of recoverable amount.

(p) Provisions and contingencies:

Provision is recognized in the accounts when there is a present obligation as a result of past event/s and it is probable that an outflow of resources will be required to settle the obligation. Contingent liabilities, if any, are disclosed in the notes to the financial statements.


Mar 31, 2014

(a) Basis of preparation of financial statements:

The financial statements have been prepared to comply with accounting principles generally accepted in India, the accounting standards (as) notifed under the Companies (accounting standard) rules, 2006 and the relevant provisions of the Companies act, 1956. The financial statements have been prepared in the format prescribed by the revised schedule VI to the Companies act, 1956.

(b) Use of Estimates:

The preparation of the financial statements, in conformity with the generally accepted accounting principles, requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting year. differences between actual results and estimates are recognized in the year in which the results are known/ materialize.

(c) Inventories:

Inventories (Traded Goods) are valued at lower of cost and net realizable value.

(d) Property under Development:

Property under development represents leasehold land converted into stock-in-trade on the basis of lower of the cost and fair value as valued by external valuers on the date of conversion.

(e) Depreciation:

depreciation is provided on straight Line basis at the rates and in the manner specified in schedule XIV to the Companies act,1956.

(f) Revenue Recognition:

revenue from sale of products is recognised net of returns and on transfer of significant risks and rewards of ownership to the buyer, which generally coincides with the delivery of goods. sales exclude sales tax and value added tax. Interest income is accounted on accrual basis. dividend income is accounted for when the right to receive the same is established. revenue (income) is recognized when no significant uncertainty as to determination/ realization exists.

(g) Fixed Assets:

fixed assets are stated at cost of acquisition or construction and include amounts added on revaluation less accumulated depreciation and impairment loss.

fixed assets viz. land, buildings, plant and machinery as on december 31, 1984 had been revalued on the basis of their current replacement price as on december 31, 1985 and related factors. accordingly, they were stated at revalued cost.

(h) Foreign currency Transactions:

Transactions in foreign currency are recorded at the original rates of exchange in force at the time the transactions are effected. at the year-end, monetary items denominated in foreign currency are reported using closing rates of exchange. exchange differences arising thereon and on realization/payment of foreign exchange are accounted, in the relevant year, as income or expense.

(i) Investments:

Current Investments are carried at lower of cost and fair value. Long-term (non-current) investments are carried at cost. however, when there is a decline, other than temporary, the carrying amount is reduced to recognize the decline.

NOTES FORMINGg PART OF THE FINANCcIAL STATEMENTS (Contd.)

Note 2: (contd.)

(j) Employee benefits:

(i) Contributions payable to the Company''s Provident fund and superannuation fund, which is Defined contribution scheme, are charged to revenue.

(ii) The Company''s liability for Gratuity funds is Defined benefit scheme, which is funded through Trust set-up by the Company. The difference between the actuarial valuation for Gratuity and the balance in the fund maintained by Trust as at the year-end is provided for in the accounts.

(iii) Liability in respect of compensated absences is charged on the basis of actuarial valuation as at the year-end.

(k) Taxes on Income:

Tax expense comprises of current tax and deferred tax. Current tax is measured at the amount expected to be paid to / recovered from the tax authorities, using the applicable tax rates. deferred income tax refect the current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years. deferred tax assets are recognized only to the extent that there is reasonable certainty that suffcient future income will be available except that deferred tax assets, in case there are unabsorbed depreciation and losses, are recognized if there is virtual certainty that suffcient future taxable income will be available to realize the same. [also refer note 25(h)].

Tax on distributed profits payable in accordance with the provisions of section 115-o of the Income-tax act,1961, is disclosed in accordance with the Guidance note on accounting for Corporate dividend Tax issued by the Institute of Chartered accountants of India (ICaI).

(l) Impairment of Assets:

At the end of each year, the Company determines whether a provision should be made for impairment loss on fixed assets by considering the indications that an impairment loss may have occurred in accordance with accounting standard (as-28) on ''Impairment of assets''. an impairment loss is charged to the statement of profit and Loss in the year in which, an asset is identified as impaired, when the carrying value of the asset exceeds its recoverable value. The impairment loss recognised in prior accounting periods is reversed if there has been a change in the estimate of recoverable amount.

(m) Provisions and contingencies:

Provision is recognized in the accounts when there is a present obligation as a result of past event/s and it is probable that an outflow of resources will be required to settle the obligation. Contingent liabilities, if any, are disclosed in the notes to the financial statements.


