Mar 31, 2018
NOTE 9A.2 TERMS / RIGHTS ATTACHED TO SHARES
a. Equity Shares
The Company has only one class of equity shares having a par value of '' 2 per share. Each holder of Equity Shares is entitled to one vote per share.
The Company declares and pays dividend in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing general meeting.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts.
The distribution will be in proportion to the number of equity shares held by the shareholders.
Pursuant to the Scheme of Amalgamation of Hi-Life Fabricators Private Limited (Transferor Company) and Mirza International Limited (Transferee Company) under Section 233 of the Companies Act, 2013 read with Rules made thereunder, approved by Regional Director- Northern Region, Ministery of Corporate Affairs vide its Order No. 233/32/ T-2/2017/10945 dated November 23, 2017, Authorized Share capital of the Transferee Company has been increased but there is no change in Issued, Subscribed and Paid up Share capital of the Company.
Note 9A.4 Information regarding issue of shares in the last five years
a. Shares allotted as fully paid up pursuant to scheme without payment being received in cash
1 Pursuant to the Scheme of Amalgamation of Genesis footwear Enterprises Private Limited with Mirza International Limited as approved by Honâble Allahabad High Court order dated December 15, 2015 12000000, 0% Compulsory Convertible Preference Shares (âCCPSâ) of Rs, 2 each fully paid converted into equity shares on April 01, 2016 which rank pari passu with the existing equity shares of the Company.
2 15600000 equity shares of Rs, 2 each fully paid were allotted on February 18, 2016 pursuant to the Scheme of amalgamation as approved by Honâble Allahabad High Court vide its order dated December 15, 2015.
b. The Company has not issued any bonus shares during the last five years.
c. The Company has not undertaken any buy back of shares.
The Board of Directors of the Company recommended a dividend of Rs, 0.90 per share (for the year ended March 31, 2017 - ordinary dividend Rs, 0.90 per share) be paid on fully paid equity shares. The equity dividend is subject to approval by shares holders at the Annual General Meeting and has not been included as a liability in these financial statements. The total equity dividend to be paid is Rs, 1083 Lakh (for the year ended March 31, 2017 - ordinary dividend Rs, 1083 Lakh). Income tax on proposed dividend being Rs, 223 Lakh (for the year ended March 31, 2017 - Rs, 221 Lakh).
''Secured by 1st Charge on Fixed Assets, created out of various Term Loans and block of assets charged to the bank from time to time for Term Loans and extension of charge on all current assets. Equitable mortgage of Land, Building, Plant & Machinery at Coâs Unit No.1 & 2, Kanpur Unnao Link Road, Unnao, Unit No.3 (Plot No. C-4,5, 36 & 37) Sector 59, NOIDA, Unit No.6 at Plot No.1A Sector Ecotech-1, Greater NOIDA Industrial Area, Gautam Budh Nagar, U.P., Plot at Sector 90, Noida.
All the above secured Loans are guaranteed by some of the Directors.
#Secured against the assets purchased under the arrangements.
''Secured By 1st Charge by way of Hypothecation on entire current assets, present & future including entire stocks of raw materials, stock in process, finished goods, stock-in-transit, domestic Book Debts, Loans and advances or any other security required for the purpose of execution of export orders received, lying in the companyâs god owns, warehouses or shipping agentsâ custody waiting dispatch / shipment / and / or in transit etc.
All the above secured Loans are guaranteed by some of the Directors.
3. The discount rate indicated above reflects the estimated timing and currency of benefit payments. It is based on the yields / rates available on applicable bonds as on the current valuation date.
4. The salary growth rate indicated above is the Companyâs best estimate of an increase in salary of the employees in future years, determined considering the general trend in inflation, seniority, promotions, past experience and other relevant factors such as demand and supply in employment market, etc.
5. Attrition rate indicated above represents the Companyâs best estimate of employee turnover in future (other than on account of retirement, death or disablement) determined considering various factors such as nature of business, retention policy, industry factors, past experience, etc.
Sensitivity Analysis
Significant actuarial assumptions for the determination of the define benefit obligation are discount rate, expected salary increase and mortality. The sensitivity analysis below have determine based on reasonably possible changes of the assumptions occurring at the end of the reporting period, while holding all other assumptions constant. The result of sensitivity analysis is given below:
* Includes Export incentive received on Export Notes :
(i) The Company is organized into two main business segments, namely:
Tannery Division - Manufacturing Finished Leather from Raw Hides, Wet Blue & Crust. Shoe Division - Manufacturing Finished Leather Shoes.
Segments have been identified and reported considering the distinct nature of products and differing risks and returns accruing there from, the organization structure, and the internal financial reporting systems.
(ii) Segmental Revenue in each of the above business segments primarily include domestic and export sales, export incentives and other miscellaneous income and also includes inter Segment transfers, priced at cost plus a predetermined rate of profit.
(iii) The Segmental Revenue in the geographical segments considered for disclosure are as follows:
(a) Revenue within India includes sales to customers located within India and earnings in India.
(b) Revenue outside India includes sales to customers located outside India and earnings outside India.
(iv) Segmental Revenue, Results, Assets and Liabilities include the respective amounts identifiable to each of the segments and amounts allocated on a reasonable basis.
NOTE 32 INCOME TAX
A) The Company has recognized and accounted for cumulative net deferred tax liability in accordance with Accounting Standard (IND AS-12) issued by the Institute of Chartered Accountants of India, âAccounting for Taxes on Incomeâ in respect of net aggregate timing differences as on 31 Mar, 2018.
NOTE 33 FORWARD CONTRACTS
Forward Exchange Contracts enetred into by the Company and outstanding as at Balance Sheet date Forward contracts EURO INR 28.01 Lakh (16.46 Lakh) Sell Hedging
Forward contracts GBP INR 116.88 Lakh (94.77 Lakh) Sell Hedging
Forward contracts USD INR 109.70 Lakh (62.93 Lakh) Sell Hedging
NOTE 34 Figures of previous year have been regrouped/ rearranged wherever necessary to make them comparable with the figures of current year.
NOTE 35 IND AS 115, REVENUE FROM CONTRACT WITH CUSTOMERS:
On 28 March 2018, the MCA has notified the Ind AS 115, Revenue from Contract with Customers. The core principle of the new standard is that an entity should recognize
revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Further, the new standard requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entityâs contracts with customers. The standard permits two possible methods of transition :
- Retrospective approach - Under this approach the standard will be applied retrospectively to each prior reporting period presented in accordance with Ind AS 8, Accounting, Policies, Changes in Accounting, Estimates and Errors.
- Retrospectively with cumulative effect of initially applying the standard recognized at the date of initial application (Cumulative catch-up approach) The effective date for adoption of Ind AS 115 is financial periods beginning on or after April 01, 2018. The Group will adopt the standard on April 01, 2018 by using the cumulative catch-up transition method and accordingly, comparatives for the year ending or ended March 31, 2018 will not be retrospectively adjusted. The effect on adoption of Ind AS 115 is expected to be insignificant.
NOTE 36 COMPANY OVERVIEW AND SIGNIFICANT ACCOUNTING POLICIES:
A) COMPANY OVERVIEW:
Mirza International Limited (âThe Companyâ) is a public limited company incorporated in India and listed on Bombay Stock Exchange and National Stock Exchange and having its registered office located at 14/6, Civil Lines, Kanpur-208001, Uttar Pradesh, India. The Company is a leading manufacturer & exporter of finished leather, Footwear and trader of footwear and apparels.
B) STATEMENT OF COMPLIANCE:
These standalone financial statements have been prepared & comply in all material aspects with Indian Accounting Standards (âInd ASâ) notified under section 133 of the Companies Act, 2013 read with the Companies (Indian Accounting Standards) Rules,
2015, as amended thereof & other relevant provisions of the Act. The financial statements upto the year ended March 31, 2017 were prepared in accordance with accounting standards notified under the Companies (Accounting Standards) Rules, 2016 (as amended) and other relevant provisions of the Act.
These financial statements are the Companyâs first Ind AS financial statements. The date of transitions to Ind AS is April 01, 2016.
(Refer Note A for the explanation of transition to Ind AS including the details of First Time adoption exemptions availed by the company.
C) BASIS OF PREPARATION OF FINANCIAL STATEMENTS
These standalone financial statements are prepared under the historical cost convention on the accrual basis except for certain financial instruments which are measured at fair values at the end of each reporting period, as explained in the accounting policies below.
Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an ordinarily transactions between market participants at the measurement date.
Fair value measurement under Ind AS are categorized as below based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety:
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company can access at measurement date;
Level 2 inputs are inputs, other than quoted prices included in level 1, that are observable for the assets or liability, either directly or indirectly; and
Level 3 inputs are unobservable inputs for the valuation of assets/liabilities.
