Accounting Policies of Gloster Ltd.[Old] Company

Mar 31, 2014

1.1 Basis of preparation

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India under the historical cost convention, except for certain tangible assets, which are carried at revalued amounts. Pursuant to circular 15/2013 dated 13.09.2013 read with circular 08/2014 dated 04.04.2014, till the Standards of Accounting or any addendum thereto are prescribed by Central Government in consultation and recommenda-tion of the National Financial Reporting Authority, the existing Accounting Standards notified under the Companies Act, 1956 shall continue to apply. Consequently the Financial Statements have been prepared to comply in all material aspects with the accounting standards notified under section 211(3C) [Companies (Accounting Standards) Rules 2006, as amended] and the other relevant provisions of the Companies Act, 1956.

All assets and liabilities have been classified as current or non-current as per Company''s normal operating cycle and other criteria set out in the Schedule VI to the Companies Act, 1956. Based on the nature of products and the time between the acquisition of assets for processing and their realization in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current - non current classification of assets and liabilities.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

1.2 Use of estimates

The preparation of financial statements in conformity with Indian GAAP requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although these estimates are based on management''s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in outcomes requiring a material adjustment to the carrying amounts of assets and liabilities in future periods.

1.3 Tangible assets and Depreciation

a) All items of land, building and plant and machinery at company''s factory at Bauria, Howrah are revalued and restated at valuation by an approved valuer at current replacement cost as at 31st March, 2013 (an earlier revaluation at current replacement cost was carried out as at 31st March, 2010). The appreciation in the net book value of these assets over their book value has been credited to Revaluation Reserve.

b) Other tangible assets are stated at cost of acquisition including inward freight, duties, taxes and expenses incidental to acquisition and installation.

c) Depreciation is provided at Straight line method at rates specified in Schedule XIV of the Companies Act, 1956. No depreciation is provided on Freehold Land.

d) Profit and Loss on disposal of tangible assets is recognized in the Statement of Profit and Loss.

e) An impairment loss is recognized where applicable when the carrying value of tangible asset exceeds its market value or value in use whichever is higher.

1.4 Intangible assets and Amortization

a) Intangible assets are stated at cost of acquisition including duties, taxes and expenses incidental to acquisition and installation.

b) Intangible assets comprising of computer software is depreciated on straight line method over a period of five years.

c) Profit and Loss on disposal of Intangible assets is recognized in the Statement of Profit and Loss.

d) An impairment loss is recognized where applicable when the carrying value of intangible asset exceeds its market value or value in use whichever is higher.

1.5 Investments

Long term investments are carried at cost after deducting provision, if any, for diminution in value considered to be other than temporary in nature.

Current investments are stated at lower of cost and fair value.

Dividend income is recognized when the right to receive dividend is established.

1.6 Subsidy and Export incentive

Subsidy and export incentive are accounted for when no significant uncertainty exists regarding its collectibility. Subsidy/grant that relate to specific fixed assets are deducted from the cost of the relevant fixed asset. Subsidy receivable against any expenditure is recognized in the statement of profit and loss. Subsidy received/receivable which is in the nature of promoters contribution i.e. they are given with reference to the total investment/capital outlay in an undertaking is credited to Capital Reserve.

1.7 Inventories

Raw materials, Stores and Spares parts and components are valued at cost (cost being determined on weighted average basis) or at net realizable value whichever is lower.

Semi-finished goods and stock-in-process are valued at raw materials cost plus labour and overheads apportioned on an estimated basis depending upon the stages of completion or at net realizable value whichever is lower.

Finished goods are valued at cost or at net realizable value whichever is lower. Cost includes all direct cost and applicable manufacturing and administrative overheads.

1.8 Employee Benefit

a) Defined Contribution Plans

The Company contributes to Provident Funds which are administered by duly constituted and approved independent Trust/Government and such contributions are charged against revenue every year. In respect of Provident Fund Contributions made to an independent Trust administered by the Company, the interest rate payable to the members of the Trust shall not be lower than the statutory rate of interest declared by the Central Government under the Employees Provident Funds and Miscellaneous Provisions Act, 1952 and shortfall if any shall be made good by the Company.

The Company operates a Superannuation Scheme for certain employees and contributions by the Company under the scheme, is charged against revenue every year.

b) Defined Benefit Plans

The Company provides for gratuity covering eligible employees in accordance with Payment of Gratuity Act, 1972.