Mar 31, 2013

(a) Basis of preparation of fnancial statements:

The fnancial statements have been prepared to comply with accounting principles generally accepted in India, the accounting standards notifed under the Companies (accounting standard) rules, 2006 and the relevant provisions of the Companies act, 1956. The fnancial statements have been prepared in the format prescribed by the revised schedule VI to the Companies act, 1956.

(b) Use of Estimates:

The preparation of the fnancial statements, in conformity with the generally accepted accounting principles, requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the fnancial statements and the reported amounts of revenues and expenses during the reporting year. differences between actual results and estimates are recognized in the year in which the results are known/ materialize.

(c) Inventories:

Inventories (Traded Goods) are valued at lower of cost and net realizable value.

(d) Property under Development:

Property under development represents leasehold land converted into stock-in-trade on the basis of lower of the cost and fair value as valued by external valuers on the date of conversion. [also refer note 25(q)].

(e) Depreciation:

depreciation is provided on straight Line basis at the rates and in the manner specifed in schedule XIV to the Companies act,1956.

(f) Revenue Recognition:

revenue from sale of products is recognised net of returns and on transfer of signifcant risks and rewards of ownership to the buyer, which generally coincides with the delivery of goods. sales exclude sales tax and value added tax. Interest income is accounted on accrual basis. dividend income is accounted for when the right to receive the same is established. revenue (income) is recognized when no signifcant uncertainty as to determination/ realization exists.

(g) Fixed Assets:

fixed assets are stated at cost of acquisition or construction and include amounts added on revaluation less accumulated depreciation and impairment loss. fixed assets viz. land, buildings, plant and machinery as on december 31, 1984 had been revalued on the basis of their current replacement price as on december 31, 1985 and related factors. accordingly, they were stated at revalued cost.

(h) Foreign currency Transactions:

Transactions in foreign currency are recorded at the original rates of exchange in force at the time the transactions are effected. at the year-end, monetary items denominated in foreign currency are reported using closing rates of exchange. exchange differences arising thereon and on realization/payment of foreign exchange are accounted, in the relevant year, as income or expense.

(i) Investments:

Current Investments are carried at lower of cost and fair value. Long-term (non-current) investments are carried at cost. however, when there is a decline, other than temporary, the carrying amount is reduced to recognize the decline.

(j) Employee Benefts:

(i) Contributions payable to the Company''s Provident fund and superannuation fund, which is defned contribution scheme, are charged to revenue.

(ii) The Company''s liability for Gratuity funds is defned beneft scheme, which is funded through Trust set-up by the Company. The difference between the actuarial valuation for Gratuity and the balance in the fund maintained by Trust as at the year-end is provided for in the accounts.

(iii) Liability in respect of compensated absences is charged on the basis of actuarial valuation as at the year-end.

(k) Taxes on Income:

Tax expense comprises of current tax and deferred tax. Current tax is measured at the amount expected to be paid to / recovered from the tax authorities, using the applicable tax rates. deferred income tax refect the current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years. deferred tax assets are recognized only to the extent that there is reasonable certainty that suffcient future income will be available except that deferred tax assets, in case there are unabsorbed depreciation and losses, are recognized if there is virtual certainty that suffcient future taxable income will be available to realize the same. [also refer note 25(i)].

Tax on distributed profts payable in accordance with the provisions of section 115-o of the Income-tax act,1961, is disclosed in accordance with the Guidance note on accounting for Corporate dividend Tax issued by the Institute of Chartered accountants of India (ICaI).

(l) Impairment of Assets:

at the end of each year, the Company determines whether a provision should be made for impairment loss on fxed assets by considering the indications that an impairment loss may have occurred in accordance with accounting standard (as-28) ‘''Impairment of assets''''. an impairment loss is charged to the statement of Proft and Loss in the year in which, an asset is identifed as impaired, when the carrying value of the asset exceeds its recoverable value. The impairment loss recognised in prior accounting periods is reversed if there has been a change in the estimate of recoverable amount.

(m) Provisions and contingencies:

Provision is recognized in the accounts when there is a present obligation as a result of past event/s and it is probable that an outfow of resources will be required to settle the obligation. Contingent liabilities, if any, are disclosed in the notes to the fnancial statements.

(n) Doubtful Debts/Advances:

Provision is made in accounts for debts/advances which are considered doubtful of recovery.