D) USE OF ESTIMATES AND JUDGEMENT:
The preparation of the financial statements requires the Management to make certain estimates, judgments and assumptions. These estimates, judgments and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the period. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Accounting estimates could change from period to period. Actual results may differ from these estimates.
This note provides an overview of the areas that involved a higher degree of judgment or complexity and of items which are more likely to be materially adjusted due to estimates and assumptions turning out to be different than those originally assessed. Detailed information about each of these estimates and judgments is included in the relevant notes together with information about the basis of calculation for each affected line item in the financial statements.
E) PLANT AND EQUIPMENT:
1. Freehold Land is carried at historical cost. All other items of Property, Plant and Equipment of the Company are valued at cost of acquisition or construction net of recoverable taxes, trade discounts and rebates less accumulated depreciation and impairment loss, if any. The cost of fixed assets includes purchase price, borrowing cost, allocated / apportioned direct and indirect expenses incurred in relation to bringing the fixed assets to its working condition for its intended life. The said cost is not reduced by specific Grants/ subsidy received against the assets.
Subsequent costs are included in the assetâs carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of any component accounted for as separate asset is derecognized when replaced. All other repairs and maintenance are charged to Profit or Loss during the reporting period in which they are incurred.
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in profit or loss within other gains/(losses).
2. Capital Work in Progress - All costs attributable to the assets or incurred in relation to the assets under completion are aggregated under Capital work in progress to be allocated to individual assets on completion.
3. Lease hold land is capitalized with the lease premium paid, direct expenses/interest allocable to it till it is put to use
F) DEPRECIATION & AMORTIZATION
1. Depreciation on tangible fixed assets is provided to the extent of depreciable amount on the basis of Straight Line Method (SLM). For reaching to the depreciable amount of the assets, useful life of the assets has been taken as per the provisions of Part A of Schedule II of the Companies Act, 2013.
2. Lease hold land are amortized over the useful life remaining from the date, it put to use.
G) BORROWING AND BORROWING COST:
Borrowings are initially recognized at fair value, net of transaction cost incurred. Borrowings are subsequently measured at amortized cost. Any difference between the proceeds (net of transaction cost) and the redemption amount is recognized in profit or loss over the period of the borrowings, using the effective interest method. Fees paid on the established loan facilities are recognized as transaction cost of the loan, to the extent that it is probable that some or all the facility will be drawn down.
Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the reporting period. Costs that are attributable to the acquisition, construction or production of qualifying assets are capitalized as part of cost of such assets, all other Borrowing cost are charged to the Statement of Profit & Loss. Borrowing costs comprise of interest and other costs incurred in connection with borrowing of funds.
H) LEASES:
1. Finance Leases: Assets acquired under finance leases, which effectively transfer to the Company substantially all the risks and benefits incidental to ownership of the leased item, are capitalized at the lower of the fair value and present value of the minimum lease payment at the inception of the leased term and disclosed as leased assets. Lease payments are apportioned between the finance charges and the reduction of the leased liability so as to achieve a constant rate of interest on the remaining balance of the liability.
2. Operating Leases: Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Company as lessee, are classified as operating lease. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease.
I) INVESTMENTS:
Long term investments are valued at carrying cost.
Diminution in the value of Long Term Investments is recognized only if the same is, in the opinion of the management, of a permanent nature.
J) INVENTORIES:
Inventories are valued at the lower of Historic Cost or the Net Realizable Value. Costs are determined as under:
1. Bought Out Items: On First in First Out (FIFO) method except raw hides (which is valued at six months average purchase price in case of Indigenous hides and full period weighted average price in case of imported hides). In respect of bought out items where Input Tax Credit is permitted all recoverable taxes are excluded from purchase price for determining the cost.
2. Goods in Process: At cost plus estimated value addition/cost of conversion at each major stage of production.
3. Finished Goods: At direct cost plus allocation of overheads (including interest on working capital) other than Marketing, Selling & Distribution Expenses and Interest on Term Loan.
K) FOREIGN CURRENCY TRANSACTIONS
(i) The functional currency and presentation currency of the company is Indian Rupee.
(ii) Transactions in currencies other than the companyâs functional currency are recorded on initial recognition using the exchange rate at the transaction date. At each Balance Sheet date, foreign currency monetary items are reported using the closing rate. Exchange differences that arise on settlement of monetary items or on reporting of monetary items at each Balance Sheet date at the closing spot rate are recognized in the Statement of Profit &Loss in the year in which they arise except for:
A. exchange differences on foreign currency borrowings relating to assets under construction for future productive use, which are included in the cost of those assets when they are regarded as an adjustment to interest costs on those foreign currency borrowings; and
B. exchange differences on transactions entered into in order to hedge certain foreign currency risks.
L) DERIVATIVE INSTRUMENTS AND HEDGE ACCOUNTING
Cash flow hedges
The effective portion of changes in fair value of derivatives that are designated and qualify as cash flow hedges is recognized in other comprehensive income and accumulated under the heading of cash flow hedging reserve. The gain or loss relating to the ineffective portion is recognized immediately in profit or loss.
Amounts previously recognized in other comprehensive income and accumulated in equity relating to effective portion as described above are reclassified to profit or loss in the periods when the hedged item affects profit or loss, in the same line as the recognized hedged item. However, when the hedged forecast transaction results in the recognition of a non- financial asset or a non-financial liability, such gains or losses are transferred from equity (but not as a reclassification adjustment) and included in the initial measurement of the cost of the non-financial asset or non-financial liability.
Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or when it no longer qualifies for hedge accounting. Any gain or loss recognized in other comprehensive income and accumulated in equity at that time remains in equity and is recognized when the forecast transaction is ultimately recognized in profit or loss. When a forecast transaction is no longer expected to occur, the gain or loss accumulated in equity is recognized immediately in profit or loss.
M) REVENUE RECOGNITION:
Sale of Goods and Export Incentives- Revenue is recognized only when it can be reliably measured and it is reasonable to expect ultimate collection. Revenue in respect of contracts for services is recognized when the services are rendered and related costs are incurred.
Other Income:
a) Interest income is recognized on time proportion basis taking in to account the amount outstanding and rate applicable.
b) Dividend from investment is recognized when right to receive is established.
N) RECEIVABLES:
Receivables are disclosed in Indian currency equivalent of actually invoiced values Receivables covered by bills of exchange purchased by the Companyâs bankers are neither shown as assets nor liabilities. Contingent liability in the event of non-payment of the same is reflected in the Notes to the Accounts.
O) EMPLOYEE BENEFITS:
a) Short Term Employee Benefits
Short term employee benefits expected to be paid in exchange for the services rendered by employees are recognized as an expense during the period when the employees render services. The Company, as a policy, doesnât encourage accumulation of earned leave and discharges its liability on a year to year basis.
b) Post-Employment Benefits
The Company makes regular contributions to Provident Fund and the Companyâs contribution is recognized as an expense in the Statement of Profit & Loss during the period in which employee renders the related services. The liability of the Company for gratuity is actuarially valued at each year end and based on such yearend actuarial valuation, the liability for gratuity is provided in the books of the Company.
P) TAXES ON INCOME:
Provision for Income Tax comprises of Current Tax,
i.e. tax on the taxable income computed for the year as per Tax laws and the net change in the deferred tax assets / liability of the Company during the current year. Deferred tax assets / liabilities are recognized on the basis of timing difference in Tax treatment of Revenue Item. The timing differences are subjected to
the extent provision of law and enacted tax rates in force to determine the Deferred Tax Asset/liability.
While a Deferred tax liability is recognized when computed, the management exercises prudence and conservatism while recognizing Deferred Tax Assets.
Q) EARNINGS PER SHARE:
Basic earnings per equity share are computed by dividing the net profit attributable after tax to the equity holders of the Company by the weighted average number of equity shares outstanding during the period. Diluted earnings per equity share are computed by dividing the net profit after tax attributable to the equity holders of the Company by the weighted average number of equity shares considered for deriving basic earnings per equity share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares.
The Dilutive potential equity shares are deemed converted as of the beginning of the period, unless issued at a later date. Dilutive potential equity shares are determined independently for each period presented.
R) PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:
Provision:
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 and a reliable estimate can be made.
Contingent Liabilities:
Wherever there is a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity or a present obligation that arises from past events but is not recognized because
(a) i t is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or
(b) the amount of the obligation cannot be measured with sufficient reliability. Show cause notices are not considered as Contingent Liabilities unless converted into demand.