Accrued liability determined based on actuarial valuation (using the Projected Unit Credit Method) as at the year end in respect of future payment of gratuities are charged against revenue every year.

Actuarial gains and losses are recognized immediately in the Statement of Profit and Loss.

c) Compensated Absences

Accrued liability in respect of leave encashment benefit on retirement is accounted for on the basis of actuarial valuation (using the Projected Unit Credit Method) as at the year end and charged to revenue every year.

Compensated absences benefits comprising of entitlement to accumulation of Sick Leave is provided for based on actuarial valuation at the end of the year.

Actuarial gains and losses are recognized immediately in the statement of Profit and Loss.

d) Other Short Term Employee Benefits

Short Term Employee Benefits are recognized as an expense as per the Company''s schemes based on expected obligation on an undiscounted basis.

1.9 Research & Development Cess and Excise duty

Research & Development Cess and Excise Duty (wherever applicable) on manufactured goods are accounted for at the time of their clearance from the factory. Research and Development Cess and Excise Duty (wherever applicable) in respect of manufactured goods lying at the year end are included in inventory after creating suitable provision for the same.

1.10 Sales

Sales is stated net of sales tax. Sale is recognized on transfer of substantial risks and rewards of ownership in goods to the buyer.

1.11 Interest Income

Interest Income is recognized on a time proportion basis taking in to account the amount outstanding and the applicable interest rate.

1.12 Foreign Currency Transaction

(i) Initial Recognition

On initial recognition, all foreign currency transactions are recorded at exchange rates prevailing on the date of the transaction.

(ii) Subsequent Recognition

At the reporting date, foreign currency non- monetary items carried in terms of historical cost are reported using the exchange rate at the date of transactions.

All monetary assets and liabilities in foreign currency are restated at the end of accounting period at the closing exchange rate.

The premium or discount arising at the inception of forward exchange contracts covered under AS 11 entered into to hedge an existing asset/liability, is amortized as expense or income over the life of the contract. Any profit or loss arising on cancellation or renewal of such a forward exchange contract is recognized as income or expense for the period.

Derivative contracts outstanding at the Balance Sheet date are marked to market and resulting loss, if any, is provided for in the financial statements. Any profit or loss arising on cancellation of derivative instruments is recognized as income or expense for the period.

1.13 Taxation

Current tax is determined as the amount of tax payable in respect of taxable income for the year based on applicable tax rates and laws.

Deferred tax is recognized, on timing differences, being the difference 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 recognized unless there is reasonable certainty and virtual certainty in case of unabsorbed loss and depreciation, that sufficient future taxable income will be available against which such deferred tax assets will be realized. Deferred tax Assets is reviewed at each Balance Sheet date to reassess its realization.

1.14 Borrowing Cost

Borrowing costs are capitalized as part of the cost of qualifying assets when it is probable that they will result in future economic benefits to the enterprise and the costs can be measured reliably. Other borrowing costs are recognized as an expense in the period in which they are incurred.

1.15 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 amount 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.

1.16 Earnings per Share

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period and for all periods presented is adjusted for events, such as bonus shares, other than the conversion of potential equity shares, that have changed the number of equity shares outstanding, without a corresponding change in resources. For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares.

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Mar 31, 2013

1.1 Basis of preparation

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India under the historical cost convention, except for certain tangible assets which are carried at revalued amounts. These financial statements have been prepared to comply in all material aspects with the accounting standards notified under section 211 (3C) [Companies (Accounting Standards) Rules, 2006, as amended] and other relevant provisions of the Companies Act, 1956.

All assets and liabilities have been classified as current or non-current as per Company''s normal operating cycle and other criteria set out in the Schedule VI to the Companies Act, 1956. Based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current - non current classification of assets and liabilities.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

1.2 Use of estimates

The preparation of financial statements in conformity with Indian GAAP requires the management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although these estimates are based on management''s best knowledge of current events and actions, uncertainity about these assumptions and estimates could result in outcomes requiring a material adjustment to the carrying amounts of assets and liabilities in future periods.