(n) The Company owns a piece of freehold land at sewree, Mumbai admeasuring 5413.92 sq. mtrs., which was part of the land on which the Company operated a cotton textile mill in earlier years. under the development Plan of the brihanmumbai Municipal Corporation (bMC), the said piece of land was under reservation as a recreation ground (rG) under the development Control regulations for Greater Mumbai, 1991 (dCr). under the provisions of Maharashtra regional and Town Planning act, 1966, in lieu of the aforesaid reservation, the Company, at its discretion would be entitled to either the market value of the land or to Transferable development rights (Tdr) benefts among other benefts.

as per the notifcation no. TPb.432001/2174/Cr-227/01/ud-11 dated June 14, 2006, issued by the Government of Maharashtra, it was clarifed that in case of land belonging to cotton textile mills, the development of the mill land would be governed by dCr rule 58(10). as per the said rule, development of land, such as the aforesaid, need to be done in the following manner:

a. 40% of the plot area can be developed by the owner of the plot;

b. 33% of the plot area needs to be earmarked for recreation ground, for which the floor space Index (fsI) of such earmarked plot area will be available to the owner, and

c. 27% of the plot area needs to be handed over to the Maharashtra housing and area development authorities (Mhada) in lieu of Tdr to be issued to the owner. accordingly, the Company has applied for compensatory fsI in accordance with the aforesaid dCr rule.

subsequently, pending disposal of the Company''s application, dCr rule 58(10) was again modifed vide notifcation no. TPb.4307/214/Cr-41/2007/ud-11 dated May 2, 2009, clarifying that reserved lands of textile mills need to be handed over to the bMC in lieu of issue of only Tdr for the entire land to the owners. The Company, however is pursuing its earlier application with the authorities, as it had made its application before the modifcation to the rule as aforesaid.

The Company, in any case is entitled for a minimum Tdr relating to 27% of the plot area in both the aforesaid scenarios. during the previous year, the Company entered into a Memorandum of understanding (Mou) dated March 26, 2012 with stan Plaza Limited (sPL), a wholly owned subsidiary, whereby the Company agreed to transfer the 16825 sq. ft. of Tdr relating to 27% of the plot area, as aforesaid, to sPL for a consideration of Rs. 403.80 lakhs

as per valuation done by expert valuers. as per the terms of the Mou, the Company, within three months of the date of the Mou, is required to obtain the development rights Certifcate (drC), the title document for the Tdr, from the authorities and endorse the same in the name of sPL, failing which the Mou will stand cancelled. The Company is in the process of obtaining the drC and has during the year, further extended the Mou upto november 30, 2013.

accordingly, the Company, during the previous year, has accounted for the said consideration by credit to the statement of Proft and Loss, which is disclosed in note 20 (II) – "other operating Income”.

(o) The Company has an investment in a wholly owned subsidiary, namely, standard salt Works Limited (ssWL) aggregating to Rs. 60.78 lakhs (Previous year Rs. 60.78 lakhs). The Company has given unsecured loans aggregating to Rs. 832.66 lakhs as at the year-end to ssWL. out of which loan of Rs. 782.50 lakhs (Previous year Rs. 782.50 lakhs) is interest bearing and loan of Rs. 50.16 lakhs (Previous year Rs. 170.98 lakhs) is interest free. as per the latest available balance sheet of ssWL, as at March 31, 2013, its net worth has been eroded. however, in view of the long-term strategic nature of the investment and the future growth prospects of the subsidiary, no provision for diminution in the value of the investment and for the unsecured loans is considered necessary at this stage.

(p) The Company had received a letter from the Ministry of Company affairs for getting its cost accounts for the year ended March 31, 2007 relating to its chemical products, audited by a specifed cost auditor. however, since the operations at the Chemical Plant have been closed, the Company has applied to the said Ministry to withdraw the Cost audit order for which the reply from the Ministry is awaited.

(q) The Company had entered into a Lease agreement dated april 1, 1967 with Maharashtra Industrial development Corporation (MIdC) for a term of 100 years, calculated from august 1, 1965, in respect of land admeasuring 92.25 acres located at Plot no.4, in Trans-Thane Creek Industrial area in the villages of Ghansoli and savali, Taluka Thane, district Thane.

out of the above, the Company, in an earlier year, has transferred and assigned all its rights, title and interest in respect of land admeasuring 30 acres to a party for consideration.