Contingent Asset:
Contingent asset are neither recognized nor disclosed in the financial statements
S) EVENTS AFTER THE REPORTING PERIOD:
It is the Companyâs Policy to take in to the account the impact of any significant event that occurs after the reporting date but before the finalization of accounts
T) GOVERNMENT GRANTS:
Grants from the government are recognized at their fair value where there is a reasonable assurance that the grant will be received and the Company will comply with all attached conditions.
Government grants receivable as compensation for expenses or financial support are recognized in profit or loss of the period in which it becomes available.
Government grants relating to the purchase of property, plant and equipment are accounted for as deferred Income by crediting the same to a specific reserve and are credited to profit or loss on a straight-line basis over the expected lives of the related assets and presented within other income.
The reserve to these Grants is diminished every year by a prorate portion of the depreciation of the assets, to amortize the grant overdue life of the assets. Where the Grants carry conditions of specific performance, the contingent aspect is disclosed in due notes to the accounts.
U) IMPAIRMENT OF TANGIBLE & INTANGIBLE ASSETS:
At the end of each reporting period, the Company reviews the carrying amounts of its tangible & intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists the recoverable amount of the asset is estimated in order to determine the extent of impairment loss (if any).
Where it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. The recoverable value is the higher of the assetsâ net selling price and value in use.
I f the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognized immediately in the statement of Profit & Loss, unless the relevant asset is carried at the revalued amount, in which case the impairment loss is treated as revaluation decrease.
When an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceeds the carrying amount that would have been determine, had no impairment loss being recognized for the asset in prior years. A reversal of impairment loss is recognized immediately in statement of Profit or Loss.
V) Operating Cycle for current and Non-Current Classification
Operating cycle for the business activities of the company covers the duration of the specific product line/ service including the defect liability period wherever applicable and extends up to the realization of receivables within the agreed credit period normally applicable to the respective lines of business.
Mar 31, 2017
Note 38 SIGNIFICANT ACCOUNTING POLICIES A) BASIS OF ACCOUNTING:
The financial statements have been prepared and presented under the historical cost convention on the accrual basis of accounting and comply with the Generally accepted Accounting Principles in India (Indian GAAP), including Accounting Standards notified under the Companies Act, 2013 and other pronouncements of the Institute of Chartered Accountants of India (ICAI) and the relevant provisions of the Companies Act, 2013.
B) USE OF ESTIMATES:
The preparation of financial statements in conformity with generally accepted accounting principles require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amount of revenue and expenses during the reported period. The estimates and assumptions used in the accompanying financial statements are based upon managementâs evaluation of the relevant facts and circumstances as of the date of the financial statements. Actual result could differ from those estimates. Any revision to financial estimates is recognized prospectively in the financial statements when revised.
C) FIXED ASSETS:
a) Fixed assets of the company are valued at cost net of recoverable taxes, trade discounts and rebates less accumulated depreciation and impairment loss, if any. The cost of fixed assets includes purchase price, borrowing cost, allocated / apportioned direct and indirect expenses incurred in relation to bringing the fixed assets to its working condition for its intended life. The said cost is not reduced by specific Grants/ subsidy received against the assets.
b) Capital Work in Progress - All costs attributable to the assets or incurred in relation to the assets under completion are aggregated under Capital work in progress to be allocated to individual assets on completion.
c) Lease hold land is capitalized with the lease premium paid, direct expenses/interest allocable to it till it is put to use.
D) DEPRECIATION & AMORTIZATION
a) Depreciation on fixed assets is provided to the extent of depreciable amount on the Straight Line Method (SLM). For reaching to the depreciable amount of the assets, useful life of the assets has been taken as per the provisions of Schedule II of the Companies Act, 2013.
b) Lease hold land are amortized over the useful life remaining from the date, it put to use.
E) BORROWING COST:
Borrowing costs that are attributable to the acquisition, construction or production of qualifying assets are capitalized as part of cost of such assets, all other Borrowing cost are charged to the Statement of Profit & Loss. Borrowing costs comprise of interest and other costs incurred in connection with borrowing of funds.
F) LEASES:
a) Assets acquired under finance leases, which effectively transfer to the Company substantially all the risks and benefits incidental to ownership of the leased item, are capitalized at the lower of the fair value and present value of the minimum lease payment at the inception of the leased term and disclosed as leased assets. Lease payments are apportioned between the finance charges and the reduction of the leased liability so as to achieve a constant rate of interest on the remaining balance of the liability.
b) Operating Leases: Rentals are charges to the Statement of profit & loss with reference to the lease terms and other considerations.
G) INVESTMENTS:
Long term investments are valued at cost. Diminution in the value of Long Term Investments is recognized only if the same is, in the opinion of the management, of a permanent nature.
H) INVENTORIES:
Inventories are valued at the lower of Historic cost or the Net Realizable Value. Costs are determined as under:
a) Bought Out Items
On First in First Out (FIFO) method except raw hides (valued at six months average purchase price in case of Indigenous hides and full period weighted average price in case of imported hides). In respect of bought out items where CENVAT CREDIT is permitted excise duty is excluded from purchase price for determining the cost.
b) Goods in Process:
At cost plus estimated value addition/cost of conversion at each major stage of production.
c) Finished Goods:
At direct cost plus allocation of overheads (including interest on working capital) other than Marketing, Selling & Distribution Expenses and Interest on Term Loan.
I) FOREIGN CURRENCY TRANSACTIONS
All foreign Currency transaction of purchase and sales are recorded at exchange rate prevailing on the date of the transaction (that closely approximate the rate at the date of transaction). Any income or expense on account of exchange difference either on settlement or on translation is recognized in the statement of Profit & Loss except in case of long term liabilities, where exchange difference arising till the assets are ready for their intend ant use, are adjusted to the cost of fixed assets:
J) DERIVATIVE INSTRUMENTS AND HEDGE ACCOUNTING
The Company uses foreign exchange forward contracts and options to hedge its exposure to movements in foreign exchange rates. These foreign exchange forward contracts and options are not used for trading or speculation purposes. The accounting policies for forwards contracts and options are based on whether they meet the criteria for designation as effective cash flow hedges. To designate a forward contract of option as an effective cash flow hedge, the Company objectively evaluates with appropriate supporting documentation at the inception of the each contract whether the contract is effective in achieving offsetting cash flows attributable to the hedged risk. Effective hedge is generally measured by comparing the cumulative change in the fair value of the hedge contract with a cumulative change in the fair value of the hedged item.
For forward contracts of options that are designated as effective cash flow hedges, the gain or loss from the effective portion of the hedge is recorded and reported directly in the shareholdersâ fund (under the head âHedging Reserveâ) and are reclassified into the profit and loss account upon the occurrence of the hedged transactions.
The gain/loss on options designated as effective Cash flow hedges are included along with the underlying hedged forecasted transactions. The Company recognizes gains or losses from change in fair values of forward contracts and options that are not designated as effective cash flow hedge for accounting purposes in the profit and loss account in the period the fair value changes occur.
K) REVENUE RECOGNITION :
Sale of Goods and Export Incentives-Revenue is recognized only when it can be reliably measured and it is reasonable to expect ultimate collection. Revenue in respect of contracts for services is recognized when the services are rendered and related costs are incurred.
Other Income:
a) Interest income is recognized on time proportion basis taking in to account the amount outstanding and rate applicable.
b) Dividend for investment is recognized when right to receive is established.
L) RECEIVABLE:
Receivables are disclosed in Indian currency equivalent of actually invoiced values Receivables covered by bills of exchange purchased by the Companyâs bankers are neither shown as assets nor liabilities. Contingent liability in the event of nonpayment of the same is reflected in the Notes to the Accounts.
M) EMPLOYEE BENEFITS :
a) Short Term Employee Benefits
Short term employee benefits expected to be paid in exchange for the services rendered by employees are recognised as an expense during the period when the employees render services. The company, as a policy, doesnât encourage accumulation of earned leave and discharges its liability on a year to year basis.
b) Post-Employment Benefits
The Company makes regular contributions to Provident Fund and the Companyâs contribution is recognized as an expense in the Statement of Profit & Loss during the period in which employee renders the related services. The liability of the Company for gratuity is actuarially valued at each year end and based on such yearend actuarial valuation, the liability for gratuity is provided in the books of the Company.
N) INCOME TAX:
Provision for Income Tax comprises of Current Tax, i.e. tax on the taxable income computed for the year as per Tax laws and the net change in the deferred tax assets / liability of the company during the current year. Deferred tax assets / liabilities are recognized on the basis of timing difference in Tax treatment of Revenue Item. The timing differences are subjected to the extant provision of law and enacted tax rates in force to determine the Deferred Tax Asset / liability. While a deferred tax liability is recognized when computed, the management exercises prudence and conservatism while recognizing deferred Tax Assets.