1.3 Tangible assets and Depreciation

a) All items of land, building and plant and machinery at company''s factory at Bauria, Howrah are revalued and restated at valuation by an approved valuer at current replacement cost as at 31st March, 2013 (an earlier revaluationat current replacement cost was carried out as at 31st March, 2010). The appreciation in the net book value of these assets over their book value has been credited to Revaluation Reserve.

b) Other tangible assets are stated at cost of acquisition including inward freight, duties, taxes and expenses incidental to acquisition and installation.

c) Depreciation is provided at Straight line method at rates specified in Schedule XIV of the Companies Act, 1956. No depreciation is provided on Freehold Land.

d) Profit and Loss on disposal of tangible assets is recognised in the Statement of Profit and Loss.

e) An impairment loss is recognized where applicable when the carrying value of tangible asset exceeds its market value or value in use whichever is higher.

1.4 Intangible assets and Amortization

a) Intangible assets are stated at cost of acquisition including duties, taxes and expenses incidental to acquisition and installation.

b) Intangible assets comprising of computer software is depreciated on straight line method over a period of five years.

c) Profit and Loss on disposal of intangible assets is recognised in the Statement of Profit and Loss. .

d) An impairment loss is recognized where applicable when the carrying value of intangible asset exceeds its market value or value in use whichever is higher.

1.5 Investments

Long term investments are carried at cost after deducting provision, if any, for diminution in value considered to be other than temporary in nature.

Current investments are stated at lower of cost and fair value.

Dividend income is recognised when the right to receive dividend is established.

1.6 Subsidy and Export incentive

Subsidy and export incentive are accounted for when no significant uncertainty exists regarding its collectibility. Subsidy / grant that relate to specific fixed assets are deducted from the cost of the relevant fixed asset. Subsidy receivable against any expenditure is recognized in the statement of profit and loss. Subsidy received / receivable which is in the nature of promoters contribution i.e. they are given with reference to the total investment / capital outlay in an undertaking is credited to Capital Reserve.

1.7 Inventories

Raw materials, Stores and Spares parts and components are valued at cost (cost being determined on weighted average basis) or at net realizable value whichever is lower.

Semi-finished goods and stock-in-process are valued at raw materials cost plus labour and overheads apportioned on an estimated basis depending upon the stages of completion or at net realizable value whichever is lower.

Finished goods are valued at cost or at net realizable value whichever is lower. Cost includes all direct cost and applicable manufacturing and administrative overheads.

1.8 Employee Benefit

a Defined Contribution Plans

The Company contributes to Provident Funds

which are administered by duly constituted and approved independent Trust / Government and such contributions are charged against revenue every year. In respect of Provident Fund Contributions made to an independent Trust administered by the Company, the interest rate payable to the members of the Trust shall not be lower than the statutory rate of interest declared by the Central Government under the Employees Provident Funds and Miscellaneous Provisions Act, 1952 and shortfall if any shall be made good by the Company.

The Company operates a Superannuation Scheme for certain employees and contributions by the Company under the scheme, is charged against revenue every year.

b Defined Benefit Plans

The Company provides for gratuity covering eligible employees in accordance with Payment of Gratuity Act, 1972.

Accrued liability determined based on actuarial valuation ( using the Projected Unit Credit Method) as at the year end in respect of future payment of gratuities are charged against revenue every year.

Actuarial gains and losses are recognized immediately in the Statement of Profit and Loss.

c Compensated Absences

Accrued liability in respect of leave encashment benefit on retirement is accounted for on the basis of actuarial valuation (using the Projected Unit Credit Method ) as at the year end and charged to revenue every year.

Compensated absences benefits comprising of entitlement to accumulation of Sick Leave is provided for based on actuarial valuation at the end of the year.

Actuarial gains and losses are recognized immediately in the statement of Profit and Loss.

d Other Short Term Employee Benefits

Short Term Employee Benefits are recognised as an expense as per the Company''s schemes based on expected obligation on an undiscounted basis.

1.9 Research & Development Cess and Excise duty

Research & Development Cess and Excise Duty (wherever applicable) on manufactured goods are accounted for at the time of their clearance from the factory. Research and Development Cess and Excise Duty (wherever applicable) in respect of manufactured goods lying at the year end are included in inventory after creating suitable provision for the same.

1.10 Sales

Sales is stated net of sales tax. Sale is recognised on transfer of substantial risks and rewards of ownership in goods to the buyer.

1.11 Interest Income

Interest Income is recognised on a time proportion basis taking in to account the amount outstanding and the applicable interest rate.