The Company had decided to develop the balance land admeasuring 62.25 acres commercially for which the Company was examining various proposals for development. Consequently, the amount representing the net asset value (cost less accumulated amortization) of the said 62.25 acres aggregating to Rs. 2209.68 lakhs, being the lower of cost and fair value (as per valuation report), had been transferred from fixed assets to Property under development in the earlier previous year in-line with the aforesaid new focus in the business of the Company. The balance amount in the revaluation reserve pertaining to the aforesaid land had been accordingly adjusted in the earlier previous year.

during the previous year, the Company has entered into a Term sheet with a party for development of the aforesaid balance leasehold land on the following terms and conditions:

The Company will receive:

(i) aggregate sum of Rs. 13000 lakhs spread over a period of fve years; and

(ii) 20% constructed IT space/area in the development.

The Company was in the process of entering into a defnitive agreement for development of the aforesaid land and had received an advance of Rs. 1100 lakhs on this account.

however, the board of directors of the Company, in their meeting held on october 19, 2012, have reviewed the progress of the said understanding with the said party on account of delays in reaching the fnal agreement for development. The Company and the party mutually decided to terminate the aforesaid Term sheet with effect from october 19, 2012. In pursuance thereto, the Company refunded without interest, the advance of Rs. 1100 lakhs.

(s) "other Current Liabilities” (note 7) includes amount aggregating to Rs. 14.28 lakhs (Previous year Rs. 52.98 lakhs) relating to the refund of Income-tax received by the Company for various assessment years. however, the Company has preferred appeals against the same which are pending with the Income-tax authorities. hence, the appropriate accounting treatment for the aforesaid will be given in the accounts on disposal of the said appeals.

(t) The fgures of the previous year have been regrouped wherever necessary to correspond with those of current year.


Mar 31, 2012

(a) Basis of preparation of financial statements:

The accounts have been prepared to comply in all material aspects with applicable accounting principles in India, the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 and the relevant provisions of the Companies Act, 1956.

The Financial Statements have been prepared in the format prescribed under the Revised Schedule VI to the Companies Act, 1956. The operating cycle' as defined under the said Schedule and considered in these financials is of twelve months duration.

(b) Use of Estimates:

The preparation of the financial statements, in conformity with the generally accepted accounting principles, requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Differences between actual results and estimates are recognized in the period in which the results are known/materialize.

(c) Fixed Assets:

Fixed Assets are stated at cost of acquisition or construction and include amounts added on revaluation less accumulated depreciation and impairment loss.

Fixed Assets viz. land, buildings, plant and machinery as on 31.12.1984 had been revalued on the basis of their current replacement price as on 31.12.1985 and related factors. Accordingly, they were stated at revalued cost. [Also refer note 25(t)j.

(d) Depreciation:

(i) Depreciation is provided on revalued cost of assets on the basis of residual life of assets as determined by the external valuers.

(ii) Depreciation is also calculated on historical cost of assets [Also refer note 25 (c)].

(iii) Cost of leasehold land is amortized over the period of lease [Also refer note 25 (t)].

(e) Investments:

Current Investments are carried at lower of cost and fair value. Long term investments are carried at cost. However, when there is a decline, other than temporary, the carrying amount is reduced to recognize the decline.

(f) Inventories:

Inventories (Traded Goods) are valued at lower of cost and net realizable value.

(g) Property under Development:

Property under development represents leasehold land converted into stock-in-trade on the basis of lower of the cost and fair value as valued by external valuers on the date of conversion. [Also refer note 25(t)].

(h) Doubtful Debts/Advances:

Provision is made in accounts for debts/advances which are considered doubtful of recovery.

(I) Contingent Liabilities and provisions:

These, if any, are disclosed in the notes on accounts. Provision is made in the accounts, if it becomes probable that an outflow of resources embodying economic benefits will be required to settle the obligation.

(j) Revenue Recognition:

Revenue (income) is recognized when no significant uncertainty as to measurability or collectability exists. Sales includes sales value of goods and excludes other recoveries such as handling charges, transport, octroi, etc. and Value Added Tax.

(k) Employee Benefits:

Provision for gratuity is made in the accounts on the basis of actuarial valuation carried out at year-end.

Contribution as required under the statute/rules is made to the Group Provident Fund as also to Government Provident Fund.

Contribution is made to the Group Superannuation Fund in respect of Management Cadre Staff.

(I) Foreign Currency Transactions:

Transactions in foreign currency are recorded at the original rates of exchange in force at the time the transactions are effected. At the year-end, monetary items denominated in foreign currency are reported using closing rates of exchange. Exchange differences arising thereon and on realization/payment of foreign exchange are accounted, in the relevant year, as income or expense.