O) EARNINGS PER SHARE:
Earnings per share is calculated in accordance with the procedure laid out in the relevant Accounting Standard (AS-20)notified under the relevant provisions of Companies Act, 2013
P) PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:
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 and a reliable estimate can be made. Contingent losses & / or consequential contingent liabilities are disclosed in the notes to the accounts, where the company is reasonably assured that no loss / liability will arise but where the possibility of a loss/ liability does exist. Contingent asset are neither recognized nor disclosed in the financial statements.
Q) EVENTS OCCURRING AFTER THE BALANCE SHEET DATE:
It is the Companyâs Policy to take in to the account the impact of any significant event that occurs after the Balance Sheet date but before the finalization of accounts.
R) GOVERNMENT GRANTS:
Government Grants in respect of Fixed Assets are accounted for as deferred Income by crediting the same to a specific reserve. The reserve to these Grants is diminished every year by a prorate portion of the depreciation of the assets, to amortize the grant overdue life of the assets. Where the Grants carry conditions of specific performance, the contingent aspect is disclosed in due notes to the accounts.
S) IMPAIRMENT OF ASSETS:
An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is increased/ reversed where there has been change in the estimate of recoverable value. The recoverable value is the higher of the assetsâ net selling
Mar 31, 2015
(A) Basis of Accounting
The financial statements have been prepared and presented under the
historical cost convention on the accrual basis of accounting and
comply with the Generally Accepted Accounting Principles in India
(Indian GAAP), including Accounting Standards notified under the
relevant provisions of the Companies Act, 2013 and other pronouncements
of the Institute of Chartered Accountants of India (ICAI), and the
relevant provisions of the Companies Act, 2013, to the extent
applicable.
(B) Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles require management to make estimates and
assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent liabilities at the date of the financial
statements and the reported amount of revenue and expenses during the
reported period. The estimates and assumptions used in the accompanying
financial statements are based upon management's evaluation of the
relevant facts and circumstances as of the date of the financial
statements. Actual result could differ from those estimates. Any
revision to financial estimates is recognized prospectively in the
financial statements when revised.
(C) Fixed Assets
(a) Fixed assets of the Company are valued at cost net of recoverable
taxes, trade discounts and rebates less accumulated depreciation and
impairment loss, if any. The cost of fixed assets includes purchase
price, borrowing cost, allocated / apportioned direct and indirect
expenses incurred in relation to bringing the fixed assets to its
working condition for its intended life. The said cost is not reduced
by specific Grants/ subsidy received against the assets.
(b) Lease hold land is capitalized with the lease premium paid,direct
expenses/interest allocable to it till it is put to use.
(D) Depreciation & Amortization
a) Depreciation on fixed assets is provided to the extent of
depreciable amount on the Straight Line Method (SLM). For reaching to
the depreciable amount of the assets, useful life of the assets has
been taken as per the provisions of Schedule II of the Companies Act,
2013.
b) Lease hold land are amortised over the useful life remaining from
the date, it put to use.
(E) Borrowing Cost
Borrowing costs that are attributable to the acquisition, construction
or production of qualifying assets are capitalized as part of cost of
such assets, all other Borrowing cost are charged to the Statement of
Profit & Loss. Borrowing costs comprise of interest and other costs
incurred in connection with borrowing of funds.
(F) Leases
a) Assets acquired under finance leases, which effectively transfer to
the Company substantially all the risks and benefits incidental to
ownership of the leased item, are capitalized at the lower of the fair
value and present value of the minimum lease payment at the inception
of the leased term and disclosed as leased assets. lease payments are
apportioned between the finance charges and the reduction of the leased
liability so as to achieve a constant rate of interest on the remaining
balance of the liability.
b) Operating Leases: Rentals are charges to the Statement of Profit &
Loss on a straight line basis with reference to the lease terms and
other considerations.
(G) Investments
Long term investments are valued at cost.
The Cost of Investments made in Foreign Currency is translated at rates
prevailing on the Balance Sheet date unless temporary in nature and
gain/loss if any is accumulated in Foreign Currency Translation
Reserve.
Diminution in the value of Long Term Investments is recognized only if
the same is, in the opinion of the management, of a permanent nature.
(H) Inventories
Inventories are valued at the lower of Historic cost or the Net
Realisable Value. Costs are determined as under :
a. Bought Out Items :
On First in First Out (FIFO) method except raw hides (valued at six
months average purchase price in case of Indigenous hides and full
period weighted average price in case of imported hides). In respect of
bought out items where CENVAT CREDIT is permitted excise duty is
excluded from purchase price for determining the cost.
b. Goods in Process :
At cost plus estimated value addition/cost of conversion at each major
stage of production.
c. Finished Goods :
At direct cost plus allocation of all overheads (including interest on
working capital) other than Marketing, Selling & Distribution Expenses
and Interest on Term Loan.
(I) Foreign Currency Transactions
All Foreign Currency Transaction of purchase and sales are recorded at
exchange rate prevailing on the date of the transaction. Any income or
expense on account of exchange difference either on settlement or on
translation is recognized in the statement of Profit & Loss except in
case of long term liabilities, where they relates to acquisition of
fixed assets, in which case they are adjusted to the carrying cost of
such assets.
(J) Derivative instruments and hedge accounting
The Company uses foreign exchange forward contracts and options to
hedge its exposure to movements in foreign exchange rates. These
foreign exchange forward contracts and options are not used for trading
or speculation purposes. The Accounting Policies for forwards
contracts and options are based on whether they meet the criteria for
designation as effective cash flow hedges. To designate a forward
contract of option as an effective cash flow hedge, the Company
objectively evaluates with appropriate supporting documentation at the
inception of the each contract whether the contract is effective in
achieving offsetting cash flows attributable to the hedged risk.
Effective hedge is generally measured by comparing the cumulative
change in the fair value of the hedge contract with a cumulative change
in the fair value of the hedged item.
For forward contracts of options that are designated as effective cash
flow hedges, the gain or loss from the effective portion of the hedge
is recorded and reported directly in the shareholders' fund (under the
head 'Hedging Reserve" ) and are reclassified into the profit and loss
account upon the occurrence of the hedged transactions.
The gain/loss on options designated as effective cash flow hedges are
included along with the underlying hedged fore casted transactions. The
Company recognizes gains or losses from change in fair values of
forward contracts and options that are not designated as effective cash
flow hedge for accounting purposes in the profit and loss account in
the period the fair value changes occur.
(K) Revenue Recognition :
Revenue is recognized only when it can be reliably measured and it is
reasonable to expect ultimate collection. It includes sale of goods,
export incentives etc. Revenue arising from the use by others of
enterprises resources yielding interest, dividends, are recognized on
the following basis :
a) Interest income is recognized on time proportion basis taking in to
account the amount outstanding and rate applicable.
b) Dividend for investment is recognized when right to receive is
established.
(L) Receivables
Receivables are disclosed in Indian currency equivalent of actually
invoiced values. Receivables covered by bills of exchange purchased by
the Company's bankers are neither shown as assets nor liabilities.
Contingent liability in the event of non payment of the same is
reflected in the Notes to the Accounts.
(M) Employee Benefits :
Short Term Employee Benefits
Short term employee benefits expected to be paid in exchange for the
services rendered by employees are recognsed as an expense during the
period when the employees render services. The Company, as a Policy,
doesn't encourage accumulation of earned leave and discharges its
liability on a year to year basis.
Post-Employment Benefits
The Company makes regular contributions to Provident Fund and the
Company's contribution is recognised as an expense in the Statement of
Profit & Loss during the period in which employee renders the related
services. The liability of the Company for gratuity is actuarially
valued at each year end and based on such year end valuation , the
liability for gratuity is provided in the books of the Company.
(N) income Tax:
Provision for Income Tax comprises of Current Tax, i.e. tax on the
taxable income computed for the year as per Tax laws and the net change
in the deferred tax assets / liability of the Company during the
current year. Deferred tax assets / liabilities are recognized on the
basis of timing difference in Tax treatment of Revenue Item. The timing
differences are subjected to the extant provision of law and enacted
tax rates in force to determine the Deferred Tax Asset / liability.
While a deferred tax liability is recognized when computed, the
management exercises prudence and conservatism while recognizing
deferred Tax Assets.
(O) Earnings Per Share:
Earnings Per Share is calculated in accordance with the procedure laid
out in the relevant Accounting Standard (AS-20) issued by The Institute
of Chartered Accountants of India.
(P) Provisions, Contingent Liabilities and Continent Assets:
Provision is recognised 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 and a
reliable estimate can be made. Contingent losses & / or consequential
contingent liabilities are disclosed in the notes to the accounts,
where the Company is reasonably assured that no loss / liability will
arise but where the possibility of a loss/ liability does exist.
Contingent asset are neither recognised nor disclosed in the financial
statements.