1.12 Foreign Currency Transaction

Transactions in foreign currency are recorded at exchange rates prevailing on the date of the transaction. Monetary items denominated in foreign currency are restated at the exchange rate prevailing on the Balance Sheet date. Foreign currency non-monetary items carried in terms of historical cost are reported using the exchange rate at the date of the transactions. Exchange differences arising on settlement of transactions and/or restatements are dealt with in the Statement of Profit and Loss .

1.13 Derivative Instruments

The Company uses derivative financial instruments such as forward exchange contracts, to hedge its risks associated with foreign currency fluctuations. Derivative contracts outstanding at the Balance Sheet date are marked to market and resulting loss, if any, is provided for in the financial statements. Any profit or loss arising on cancellation of derivative instruments is recognised as income or expense for the period.

1.14 Taxation

Current tax is determined as the amount of tax payable in respect of taxable income for the year based on applicable tax rates and laws.

Deferred tax is recognized, on timing differences, being the difference 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 recognized unless there is reasonable certainty and virtual certainty in case of unabsorbed loss and depreciation, that sufficient future taxable income will be available against which such deferred tax assets will be realized. Deferred tax Assets is reviewed at each Balance Sheet date to reassess its realization.

1.15 Borrowing Cost

Borrowing costs are capitalized as part of the cost of qualifying assets when it is probable that they will result in future economic benefits to the enterprise and the costs can be measured reliably. Other borrowing costs are recognized as an expense in the period in which they are incurred.

1.16 Provisions and Contingent Liabilities

The Company recognises 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 amount 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.

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Mar 31, 2012

1.1 Basis of preparation

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India under the historical cost convention, except for certain tangible assets acquired before 31st March, 2010 which are carried at revalued amounts. These financial statements have been prepared to comply in all material aspects with the accounting standards notified under section 211 (3C) [ Companies ( Accounting Standards) Rules,2006, as amended] and other relevant provisions of the Companies Act, 1956.

All assets and liabilities have been classified as current or non-current as per Company's normal operating cycle and other criteria set out in the schedule VI to the Companies Act, 1956. Based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current - non current classification of assets and liabilities.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

1.2 Use of estimates

The preparation of financial statements in conformity with Indian GAAP requires the management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although these estimates are based on management's best knowledge of current events and actions, uncertainity about these assumptions and estimates could result in outcomes requiring a material adjustment to the carrying amounts of assets and liabilities in future periods.

1.3 Tangible Assets and Depreciation

a) All items of land, building and plant and machinery at company's factory at Bauria, Howrah are revalued and restated at valuation by an approved valuer at net replacement cost as at 31st March, 2010. The appreciation in the net book value of these assets over their book value has been credited to Revaluation reserve.

b) Other tangible assets are stated at cost of acquisition including inward freight, duties, taxes and expenses incidental to acquisition and installation.

c) Depreciation is provided at Straight line method at rates specified in Schedule XIV of the Companies Act, 1956. No depreciation is provided on Freehold Land.

d) Profit and Loss on disposal of tangible assets is recognised in the Statement of Profit and Loss.

e) An impairment loss is recognized where applicable when the carrying value of tangible asset exceeds its market value or value in use whichever is higher.

1.4 Intangible Assets and Amortization

a) Intangible assets are stated at cost of acquisition including duties, taxes and expenses incidental to acquisition and installation.

b) Intangible assets comprising of computer software is depreciated on straight line method over a period of five years.

c) Profit and Loss on disposal of Intangible assets is recognised in the statement of Profit and Loss.

d) An impairment loss is recognized where applicable when the carrying value of intangible asset exceeds its market value or value in use whichever is higher.

1.5 Investments

Long term investments are carried at cost after deducting provision, if any, for diminution in value considered to be other than temporary in nature.

Current investments are stated at lower of cost and fair value Dividend income is recognised when the right to receive dividend is established

1.6 Subsidy and Export incentive

Subsidy and export incentive are accounted for when no significant uncertainty exists regarding its collectibility. Subsidy / grant that relate to specific fixed assets are deducted from the cost of the relevant fixed asset. Subsidy receivable against any expenditure is recognized in the Statement of Profit and Loss. Subsidy received / receivable which is in the nature of promoters contribution i.e. they are given with reference to the total investment/capital outlay in an undertaking is credited to Capital Reserve.

1.7 Inventories

Raw materials, Stores and Spares parts and components are valued at cost (cost being determined on weighted average basis) or at net realizable value whichever is lower.

