Accounting Policies of Cochin Malabar Estates & Industries Ltd. Company

Mar 31, 2015

I) BASIS OF ACCOUNTING

The financial statements have been prepared to comply in all material respects with the Accounting Standards specified under section 133 of the Companies Act 2013, read with Rule 7 of the Companies (Accounts) Rules 2014. The financial statements have been prepared under the historical cost convention on an accrual basis.

ii) USE OF ESTIMATES

The preparation of financial statements are in conformity with generally accepted accounting principles which 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. Difference between actual results and estimates are recognized in the period in which the results are known/materialized.

iii) FIXED ASSETS

Tangible Fixed Assets are stated at their original cost adjusted by revaluation of land, building, roads & bridges and plant & machinery wherever applicable, less depreciation/impairment. Cost includes incidental expenses. Profits or losses on sale of tangible fixed assets are included in the statement of profit and loss and calculated as difference between the value realized and book value. Capital work-in-progress is stated at cost.

iv) DEPRECIATION & AMORTISATION EXPENSES :

Depreciation on assets are provided under WDV method at the useful life specified under Schedule II of the Companies Act, 2013.

v) IMPAIRMENT

An impairment loss is recognized where applicable when the carrying value of fixed assets exceeds its market value or value in use whichever is higher. Reversal of impairment losses recognized in prior years is recorded when there is an indication that the impairment losses recognized for the assets no longer exist or have decreased.

vi) BORROWING COST

Borrowing cost relating to acquisition/construction of qualifying assets are capitalized until the time all substantial activities necessary to prepare the qualifying assets for their intended use are complete. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing cost are charged to revenue.

vii) TAXATION

Current tax comprise of Income Tax that would be payable based on computation of tax as per taxation laws under the Income Tax Act, 1961. Deferred Tax is recognised, subject to the consideration of prudence, on timing differences, between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred Tax assets are not recognised unless there is virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised.

viii) PROVISIONS AND CONTINGENT LIABILITIES

The Company recognizes a provision when there is a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the obligation. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or a present obligation and the likelihood of outflow of resources is remote, no provision or disclosure for contingent liability is made. Contingent assets are not provided for or disclosed.

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Mar 31, 2014

I) BASIS OF ACCOUNTING

The accounts are prepared on historical cost convention (with the exception of certain land and plant and machinery which were revalued) based on Accrual Method of Accounting and applicable Accounting Standards and on Going Concern Basis in accordance with accounting standards and the relevant provisions of the Companies Act, 1956.

The financial statements has been prepared and presented as per the requirement of Revised Schedule VI as notified under the Companies Act, 1956.

All Assets and Liabilities have been classified as current or non current as per the company''s normal operating cycle and other criteria specified in the Revised Schedule VI to the Companies Act, 1956. The company has presently determined 12 months as the normal Operating cycle for the purpose of classification of current and non current Assets and Liabilities.

ii) USE OF ESTIMATES

The preparation of financial statements are in conformity with generally accepted accounting principles which 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. Difference between actual results and estimates are recognized in the period in which the results are known/ materialized.

iii) FIXED ASSETS

Fixed Assets are stated at cost inclusive of interest on borrowings attributable to acquisition of tangible fixed assets and increased by revaluation of assets at their fair market values as on 31/03/1993 as determined by approved valuers, less depreciation except in respect of Rubber Wood Division and Kinalur Estate of Rubber Division for which no depreciation is provided during the year.

iv) DEPRECIATION & AMORTISATION EXPENSES

Depreciation on assets other than relating to Rubber Wood Division are provided under WDV method at the rates specified under Schedule XIV of the Companies Act, 1956. However, depreciation is not provided for the year in respect of Rubber Wood Division since the Division is not in operation.

v) BORROWING COST

Borrowing cost relating to acquisition/construction of qualifying assets are capitalized until the time all substantial activities necessary to prepare the qualifying assets for their intended use are complete. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing cost are charged to revenue.

vi) TAXATION

Provision for Current Tax is being made as per the provisions of the Income Tax Act, 1961.

Provision for Deferred Tax in accordance with the Accounting Standard (AS-22) - Accounting for taxes on Income is not considered in view of the absence of virtual certainty of realisation of unabsorbed carry forward losses.

vii) SEGMENT REPORTING

As the entire operation of the company''s products relate to "Plantation" as single primary reportable segment, in the opinion of management no separate segment reporting is required under The Accounting Standard Rules, 2006.

viii) CASH FLOW

Cash flow statement has been prepared in accordance with the Indirect Method as per Accounting Standard 3 prescribed in "The Accounting Standard Rules, 2006."