(Q) Events Occurring after the Balance Sheet date:
It is the Company's Policy to take in to the account the impact of any
significant event that occurs after the Balance Sheet date but before
the finalization of accounts.
(R) Government Grants:
Government Grants in respect of Fixed Assets are accounted for as
deferred Income by crediting the same to a specific reserve. The
reserve to these Grants is diminished every year by a prorate portion
of the depreciation of the assets, to amortise the grant over due life
of the assets. Where the Grants carry conditions of specific
performance, the contingent aspect is disclosed in due notes to the
accounts.
(S) Impairment of Assets
An asset is treated as impaired when the carrying cost of assets
exceeds its recoverable value. An impairment loss is charged to the
Statement of Profit and Loss in the year in which an asset is
identified as impaired. The impairment loss recognised in prior
accounting period is increased/ reversed where there has been change in
the estimate of recoverable value. The recoverable value is the higher
of the assets' net selling price and value in use.
(T) Figures of previous year have been regrouped/rearranged wherever
necessary to make them comparable with the figures of current year.
Mar 31, 2014
(A) Basis of Accounting
The fi nancial statements have been prepared and presented under the
historical cost convention on the accrual basis of accounting and
comply with the Accounting Standards as specifi ed in the Companies
(Accounting Standards) Rules, 2006, other pronouncements of the
Institute of Chartered Accountants of India (ICAI), and the relevant
provisions of the Companies Act, 1956 and guidelines issued by the
Securities and Exchange Board of India, to the extent applicable.
(B) Use of Estimates
The preparation of fi nancial statements in conformity with generally
accepted accounting principles require management to make estimates and
assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent liabilities at the date of the fi nancial
statements and the reported amount of revenue and expenses during the
reported period. The estimates and assumptions used in the accompanying
fi nancial statements are based upon management''s evaluation of the
relevant facts and circumstances as of the date of the fi nancial
statements. Actual result could differ from those estimates. Any
revision to fi nancial estimates is recognized prospectively in the fi
nancial statements when revised.
(C) Fixed Assets
(a) Fixed assets of the company are valued at cost which include
allocation/apportionment of direct and indirect expenses incurred in
relation to such fi xed assets . The said cost is not reduced by
specifi c Grants/ subsidy received against the assets.
(b) Lease hold land is capitalized with the lease premium paid,direct
expenses/interest allocable to it till it is put to use.
(D) Depreciation & Amortization
a) Depreciation on fi xed assets including assets acquired on lease is
provided on Straight Line Method at the rates and in the manner
prescribed in Schedule XIV to the Companies Act, 1956.
b) Lease hold land are amortised over the useful life remaining from
the date, it put to use.
(E) Borrowing Cost
Borrowing costs that are attributable to the acquisition, construction
or production of qualifying assets are capitalized as part of cost of
such assets. Borrowing costs comprise of interest and other costs
incurred in connection with borrowing of funds.
(F) Leased Assets
Assets acquired under fi nance leases, which effectively transfer to
the Company substantially all the risks and benefi ts incidental to
ownership of the leased item, are capitalized at the lower of the fair
value and present value of the minimum lease payment at the inception
of the leased term and disclosed as leased assets. lease payments are
apportioned between the fi nance charges and the reduction of the
leased liability so as to achieve a constant rate of interest on the
remaining balance of the liability.
(G) Investments
Long term investments are valued at cost.
The Cost of Investments made in Foreign Currency is translated at rates
prevailing on the Balance Sheet date unless temporary in nature and
gain/loss if any is accumulated in Foreign Currency Translation
Reserve.
Diminution in the value of Long Term Investments is recognized only if
the same is, in the opinion of the management, of a permanent nature.
(H) Inventories
Inventories are valued at the lower of Historic cost or the Net
Realisable Value. Costs are determined as under :
a. Bought Out Items : On First in First Out (FIFO) method except raw
hides (valued at six months average purchase price incase of Indigenous
hides and full year weighted average price in case of imported hides).
In respect of bought out items where CENVAT CREDIT is permitted excise
duty is excluded from purchase price for determining the cost.
b. Goods In Process : At cost plus estimated value addition/cost of
conversion at each major stage of production.
c. Finished Goods : At direct cost plus allocation of all overheads
(including interest on working capital) other than Marketing, Selling &
Distribution Expenses and Interest on Term Loan.
(I) Foreign Currency Transactions
(a) All foreign Currency transaction of purchase and sales are recorded
at exchange rate prevailing on the date of the transaction. Any income
or expense on account of exchange difference either on settlement or on
translation is recognized in the statement of Profi t & Loss except in
case of long term liabilities, where they relates to acquisition of fi
xed assets, in which case they are adjusted to the carrying cost of
such assets.
(J) Derivative instruments and hedge accounting
The Company uses foreign exchange forward contracts and options to
hedge its exposure to movements in foreign exchange rates. These
foreign exchange forward contracts and options are not used for trading
or speculation purposes. The accounting policies for forwards
contracts and options are based on whether they meet the criteria for
designation as effective cash fl ow hedges. To designate a forward
contract of option as an effective cash fl ow hedge, the Company
objectively evaluates with appropriate supporting documentation at the
inception of the each contract whether the contract is effective in
achieving offsetting cash fl ows attributable to the hedged risk.
Effective hedge is generally measured by comparing the cumulative
change in the fair value of the hedge contract with a cumulative change
in the fair value of the hedged item.
For forward contracts of options that are designated as effective cash
fl ow hedges, the gain or loss from the effective portion of the hedge
is recorded and reported directly in the shareholders'' fund (under the
head "Hedging Reserve" ) and are reclassifi ed into the profi t and
loss account upon the occurrence of the hedged transactions.
The gain/loss on options designated as effective Cash fl ow hedges are
included along with the underlying hedged fore casted transactions. The
Company recognizes gains or losses from change in fair values of
forward contracts and options that are not designated as effective cash
fl ow hedge for accounting purposes in the profi t and loss account in
the period the fair value changes occur.
(K) Revenue Recognition :
Revenue is recognized only when it can be reliably measured and it is
reasonable to expect ultimate collection. It includes sale of goods,
export incentives etc. Revenue arising from the use by others of
enterprises resources yielding interest, dividends, are recognized on
the following basis :
a) Interest income is recognized on time proportion basis taking in to
account the amount outstanding and rate applicable.
b) Dividend for investment is recognized when right to receive is
established.
(L) Receivables
Receivables are disclosed at Indian currency equivalent of actually
invoiced values. Receivables covered by bills of exchange purchased by
the Company''s bankers are neither shown as assets nor liabilities.
Contingent liability in the event of non payment of the same is refl
ected in the Notes to the Accounts.
(M) Retirement Benefi ts :
The Company makes regular contributions to Provident Fund and these are
charged to revenue. The liability of the Company for gratuity is
actuarially valued at each year end and based on such year end
valuation , the liability for gratuity is provided in the books of the
Company. The company, as a policy, doesn''t encourage accumulation of
earned leave and discharges its liability on a year to year basis.
(N) Income Tax:
Provision for Income Tax comprises of Current Tax, i.e. tax on the
taxable income computed for the year as per Tax laws and the net change
in the deferred tax assets / liability of the company during the
current year. Deferred tax assets/ liabilities are recognized on the
basis of timing difference in Tax treatment of Revenue Item. The timing
differences are subjected to the extant provision of law and enacted
tax rates in force to determine the Deferred Tax Asset / liability.
While a deferred tax liability is recognized when computed, the
management exercises prudence and conservatism while recognizing
deferred Tax Assets.
(O) Earnings Per Share:
Earnings per share is calculated in accordance with the procedure laid
out in the relevant Accounting Standard (AS-20) issued by The Institute
of Chartered Accountants of India.
(P) Contingent Losses/ Liabilities:
Contingent losses & / or consequential contingent liabilities are
disclosed in the notes to the accounts, where the company is reasonably
assured that no loss / liability will arise but where the possibility
of a loss/ liability does exist.
(Q) Events Occurring after the Balance Sheet date:
It is the Company''s Policy to take in to the account the impact of any
signifi cant event that occurs after the Balance Sheet date but before
the fi nalization of accounts.
(R) Government Grants:
Government Grants in respect of Fixed Assets are accounted for as
deferred Income by crediting the same to a specifi c reserve. The
reserve to these Grants is diminished every year by a prorate portion
of the depreciation of the assets, to amortise the grant over due life
of the assets. Where the Grants carry conditions of specifi c
performance, the contingent aspect is disclosed in due notes to the
accounts.