Semi-finished goods and stock-in-process are valued at raw materials cost plus labour and overheads apportioned on an estimated basis depending upon the stages of completion or at net realizable value whichever is lower.

Finished goods are valued at cost or at net realizable value whichever is lower. Cost includes all direct cost and applicable manufacturing and administrative overheads.

1.8 Employee Benefit

a) Defined Contribution Plans

The Company contributes to Provident Funds which are administered by duly constituted and approved independent Trust / Government and such contributions are charged against revenue every year. In respect of Provident Fund Contributions made to an independent Trust administered by the Company, the interest rate payable to the members of the Trust shall not be lower than the statutory rate of interest declared by the Central Government under the Employees Provident Funds and Miscellaneous Provisions Act, 1952 and shortfall if any shall be made good by the Company.

The Company operates a Superannuation Scheme for certain employees and contributions by the Company under the scheme, is charged against revenue every year.

b) Defined Benefit Plans

The Company provides for gratuity covering eligible employees in accordance with Payment of Gratuity Act, 1972.

Accrued liability determined based on actuarial valuation (using the Projected Unit Credit Method) as at the year end in respect of future payment of gratuities are charged against revenue every year.

Actuarial gains and losses are recognized immediately in the Statement of Profit and Loss.

c) Compensated absences

Accrued liability in respect of leave encashment benefit on retirement is accounted for on the basis of actuarial valuation (using the Projected Unit Credit Method) as at the year end and charged to revenue every year.

Compensated absences comprising of entitlement to accumulation of Sick Leave is provided for based on actuarial valuation at the end of the year.

d) Other Short Term Employee Benefits

Short Term Employee Benefits are recognised as an expense as per the Company's schemes based on expected obligation on an undiscounted basis.

1.9 Research & Development Cess and Excise Duty

Research & Development Cess and Excise Duty (wherever applicable ) on manufactured goods are accounted for at the time of their clearance from the factory. Research and Development Cess and Excise Duty (wherever applicable ) in respect of manufactured goods lying at the year end are included in inventory after creating suitable provision for the same.

1.10 Sales

Sales is stated net of sales tax. Sale is recognised on transfer of substantial risks and rewards of ownership in goods to the buyer.

1.11 Interest Income

Interest Income is recognised on a time proportion basis taking into account the amount outstanding and the applicable interest rate.

1.12 Foreign Currency Transaction

Transactions in foreign currency are recorded at exchange rates prevailing on the date of the transaction. Monetary items denominated in foreign currency are restated at the exchange rate prevailing on the Balance Sheet date. Foreign currency non-monetary items carried in terms of historical cost are reported using the exchange rate at the date of the transactions. Exchange differences arising on settlement of transactions and/ or restatements are dealt with in the Statement of Profit and Loss .

Derivative Instruments

The Company uses derivative financial instruments such as forward exchange contracts, currency swaps etc. to hedge its risks associated with foreign currency fluctuations relating to the underlying transactions, highly probable forecast transactions and firm commitments. In respect of Forward Exchange Contracts with underlying transactions, the premium or discount arising at the inception of such contract is amortised as expense or income over the life of contract. Other derivative contracts outstanding at the Balance Sheet date are marked to market and resulting loss, if any, is provided for in the financial statements. Any profit or losses arising on cancellation of derivative instruments are recognised as income or expenses for the period.

1.13 Taxation

Current tax is determined as the amount of tax payable in respect of taxable income for the year based on applicable tax rates and laws.

Deferred tax is recognized, on timing differences, being the difference between taxable incomes and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets are not recognized unless there is reasonable certainty and virtual certainty in case of unabsorbed loss and depreciation, that sufficient future taxable income will be available against which such deferred tax assets will be realized. Deferred tax assets is reviewed at each Balance Sheet date to reassess its realization.

1.14 Borrowing Cost

Borrowing costs are capitalized as part of the cost of qualifying assets when it is probable that they will result in future economic benefits to the enterprise and the costs can be measured reliably. Other borrowing costs are recognized as an expense in the period in which they are incurred.

1.15 Provisions and Contingent Liabilities

The Company recognises 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 amount 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.