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Mar 31, 2013

I) Basis of Accounting

The accounts are prepared on historical cost convention (with the exception of certain land and plant & machinery which were revalued) based on Accrual Method of Accounting and applicable Accounting Standards and on Going Concern Basis in accordance with accounting standards and the relevant provisions of the Companies Act, 1956.

The financial statements has been prepared and presented as per the requirement of Revised Schedule VI as notified under the Companies Act, 1956.

All Assets and Liabilities have been classified as current or non-current as per the Company''s normal operating cycle and other criteria specified in the Revised Schedule VI to the Companies Act, 1956. The Company has presently determined 12 months as the normal operating cycle for the purpose of classification of current and non current Assets and Liabilities.

ii) Use of Estimates

The preparation of financial statements are in conformity with generally accepted accounting principles which 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. Difference between actual results and estimates are recognized in the period in which the results are known/materialized.

iii) Fixed Assets

a) Fixed Assets are stated at cost inclusive of interest on borrowings attributable to acquisition of tangible fixed assets and increased by revaluation of assets at their fair market values as on 31/03/1993 as determined by approved valuers, less depreciation except in respect of Rubberwood Division and Kinalur Estate of Rubber Division for which no depreciation is provided during the year.

b) Subsidies received in respect of fixed assets are deducted from the cost of respective assets.

c) Items of machinery spares to be used in connection with an item of fixed assets are amortized over the useful life of the assets.

d) Fixed Assets taken on lease (other than land taken on perpetual lease) are not capitalized and the annual lease rentals are absorbed in the Statement of Profit & Loss. The excess of lease rentals paid over the amount accrued in respect thereof is treated as prepaid lease rental.

iv) Investments

Long-term and Unquoted Investments are stated at cost unless there is a permanent decline in value thereof, in which case, adequate provision is made in the accounts. Cost includes brokerage, stamp duty and other financial charges directly attributable to their acquisition.

v) Inventories

a) Stock of Finished Rubber, Tea and other minor produce are valued at the lower of cost (determined on weighted average method) and net realizable value.

b) Stock of Stores and spare parts are valued at cost using the weighted average cost basis.

c) Loose tools etc, are amortized over a period of 3 years.

vi) Retirement Benefits

Retirement benefits to employees, as applicable, are ascertained and provided in the accounts as per AS 15 "Employees Benefits".

vii) Revenue Recognition

Sales comprise of sales of goods, net of discounts and sales return, Sales Tax and Excise Duty wherever applicable. Sale of standing trees is accounted as and when they are removed and the proceeds are credited to the Statement of Profit & Loss.

Dividends from companies are accounted as income in the year in which they are received.

viii) Depreciation & Amortisation Expenses

Depreciation on assets other than relating to Rubberwood Division are provided under WDV method at the rates specified under Schedule XIV of the Companies Act, 1956. However, depreciation is not provided for the year in respect of Rubberwood Division and Kinalur Estate of Rubber Division since these Divisions are not in operation.

Value of lease hold land taken on perpetual lease and development expenditure thereto are not amortised. Depreciation on the incremental value on revaluation is debited to the Fixed Assets Revaluation Reserve account.

Intangible Assets are amortized over a period of 5 years.

ix) Replanting Expenses

Replanting expenditure is charged to the Statement of Profit & Loss of the year in which they are incurred except for Replanting expenses ofTea Division (priorto Demerger) which were capitalised.

x) Foreign Currency Transaction

There were no foreign currency transactions made during the year under audit.

xi) Taxation

No provision for taxation is made in view of losses incurred.

xii) Impairment of Assets

At each Balance Sheet date, the carrying values of the tangible assets are reviewed to determine whether there is any indication that those assets have suffered on impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where there is an indication that there is a likely impairment loss for a group of assets, the company estimates the recoverable amount of the group of assets as a whole to determine the value of impairment.

xiii) Borrowing Cost

Borrowing cost relating to acquisition/construction of qualifying assets are capitalized until the time all substantial activities necessary to prepare the qualifying assets for their intended use are complete. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing cost are charged to revenue.

xiv) Segment Reporting

As the entire operation of the Company''s products relate to "Plantation" as single primary reportable segment, in the opinion of management no separate segment reporting is required under The Accounting Standard Rules, 2006.

xv) Cash Flow

Cash Flow Statement has been prepared in accordance with the Indirect Method as per Accounting Standard 3 prescribed in "The Accounting Standard Rules, 2006."