(S) Impairment of Assets
An asset is treated as impaired when the carrying cost of assets
exceeds its recoverable value. An impairment loss is charged to the
Statement of Profi t and Loss in the year in which an asset is identifi
ed as impaired. The impairment loss recognised in prior accounting
period is increased/ reversed where there has been change in the
estimate of recoverable value. The recoverable value is the higher of
the assets'' net selling price and value in use.
(T) Figures of previous year have been regrouped/rearranged wherever
necessary to make them comparable with the figures of current year.
Mar 31, 2013
(A) Basis of Accounting
The fnancial statements have been prepared and presented under the
historical cost convention on the accrual basis of accounting and
comply with the Accounting Standards as specifed in the Companies
(Accounting Standards) Rules, 2006, other pronouncements of the
Institute of Chartered Accountants of India (ICAI), and the relevant
provisions of the Companies Act, 1956 and guidelines issued by the
Securities and Exchange Board of India, to the extent applicable .
(B) Use of Estimates
The preparation of fnancial statements in conformity with generally
accepted accounting principles require management to make estimates and
assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent liabilities at the date of the fnancial
statements and the reported amount of revenue and expenses during the
reported period. The estimates and assumptions used in the accompanying
fnancial statements are based upon management''s evaluation of the
relevant facts and circumstances as of the date of the fnancial
statements. Actual result could differ from those estimates. Any
revision to fnancial estimates is recognized prospectively in the
fnancial statements when revised.
(C) Fixed Assets
(a) Fixed assets of the company are valued at cost which include
allocation / apportionment of direct and indirect expenses incurred in
relation to such fxed assets . The said cost is not reduced by specifc
Grants/ subsidy received against the assets.
(b) Lease hold land is capitalized with the lease premium paid,direct
expenses/interest allocable to it till it is put to use.
(D) Depreciation & Amortization
a) Depreciation on fxed assets including assets acquired on lease is
provided on Straight Line Method at the rates and in the manner
prescribed in Schedule XIV to the Companies Act, 1956.
b) Lease hold land are amortised over the useful life remaining from
the date, it put to use.
(E) Borrowing Cost
Borrowing costs that are attributable to the acquisition, construction
or production of qualifying assets are capitalized as part of cost of
such assets. Borrowing costs comprise of interest and other costs
incurred in connection with borrowing of funds.
(F) Leased Assets
Assets acquired under fnance leases, which effectively transfer to the
Company substantially all the risks and benefts incidental to ownership
of the leased item, are capitalized at the lower of the fair value and
present value of the minimum lease payment at the inception of the
leased term and disclosed as leased assets. Lease payments are
apportioned between the fnance charges and the reduction of the leased
liability so as to achieve a constant rate of interest on the remaining
balance of the liability.
(G) Investments
Long term investments are valued at cost.
The Cost of Investments made in Foreign Currency is translated at rates
prevailing on the Balance Sheet date unless temporary in nature and
gain/loss if any is accumulated in Foreign Currency Translation
Reserve.
Diminution in the value of Long Term Investments is recognized only if
the same is, in the opinion of the management, of a permanent nature.
(H) Inventories
Inventories are valued at the lower of Historic cost or the Net
Realisable Value. Costs are determined as under:
a. Bought Out Items : On First in First Out (FIFO) method except raw
hides (valued at six months average purchase price incase of Indigenous
hides and full year weighted average price in case of imported hides).
In respect of bought out items where CENVAT CREDIT is permitted excise
duty is excluded from purchase price for determining the cost.
b. Goods In Process : At cost plus estimated value addition/cost of
conversion at each major stage of production.
c. Finished Goods : At direct cost plus allocation of all overheads
(including interest on working capital) other than Marketing, Selling &
Distribution Expenses and Interest on Term Loan / Debentures.
(I) Foreign Currency Transactions
(a) All foreign Currency transaction of purchase and sales are recorded
at exchange rate prevailing on the date of the transaction. Any income
or expense on account of exchange difference either on settlement or on
translation is recognized in the statement of Proft & Loss except in
case of long term liabilities, where they relates to acquisition of
fxed assets, in which case they are adjusted to the carrying cost of
such assets.
(J) Derivative instruments and hedge accounting
The Company uses foreign exchange forward contracts to hedge its
exposure to movements in foreign exchange rates. These foreign
exchange forward contracts are not used for trading or speculation
purposes. The accounting policies for forwards contracts are based on
whether they meet the criteria for designation as effective cash fow
hedges. To designate a forward contract as an effective cash fow hedge,
the Company objectively evaluates with appropriate supporting
documentation at the inception of the each contract whether the
contract is effective in achieving offsetting cash fows attributable to
the hedged risk. Effective hedge is generally measured by comparing the
cumulative change in the fair value of the hedge contract with a
cumulative change in the fair value of the hedged item.
For forward contracts that are designated as effective cash fow hedges,
the gain or loss from the effective portion of the hedge is recorded
and reported directly in the shareholders'' fund (under the head
"Hedging Reserve" ) and are reclassifed into the proft and loss account
upon the occurrence of the hedged transactions.
(K) Revenue Recognition :
Revenue is recognized only when it can be reliably measured and it is
reasonable to expect ultimate collection. It includes sale of goods,
export incentives etc. Revenue arising from the use by others of
enterprises resources yielding interest, dividends, are recognized on
the following basis :
a) Interest income is recognized on time proportion basis taking in to
account the amount outstanding and rate applicable.
b) Dividend for investment is recognized when right to receive is
established.
(L) Receivables
Receivables are disclosed at Indian currency equivalent of actually
invoiced values. Receivables covered by bills of exchange purchased by
the Company''s bankers are neither shown as assets nor liabilities.
Contingent liability in the event of non payment of the same is
refected in the Notes to the Accounts.
(M) Retirement Benefts :
The Company makes regular contributions to Provident Fund and these are
charged to revenue. The liability of the Company for gratuity is
actuarially valued at each year end and based on such year end
valuation , the liability for gratuity is provided in the books of the
Company. The company, as a policy, doesn''t encourage accumulation of
earned leave and discharges its liability on a year to year basis.
(N) Income Tax:
Provision for Income Tax comprises of Current Tax, i.e. tax on the
taxable income computed for the year as per Tax laws and the net change
in the deferred tax assets / liability of the company during the
current year. Deferred tax assets/ liabilities are recognized on the
basis of timing difference in Tax treatment of Revenue Item. The timing
differences are subjected to the extant provision of law and enacted
tax rates in force to determine the Deferred Tax Asset / liability.
While a deferred tax liability is recognized when computed, the
management exercises prudence and conservatism while recognizing
deferred Tax Assets.
(O) Earnings Per Share:
Earnings per share is calculated in accordance with the procedure laid
out in the relevant Accounting Standard (AS-20) issued by The Institute
of Chartered Accountants of India.
(P) Contingent Losses/ Liabilities:
Contingent losses & / or consequential contingent liabilities are
disclosed in the notes to the accounts, where the company is reasonably
assured that no loss / liability will arise but where the possibility
of a loss/ liability does exist.
(Q) Events Occurring after the Balance Sheet date:
It is the Company''s Policy to take in to the account the impact of any
signifcant event that occurs after the Balance Sheet date but before
the fnalization of accounts.
(R) Government Grants:
Government Grants in respect of Fixed Assets are accounted for as
deferred Income by crediting the same to a specifc reserve. The reserve
to these Grants is diminished every year by a prorate portion of the
depreciation of the assets, to amortise the grant over due life of the
assets. Where the Grants carry conditions of specifc performance, the
contingent aspect is disclosed in due notes to the accounts.
(S) Impairment of Assets
An asset is treated as impaired when the carrying cost of assets
exceeds its recoverable value. An impairment loss is charged to the
Statement of Proft and Loss in the year in which an asset is identifed
as impaired. The impairment loss recognised in prior accounting period
is increased/ reversed where there has been change in the estimate of
recoverable value. The recoverable value is the higher of the assets''
net selling price and value in use.
(T) Figures are previous year have been regrouped/rearranged wherever
necessary to make them comparable with the fgures of current year.
Mar 31, 2012
(A) Basis of Accounting
The financial statements have been prepared and presented under the
historical cost convention on the accrual basis of accounting and
comply with the Accounting Standards as specified in the Companies
(Accounting Standards) Rules, 2006, other pronouncements of the
Institute of Chartered Accountants of India (ICAI), and the relevant
provisions of the companies Act, 1956 and guidelines issued by the
Securities and Exchange Board of India, to the extent applicable .
(B) Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles require management to make estimates and
assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent liabilities at the date of the financial
statements and the reported amount of revenue and expenses during the
reported period. The estimates and assumptions used in the accompanying
financial statements are based upon management's evaluation of the
relevant facts and circumstances as of the date of the financial
statements. Actual result could differ from those estimates. Any
revision to financial estimates is recognized prospectively in the
financial statements when revised.