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Mar 31, 2011

ACCOUNTING POLICY STATEMENT

The Financial Statements are prepared to comply in all material respects with all the applicable accounting principles in India, the applicable accounting standards notified u/s 211 (3C) of the Companies Act, 1956 and the relevant provisions of the Companies Act, 1956.

ACCOUNTING CONVENTION

The Accounts are prepared under the historical cost convention modified by the revaluation of certain fixed assets.

FIXED ASSETS AND DEPRECIATION

a) All items of land, buildings and plant and machinery at company's factory at Bauria, Howrah are revalued and restated at valuation by an approved valuer at current replacement cost as at 31st March, 2010. The appreciation in the net book value of these assets over their book value has been credited to Revaluation Reserve.

b) Other fixed assets are stated at cost of acquisition including inward freight, duties, taxes and expenses incidental to acquisition and installation.

c) Depreciation is provided at Straight line method at rates specified in Schedule XIV of the Companies Act, 1956. In respect of revalued assets, the incremental depreciation on account of revaluation is recouped from Revaluation Reserve. No depreciation is provided on Freehold Land.

d) Intangible assets comprising of computer software is depreciated on straight line method over a period of five years.

e) Profit & Loss on disposal of Fixed Assets is recognized in Profit & Loss Account.

f) An impairment loss is recognized where applicable when the carrying value of fixed asset exceeds its market value or value in use whichever is higher.

INVESTMENTS

Long term investments are carried at cost after deducting provision, if any, for diminution in value considered to be other than temporary in nature.

Current investments are stated at lower of cost and fair value.

Dividends are accounted for as and when declared.

SUBSIDY & EXPORT BENEFIT

Subsidy and Export Benefits are accounted for when no significant uncertainty exists regarding its collectibility. Subsidy / grant that relate to specific fixed assets are deducted from the cost of the relevant fixed asset. Subsidy receivable against any expenditure is recognized in the profit and loss account. Subsidy received / receivable which is in the nature of promoters contribution i.e. they are given with reference to the total investment/capital outlay in an undertaking is credited to Capital Reserve.

INVENTORIES

Raw Jute and Stores and Spare parts are valued at cost (cost being determined on weighted average basis) or at net realizable value whichever is lower.

Semi-finished goods and stock-in-process are valued at raw materials cost plus labour and overheads apportioned on an estimated basis depending upon the stages of completion or at net realizable value whichever is lower.

Finished goods are valued at cost or at net realizable value whichever is lower. Cost includes all direct cost and applicable manufacturing and administrative overheads.

EMPLOYEE BENEFITS

Defined Contribution Plans

The Company contributes to Provident Funds which are administered by duly constituted and approved independent Trust / Government and such contributions are charged against revenue every year. In respect of Provident Fund Contributions made to an independent Trust administered by the Company, the interest rate payable to the members of the Trust shall not be lower than the statutory rate of interest declared by the Central Government under the Employees Provident Funds and Miscellaneous Provisions Act, 1952 and shortfall if any shall be made good by the Company.

The Company operates a Superannuation Scheme for certain employees and contributions by the Company under the scheme, is charged against revenue every year.

Defined Benefit Plans

Accrued liability determined based on actuarial valuation as at the year end in respect of future payment of gratuities are charged against revenue every year.

Accrued liability in respect of leave encashment benefit on retirement is accounted for on the basis of actuarial valuation as at the year end and charged to revenue every year.

Long Term Employee Benefits

Accrued liability in respect of leave encashment benefit on retirement is accounted for on the basis of actuarial valuation as at the year end and charged to revenue every year.

Other long term employee benefits comprising of entitlement to accumulation of Sick Leave is provided for based on actuarial valuation carried out in accordance with revised Accounting Standard 15 as at the end of the year.

Short Term Employee Benefits

Short Term Employee Benefits are recognised as an expense as per the Company's schemes based on expected obligation on an undiscounted basis.

Actuarial gains and losses are recognized immediately in the Profit and Loss Account.

RESEARCH & DEVELOPMENT CESS AND EXCISE DUTY

Research & Development Cess and Excise Duty (wherever applicable) on manufactured goods are accounted for at the time of their clearance from the factory. Research and Development Cess and Excise Duty(wherever applicable) in respect of manufactured goods lying at the year end are included in inventory after creating suitable provision for the same.

SALES

Turnover is stated net of sales tax. Sale is recognised on transfer of property in goods to the buyer.