(m) Impairment of Assets:

Impairment loss is provided to the extent the carrying amount of assets exceeds their recoverable amounts. Recoverable amount is the higher of an asset's net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of the asset and from its disposal at the end of its useful life. Net selling price is the amount obtainable from sale of the asset in an arm's length transaction between knowledgeable, willing parties, less the costs of disposal.

(n) Borrowing Costs:

Borrowing costs that are attributable to the acquisition, construction or production of qualifying assets are capitalized as a part of the cost of such assets. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use. All other borrowing costs are charged to revenue.

(o) Taxes on Income:

Tax expense comprises of current tax and deferred tax. Current tax is measured at the amount expected to be paid to/recovered from the tax authorities, using the applicable tax rates. Deferred income tax reflect the current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future income will be available except that deferred tax assets, in case there are unabsorbed depreciation and losses, are recognized if there is virtual certainty that sufficient future taxable income will be available to realize the same.

Tax on distributed profits payable in accordance with the provisions of Section 115-0 of the Income-tax Act,1961, is disclosed in accordance with the Guidance Note on Accounting for Corporate Dividend Tax issued by the Institute of Chartered Accountants of India (ICAI).


Mar 31, 2011

A1. Basis of preparation of financial statements:

The accounts have been prepared to comply in all material aspects with applicable accounting principles in India, the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 and the relevant provisions of the Companies Act, 1956.

A2. Use of Estimates:

The preparation of the financial statements, in conformity with the generally accepted accounting principles, requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Differences between actual results and estimates are recognized in the period in which the results are known/materialize.

A3. Fixed Assets:

Fixed Assets are stated at cost of acquisition or construction and include amounts added on revaluation less accumulated depreciation and impairment loss.

Fixed Assets viz. land, buildings, plant and machinery as on 31.12.1984 had been revalued on the basis of their current replacement price as on 31.12.1985 and related factors. Accordingly, they were stated at revalued cost (Also Refer Note B17 below).

A4. Investments:

Current Investments are carried at lower of cost and fair value. Long term investments are carried at cost. However, when there is a decline, other than temporary, the carrying amount is reduced to recognize the decline.

A5. Inventories:

Inventories (Traded Goods) are valued at lower of cost and net realizable value.

A6. Property under Development:

Property under development (stock-in-trade) represents leasehold land converted into stock-in-trade on the basis of lower of the cost and fair value as valued by external valuers on the date of conversion (Refer Note B17 below).

A7. Doubtful Debts/Advances:

Provision is made in accounts for debts/advances which are considered doubtful of recovery.

A8. Contingent Liabilities:

These, if any, are disclosed in the notes on accounts. Provision is made in the accounts, if it becomes probable that an outflow of resources embodying economic benefits will be required to settle the obligation.

A9. Sales/Turnover:

Sales/Turnover includes sales value of goods and excludes other recoveries such as handling charges, transport, octroi, etc. and Value Added Tax.

A10. Revenue Recognition:

Revenue (income) is recognized when no significant uncertainty as to measurability or coliectability exists.

A11. Employee Benefits:

Provision for gratuity is made in the accounts on the basis of actuarial valuation carried out at year-end.

Contribution as required under the statute/rules is made to the Group Provident Fund as also to Government Provident Fund.

Contribution is made to the Group Superannuation Fund in respect of Management Cadre Staff.

A12. Depreciation:

(i) Depreciation is provided on revalued cost of assets on the basis of residual life of assets as determined by the external valuers.

(ii) Depreciation is also calculated on historical cost of assets (Refer Note B4 below).

(iii) Cost of leasehold land is written off over the period of lease (Refer Note B17 below).

A13. Foreign Currency transactions:

Transactions in foreign currency are recorded at the original rates of exchange in force at the time the transactions are effected. At the year-end, monetary items denominated in foreign currency are reported using closing rates of exchange. Exchange differences arising thereon and on realization/payment of foreign exchange are accounted, in the relevant year, as income or expense.

A14. Impairment of Assets:

Impairment loss is provided to the extent the carrying amount of assets exceeds their recoverable amounts. Recoverable amount is the higher of an assets net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of the asset and from its disposal at the end of its useful life. Net selling price is the amount obtainable from sale of the asset in an arms length transaction between knowledgeable, willing parties, less the costs of disposal.

A15. Borrowing Costs:

Borrowing costs that are attributable to the acquisition, construction or production of qualifying assets are capitalized as a part of the cost of such assets. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use. All other borrowing costs are charged to revenue.