(C) Fixed Assets
(a) Fixed assets of the Company are valued at cost which include
allocation / apportionment of direct and indirect expenses incurred in
relation to such fixed assets . The said cost is not reduced by
specific Grants/ subsidy received against the assets.
(b) Lease hold land is capitalized with the lease premium paid,direct
expenses/interest allocable to it till it is put to use.
(D) Depreciation & Amortization
a) Depreciation on fixed assets including assets acquired on lease is
provided on Straight Line Method at the rates and in the manner
prescribed in Schedule XIV to the Companies Act, 1956.
b) Lease hold land are amortised over the useful life remaining from
the date, it put to use.
(E) Borrowing Cost
Borrowing costs that are attributable to the acquisition, construction
or production of qualifying assets are capitalized as part of cost of
such assets. Borrowing costs comprise of interest and other costs
incurred in connection with borrowing of funds.
(F) Leased Assets
Assets acquired under finance leases, which effectively transfer to the
Company substantially all the risks and benefits incidental to
ownership of the leased item, are capitalized at the lower of the fair
value and present value of the minimum lease payment at the inception
of the leased term and disclosed as leased assets. lease payments are
apportioned between the finance charges and the reduction of the leased
liability so as to achieve a constant rate of interest on the remaining
balance of the liability.
(G) Investments
Long term investments are valued at cost.
The Cost of Investments made in Foreign Currency is translated at rates
prevailing on the Balance Sheet date unless temporary in nature and
gain/loss if any is accumulated in Foreign Currency.
Diminution in the value of Long Term Investments is recognized only if
the same is, in the opinion of the management, of a permanent nature.
(H) Inventories
Inventories are valued at the lower of Historic cost or the Net
Realisable Value. Costs are determined as under :
a. Bought Out Items : On First in First Out (FIFO) method except raw
hides (valued at six months average purchase price incase of
Indigenous hides and full year weighted average price in case of
imported hides). In respect of bought out items where CENVAT CREDIT is
permitted excise duty is excluded from purchase price for determining
the cost.
b. Goods In Process : At cost plus estimated value addition/cost of
conversion at each major stage of production.
c. Finished Goods : At direct cost plus allocation of all overheads
(including interest on working capital) other than Marketing, Selling &
Distribution Expenses and Interest on Term Loan / Debentures.
(I) Foreign Currency Transactions
All foreign Currency transaction of purchase and sales are recorded at
exchange rate prevailing on the date of the transaction. Any income or
expense on account of exchange difference either on settlement or on
translation is recognized in the statement of Profit & Loss except in
case of long term liabilities, where they relates to acquisition of
fixed assets, in which case they are adjusted to the carrying cost of
such assets.
(J) Derivative instruments and hedge accounting
The Company uses foreign exchange forward contracts and options to
hedge its exposure to movements in foreign exchange rates. These
foreign exchange forward contracts and options are not used for trading
or speculation purposes. The accounting policies for forwards contracts
and options are based on whether they meet the criteria for designation
as effective cash flow hedges. To designate a forward contract of
option as an effective cash flow hedge, the Company objectively
evaluates with appropriate supporting documentation at the inception of
the each contract whether the contract is effective in achieving
offsetting cash flows attributable to the hedged risk. Effective hedge
is generally measured by comparing the cumulative change in the fair
value of the hedge contract with a cumulative change in the fair value
of the hedged item. For forward contracts of options that are
designated as effective cash flow hedges, the gain or loss from the
effective portion of the hedge is recorded and reported and reported
directly in the shareholders' fund (under the head ÃHedging
ReserveÃ) and are reclassified into the profit and loss account upon
the occurrence of the hedged transactions. The gain/loss on options
designated as effective. Cash flow hedges are included along with the
underlying hedged fore casted transactions. The Company recognizes
gains or losses from change in fair values of forward contracts and
options that are not designated as effective cash flow hedge for
accounting purposes in the profit and loss account in the period the
fair value changes occur.
(K) Revenue Recognition :
Revenue is recognized only when it can be reliably measured and it is
reasonable to expect ultimate collection. It includes sale of goods,
export incentives etc. Revenue arising from the use by others of
enterprises resources yielding interest,dividends, are recognized on
the following basis :
a) Interest income is recognized on time proportion basis taking in to
account the amount outstanding and rate applicable.
b) Dividend for investment is recognized when right to receive is
established.
(L) Receivables
Receivables are disclosed at Indian currency equivalent of actually
invoiced values. Receivables covered by bills of exchange purchased by
the Company's bankers are neither shown as assets nor liabilities.
Contingent liability in the event of non payment of the same is
reflected in the Notes to the Accounts.
(M) Retirement Benefits :
The Company makes regular contributions to Provident Fund and these are
charged to revenue. The liability of the Company for gratuity is
actuarially valued at each year end and based on such year end
valuation , the liability for gratuity is provided in the books of the
Company. The Company, as a policy, doesn't encourage accumulation of
earned leave and discharges its liability on a year to year basis.
(N) Income Tax:
Provision for Income Tax comprises of Current Tax, i.e tax on the
taxable income computed for the year as per Tax laws and the net change
in the deferred tax assets / liability of the Company during the
current year. Deferred tax assets / liabilities are recognized on the
basis of timing difference in Tax treatment of Revenue Item. The timing
differences are subjected to the extant provision of law and enacted
tax rates in force to determine the Deferred Tax Asset / liability.
While a deferred tax liability is recognized when computed, the
management exercises prudence and conservatism while recognizing
deferred Tax Assets.
(O) Earnings Per Share:
Earnings per share is calculated in accordance with the procedure laid
out in the relevant Accounting Standard (AS' 20) issued by The Institute
of Chartered Accountants of India.
(P) Contingent Losses/ Liabilities:
Contingent losses & / or consequential contingent liabilities are
disclosed in the notes to the accounts, where the Company is reasonably
assured that no loss / liability will arise but where the possibility
of a loss/ liability does exist.
(Q) Events Occurring after the Balance Sheet date:
It is the Company's Policy to take in to the account the impact of any
significant event that occurs after the Balance Sheet date but before
the finalization of accounts.
(R) Government Grants:
Government Grants in respect of Fixed Assets are accounted for as
deferred Income by crediting the same to a specific reserve. The
reserve to these Grants is diminished every year by a prorate portion
of the depreciation of the assets, to amortise the grant over due life
of the assets. Where the Grants carry conditions of specific
performance, the contingent aspect is disclosed in due notes to the
accounts.
(S) Impairment of Assets
Impairment loss, if any, is provided to the extent, the carrying amount
of assets exceeds their recoverable amount. (Recoverable amount is
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 an asset and from its disposal at the
end of its useful life.)
Mar 31, 2011
(1) Basis of Accounting
(a) The financial statements have been prepared and presented under the
historical cost convention on the accrual basis of accounting and
comply with the Accounting Standards as specified in the Companies
(Accounting Standards) Rules, 2006, other pronouncements of the
Institute of Chartered Accountants of India (ICAI), and the relevant
provisions of the Companies Act, 1956 and guidelines issued by the
Securities and Exchange Board of India, to the extent applicable .
(b) The preparation of financial statements in conformity with
generally accepted accounting principles require management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent liabilities at the date of
the financial statements and the reported amount of revenue and
expenses during the reported period. The estimates and assumptions used
in the accompanying financial statements are based upon management's
evaluation of the relevant facts and circumstances as of the date of
the financial statements. Actual result could differ from those
estimates. Any revision to financial estimates is recognized
prospectively in the financial statements when revised
(2) Fixed Assets
(a) Fixed assets of the company are valued at cost which include
allocation / apportionment of direct and indirect expenses incurred in
relation to such fixed assets . The said cost is not reduced by
specific Grants/ subsidy received against the assets.
(b) Lease hold land is capitalized with the lease premium paid,direct
expenses/interest allocable to it till it is put to use.
(3) Depreciation
a) Depreciation on fixed assets including assets acquired on lease is
provided on Straight Line Method at the rates and in the manner
prescribed in Schedule XIV to the Companies Act, 1956.
b) Lease hold land are amortised over the useful life remaining from
the date it put to use.
(4) Borrowing Cost
(a) Borrowing costs that are attributable to the acquisition,
construction or production of qualifying assets are capitalized as part
of cost of such assets. Borrowing costs comprise of interest and other
costs incurred in connection with borrowing of funds.
(5) Leased Assets
Assets acquired under finance leases, which effectively transfer to the
Company substantially all the risks and benefits incidental to
ownership of the leased item, are capitalized at the lower of the fair
value and present value of the minimum lease payment at the inception
of the leased term and disclosed as leased assets. Lease payments are
apportioned between the finance charges and the reduction of the leased
liability so as to achieve a constant rate of interest on the remaining
balance of the liability.