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Mar 31, 2010

1. Basis of Accounting

The accounts are prepared on historical cost convention (with the exception of certain land and plant and machinery which were revalued) based on Accrual Method of Accounting and applicable Accounting Standards and on Going Concern Basis in accordance with accounting standards and the relevant provisions of Companies Act, 1956.

2. Use of Estimates

The preparation of financial statements are in conformity with generally accepted accounting principles which 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. Difference between actual results and estimates are recognized in the period in which the results are known/ materialized.

3. Fixed Assets

(i) Fixed Assets are stated at cost inclusive of interest on borrowings attributable to acquisition of Fixed Assets and increased by revaluation of assets at their fair market values as on 31/03/1993 as determined by approved valuers, less depreciation except in respect of Rubber Wood Division and Kinalur Estate of Rubber Division for which no depreciation is provided during the year.

(ii) Subsidies received in respect of fixed assets are deducted from the cost of respective assets.

(iii) Items of machinery spares to be used in connection with an item of fixed assets are amortized over the useful life of the assets.

(iv) Fixed Assets taken on lease (other than land taken on perpetual lease) are not capitalized and the annual lease rentals are absorbed in the Profit and Loss Account. The excess of lease rentals paid over the amount accrued in respect thereof is treated as prepaid lease rental.

4. Investments

Long term and unquoted Investments are stated at cost unless there is a permanent decline in value

thereof, in which case, adequate provision is made in the accounts. Cost includes brokerage, stamp duty and other financial charges directly attributable to their acquisition.

5. Inventories

i) Stock of Finished Rubber, Tea and Other Minor Produce are valued at the lower of cost (determined on weighted average method) and net realizable value.

ii) Stock of Stores and spare parts are valued at cost using the weighted average cost basis.

iii) Loose tools etc. are amortized over a period of 3 years.

6. Retirement Benefits

Retirement benefits to employees are ascertained and provided in the accounts as per AS-15 "Employee Benefits".

i) Gratuity:

Company has taken group gratuity policy for future payment of gratuity with the Life Insurance Corporation of India (LIC). Incremental liability for gratuity has been provided in the accounts based on actuarial valuation. The arrears of premium are being paid in monthly instalments.

ii) Superannuation Fund :

This is a defined contribution plan. The Company contributes under the defined contribution plan, managed by Life Insurance Corporation of India. The Company has no further obligations for future superannuation benefits other than its annual contributions and recognized such contribution as expenses in the year in which the same was incurred.

iii) Provident Fund :

This is a defined contribution plan and contributions made to the fund are charged to revenue. The Company has no further obligations for future provident fund benefits other than annual contribution.

7. Revenue Recognition

Sales comprise of sales of goods, net of discounts and sales return, Sales Tax and Excise Duty wherever applicable. Sale of standing trees is accounted as and when they are removed and the proceeds are credited to the Profit and Loss Account.

Dividends from Companies are accounted as income in the year in which they are received.

8. Depreciation

Depreciation on assets other than relating to Rubber Wood Division are provided under WDV method at the rates specified under Schedule XIV of the Companies Act, 1956. However, depreciation is not provided for the year in respect of Rubber Wood Division and Kinalur Estate of Rubber Division since these Divisions are not in operation.

Value of lease hold land taken on perpetual lease and development expenditure thereto are not amortized. Depreciation on the incremental value on revaluation is debited to the Fixed Assets Revaluation Reserve account.

9. Replanting Expenses

Replanting expenses is charged to the Profit and Loss Account of the year in which they are incurred except for Replanting expenses of Tea Division for the reasons explained in Note No. 8 below.

10. Foreign Currency Transactions

There were no foreign currency transactions made during the year under audit.

11. Taxation

No provision for taxation for current year is made in view of carried forward losses. The Company has significant unabsorbed depreciation and carried forward losses. In the absence of virtual certainty of realization of unabsorbed depreciation and carry forward losses, no Deferred Tax assets has been recognized, which is not quantified.

12. Impairment of Assets

At each Balance Sheet date, the carrying values of