A16. Taxes on Income:

Tax expense comprises of current tax and deferred tax. Current tax is measured at the amount expected to be paid to/recovered from the tax authorities, using the applicable tax rates. Deferred income tax reflect the current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future income will be available except that deferred tax assets, in case there are unabsorbed depreciation and losses, are recognized if there is virtual certainty that sufficient future taxable income will be available to realise the same- Tax on distributed profits payable in accordance with the provisions of Section 115-0 of the Income-tax Act,1961, is disclosed in accordance with the Guidance Note on Accounting for Corporate Dividend Tax issued by the Institute of Chartered Accountants of India (ICAl).


Mar 31, 2010

A1. Basis of preparation of financial statements:

The accounts have been prepared to comply in all material aspects with applicable accounting principles in India, the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 and the relevant provisions of the Companies Act, 1956.

A2. Use of Estimates:

The preparation of the financial statements, in conformity with the generally accepted accounting principles, requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Differences between actual results and estimates are recognised in the period in which the results are known/materialise.

A3. Fixed Assets:

Fixed assets are stated at cost of acquisition or construction and include amounts added on revaluation less accumulated depreciation and impairment loss.

Fixed assets viz. land, buildings, plant and machinery as on 31.12.1984 had been revalued on the basis of their current replacement price as on 31.12.1985 and related factors. Accordingly, they were stated at revalued cost.

A4. Investments:

Current investments are carried at lower of cost and fair value. Long term investments are carried at cost. However, when there is a decline, other than temporary, the carrying amount is reduced to recognise the decline.

A5. Inventories:

Inventories (Traded Goods) are valued at lower of cost and net realisable value.

A6. Doubtful Debts/Advances:

Provision is made in accounts for debts/advances which are considered doubtful of recovery.

A7. Contingent Liabilities:

These, if any, are disclosed in the notes on accounts. Provision is made in the accounts, if it becomes probable that an outflow of resources embodying economic benefits will be required to settle the obligation.

A8. Sales/Turnover:

Sales/turnover includes sales value of goods and excludes other recoveries such as handling charges, transport, octroi, etc. and Value Added Tax.

A9. Revenue Recognition:

Revenue (income) is recognised when no significant uncertainty as to measurability or collectability exists.

A10. Employee Benefits:

Provision for gratuity is made in the accounts on the basis of actuarial valuation carried out at year end.

Contribution as required under the statute/rules is made to the Group Provident Fund as also to Government Provident Fund.

Contribution is made to the Group Superannuation Fund in respect of Management Cadre staff.

A11. Depreciation:

(i) Depreciation is provided on revalued cost of assets on the basis of residual life of assets as determined by the external valuers.

(ii) Depreciation is also calculated on historical cost of assets (Refer Note No. B3 below).

(iii) Cost of leasehold land is written off over the period of lease.

A12. Foreign Currency transactions:

Transactions in foreign currency are recorded at the original rates of exchange in force at the time the transactions are effected. At the year-end, monetary items denominated in foreign currency are reported using closing rates of exchange. Exchange differences arising thereon and on realization/payment of foreign exchange are accounted, in the relevant year, as income or expense.

A13. Impairment of Assets:

Impairment loss is provided to the extent the carrying amount of assets exceeds their recoverable amounts. Recoverable amount is the higher of an assets net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of the asset and from its disposal at the end of its useful life. Net selling price is the amount obtainable from sale of the asset in an arms length transaction between knowledgeable, willing parties, less the costs of disposal.

A14. Borrowing Costs:

Borrowing costs that are attributable to the acquisition, construction or production of qualifying assets are capitalised as a part of the cost of such assets. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use. All other borrowing costs are charged to revenue.

A15. Taxes on Income:

Tax expenses comprises of current tax, deferred tax and fringe benefits tax. Current tax is measured at the amount expected to be paid to/recovered from the tax authorities, using the applicable tax rates. Deferred income tax reflect the current period timing differences between taxable income and accounting income for the period and reversal of timing difference of earlier years/period. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future income will be available except that deferred tax assets, in case there are unabsorbed depreciation and losses, are recognised if there is virtual certainty that sufficient future taxable income will be available to realise the same. Fringe benefits tax is recognised in accordance with the relevant provisions of the Income-tax Act, 1961 and the Guidance Note on Fringe Benefits Tax issued by the Institute of Chartered Accountants of India (ICAI). Tax on distributed profits payable in accordance with the provisions of the Income-tax Act, 1961 is disclosed in accordance with the Guidance Note on Accounting for Corporate Dividend Tax issued by the ICAI.

 
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