FOREIGN CURRENCY TRANSACTION

Transactions in foreign currency are recorded at exchange rates prevailing on the date of the transaction. Monetary items denominated in foreign currency are restated at the exchange rate prevailing on the Balance Sheet date. Foreign currency non- monetary items carried in terms of historical cost are reported using the exchange rate at the date of the transactions. Exchange differences arising on settlement of transactions and/or restatements are dealt with in the Profit and Loss Account.

Derivative Instruments

The Company uses derivative financial instruments such as forward exchange contracts, currency swaps etc. to hedge its risks associated with foreign currency fluctuations relating to the underlying transactions, highly probable forecast transactions and firm commitments. In respect of Forward Exchange Contracts with underlying transactions, the premium or discount arising at the inception of such contract is amortised as expense or income over the life of contract. Other Derivative contracts outstanding at the Balance Sheet date are marked to market and resulting loss, if any, is provided for in the financial statements. Any profit or losses arising on cancellation of derivative instruments are recognised as income or expenses for the period.

TAXATION

Current tax is determined as the amount of tax payable in respect of taxable income for the year based on applicable tax rates and laws.

Deferred tax is recognized, on timing differences, being the difference between taxable incomes and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets are not recognized unless there is reasonable certainty and virtual certainty in case of unabsorbed loss and depreciation, that sufficient future taxable income will be available against which such deferred tax assets will be realized. Deferred tax Assets is reviewed at each Balance Sheet date to reassess its realization.

Fringe benefit tax is determined as the amount of tax payable in respect of value of fringe benefits for the year based on applicable tax rates and laws.

BORROWING COSTS

Borrowing costs are capitalized as part of the cost of qualifying assets when it is probable that they will result in future economic benefits to the enterprise and the costs can be measured reliably. Other borrowing costs are recognized as an expense in the period in which they are incurred.

PROVISIONS AND CONTINGENT LIABILITIES

The Company recognises 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 amount 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.

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Mar 31, 2010

The Financial Statements are prepared to comply in all material respects with all the applicable accounting principles in India, the applicable accounting standards notified u/s 211 (3C) of the Companies Act, 1956 and the relevant provisions of the Companies Act, 1956

ACCOUNTING CONVENTION

The Accounts are prepared under the historical cost convention modified by the revaluation of certain fixed assets.

FIXED ASSETS AND DEPRECIATION

a) All items of land, buildings and plant and machinery at companys factory at Bauria, Howrah are revalued and restated at valuation by an approved valuer at current replacement cost as at 31st March, 2010. The appreciation in the net book value of these assets over their book value has been credited to Revaluation Reserve.

b) Other fixed assets are stated at cost of acquisition including inward freight, duties, taxes and expenses incidental to acquisition and installation.

c) Depreciation is provided at Straight line method at rates specified in Schedule XIV of the Companies Act, 1956. In respect of revalued assets, the incremental depreciation on account of revaluation is recouped from Revaluation Reserve. No depreciation is provided on Freehold Land.

d) Intangible assets comprising of computer software is depreciated on straight line method over a period of five years.

e) Profit & Loss on disposal of Fixed Assets is recognized in Profit & Loss Account.

f) An impairment loss is recognized where applicable when the carrying value of fixed asset exceeds its market value or value in use whichever is higher.

INVESTMENTS

Long term investments are carried at cost after deducting provision, if any, for diminution in value considered to be other than temporary in nature.

Current investments are stated at lower of cost and fair value.

Dividends are accounted for as and when declared.

SUBSIDY & EXPORT BENEFIT

Subsidy and Export Benefits are accounted for when no significant uncertainty exists regarding its collectibility. Subsidy / grant that relate to specific fixed assets are deducted from the cost of the relevant fixed asset. Subsidy receivable against any expenditure is recognized in the profit and loss account. Subsidy received / receivable which is in the nature of promoters contribution i.e. they are given with reference to the total investment/capital outlay in an undertaking is credited to Capital Reserve.

INVENTORIES

Raw Jute and Stores and Spare parts are valued at cost (cost being determined on weighted average basis) or at net realizable value whichever is lower.

Semi-finished goods and stock-in-process are valued at raw materials cost plus labour and overheads apportioned on an estimated basis depending upon the stages of completion or at net realizable value whichever is lower.

Finished goods are valued at cost or at net realizable value whichever is lower. Cost includes all direct cost and applicable manufacturing and administrative overheads.