(6) Investments
Long term investments are valued at cost.
The Cost of Investments made in Foreign Currency is translated at rates
prevailing on the Balance Sheet date unless temporary in nature and
gain/loss if any is accumulated in Foreign Currency Translation
Reserve.
Diminution in the value of Long Term Investments is recognized only if
the same is, in the opinion of the management, of a permanent nature.
(7) Inventories
Inventories are valued at the lower of Historic cost or the Net
Realisable Value. Costs are determined as under :
a. Bought Out Items : On First in First Out (FIFO) method except raw
hides (valued at six months average purchase price incase of Indigenous
hides and full year weighted average price in case of imported hides).
In respect of bought out items where CENVAT CREDIT is permitted excise
duty is excluded from purchase price for determining the cost.
b. Goods In Process : At cost plus estimated value addition/cost of
conversion at each major stage of production.
c. Finished Goods : At direct cost plus allocation of all overheads
(including interest on working capital) other than Marketing, Selling &
Distribution Expenses and Interest on Term Loan / Debentures.
(8) Foreign Currency Transactions
All foreign Currency transaction of purchase and sales are recorded at
exchange rate prevailing on the date of the transaction. The difference
between the rate prevailing on the date of the transaction and on the
date of settlement as also on translation of Current Assets and Current
Liabilities at the end of the year is recognized as Income or expense
as the case may be.
(9) Derivative instruments and hedge accounting
The Company uses foreign exchange forward contracts and options to
hedge its exposure to movements in foreign exchange rates. These
foreign exchange forward contracts and options are not used for trading
or speculation purposes. The accounting policies for forwards contracts
and options are based on whether they meet the criteria for designation
as effective cash flow hedges. To designate a forward contract of
option as an effective cash flow hedge, the Company objectively
evaluates with appropriate supporting documentation at the inception of
the each contract whether the contract is effective in achieving
offsetting cash flows attributable to the hedged risk. Effective hedge
is generally measured by comparing the cumulative change in the fair
value of the hedge contract with a cumulative change in the fair value
of the hedged item. For forward contracts of options that are
designated as effective cash flow hedges, the gain or loss from the
effective portion of the hedge is recorded and reported and reported
(10) Revenue Recognition :
Revenue is recognized only when it can be reliably measured and it is
reasonable to expect ultimate collection. It includes sale of goods,
export incentives etc. Revenue arising from the use by others of
enterprises resources yielding interest,dividends, are recognized on
the following basis :
a) Interest income is recognized on time proportion basis taking in to
account the amount outstanding and rate applicable.
b) Dividend for investment is recognized when right to receive is
established.
(11) Receivables
Receivables are disclosed at Indian currency equivalent of actually
invoiced values. Receivables covered by bills of exchange purchased by
the Company's bankers are neither shown as assets nor liabilities.
Contingent liability in the event of non payment of the same is
reflected in the Notes to the Accounts.
(12) Retirement Benefits :
The Company makes regular contributions to Provident Fund and these are
charged to revenue. The liability of the Company for gratuity is
actuarially valued at each year end and based on such year end
valuation , the liability for gratuity is provided in the books of the
Company. The company, as a policy, doesn't encourage accumulation of
earned leave and discharges its liability on a year to year basis.
(13) Income Tax:
Provision for Income Tax comprises of Current Tax, i.e tax on the
taxable income computed for the year as per Tax laws and the net change
in the deferred tax assets / Liability of the company during the
current year. Deferred tax assets / liabilities are recognized on the
basis of timing difference in Tax treatment of Revenue Item. The timing
differences are subjected to the extant provision of law and enacted
tax rates in force to determine the Deferred Tax Asset / Liability.
While a deferred tax liability is recognized when computed, the
management exercises prudence and conservatism while recognizing
deferred Tax Assets.
(14) Earnings Per Share:
Earnings per share is calculated in accordance with the procedure laid
out in the relevant Accounting Standard (AS-20) issued by The Institute
of Chartered Accountants of India.
(15) Contingent Losses/ Liabilities:
Contingent losses & / or consequential contingent liabilities are
disclosed in the notes to the accounts, where the company is reasonably
assured that no loss / liability will arise but where the possibility
of a loss/ liability does exist.
(16) Events Occurring after the Balance Sheet date:
It is the Company's Policy to take in to account the impact of any
significant event that occurs after the Balance Sheet date but before
the finalization of accounts.
(17) Government Grants:
Government Grants in respect of Fixed Assets are accounted for as
deferred Income by crediting the same to a specific reserve. The
reserve to these Grants is diminished every year by a prorsata portion
of the depreciation of the assets, to amortise the grant over due life
of the assets. Where the Grants carry conditions of specific
performance, the contingent aspect is disclosed in due notes to the
accounts.
(18) Impairment of Assets
Impairment loss, if any, is provided to the extent, the carrying amount
of assets exceeds their recoverable amount. (Recoverable amount is
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 an asset and from its disposal at the
end of its useful life.)
Mar 31, 2010
(1) Basis of Accounting
(i) The financial statements have been prepared and presented under the
historical cost convention on the accrual basis of accounting and
comply with the Accounting Standards as specified in the Companies
(Accounting Standards) Rules, 2006 and other pronouncements of the
Institute of Chartered Accountants of India (ICAI), and the relevant
provisions of the companies Act, 1956 and guidelines issued by the
Securities and Exchange Board of India, to the extent applicable .
(ii) The preparation of financial statements in conformity with
generally accepted accounting principles require management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent liabilities at the date of
the financial statements and the reported amount of revenue and
expenses during the reported period. The estimates and assumptions used
in the accompanying financial statements are based upon managements
evaluation of the relevant facts and circumstances as of the date of
the financial statements. Actual result could differ from those
estimates. Any revision to financial estimates is recognized
prospectively in the financial statements when revised.
(2) Fixed Assets
(i) Fixed assets of the Company are valued at cost which include
allocation / apportionment of direct and indirect expenses incurred in
relation to such
fixed assets. The said cost is not reduced by specific Grants/ subsidy
received against the assets. (ii) Leased Assets under finance lease
are capitalised.
(3) Depreciation
Depreciation on fixed assets including assets acquired on lease is
provided on Straight Line Method at the rates and in the manner
prescribed in Schedule XIV to the Companies Act, 1956.
(4) Borrowing Cost
(a) / Borrowing costs that are attributable to the acquisition,
construction or production of qualifying assets are capitalised as part
of cost of such assets. j Borrowing costs comprise of interest and
other costs incurred in connection with borrowing of funds.
(5) Leased Assets
a) Leasehold land is capitalised and treated at par with freehold land.
b) Assets acquired under finance leases, which effectively transfer to
the Company substantially all the risks and benefits incidental to
ownership of the leased item, are capitalised at the lower of the fair
value and present value of the minimum lease payment at the inception
of the leased term and disclosed as leased assets, lease payments are
apportioned between the finance charges and the reduction of the leased
liability so as to achieve a constant rate of interest on the remaining
balance of the liability.
(6) Investments
Long term investments are valued at cost. The Cost of Investments made
in Foreign Currency is translated at rates prevailing on the Balance
Sheet date
unless temporary in nature and gain/loss if any is accumulated in
Foreign Currency Translation Reserve.
Diminution in the value of Long Term Investments is recognized only if
the same is, in the opinion of the management, of a permanent nature.
(7) Inventories
Inventories are valued at the lower of Historic cost or the Net
Realisable Value. Costs are determined as under:
a. Bought Out Items On First in First Out (FIFO) method except raw
hides (valued at six months average purchase price incase of Indigenous
hides and full year weighted average price in case of imported hides).
In respect of bought out items where CENVAT CREDIT is permitted excise
duty is excluded from purchase price for determining the cost.
b. Goods In Process : At cost plus estimated value addition/cost of
conversion at each major stage of production.
c. Finished Goods : At direct cost plus allocation of all overheads
(including interest on working capital) other than Marketing, Selling
& Distribution Expenses and Interest on Term Loan / Debentures.
(8) Foreign Currency Transactions
All foreign Currency transaction of purchase and sales are recorded at
exchange rate prevailing on the date of the transaction. The difference
between the rate prevailing on the date of the transaction and on the
date of settlement as also on translation of Current Assets and Current
Liabilities at the end of the year is recognised as Income or expense
as the case may be.
(9) Derivative instruments and hedge acccounting
The Company uses foreign exchange forward contracts and options to
hedge its exposure to movements in foreign exchange rates. These
foreign exchange forward contracts and options are not used for trading
or speculation purposes. The accounting policies for forwards contracts
and options are based on whether they meet the criteria for designation
as effective cash flow hedges. To designate a forward contract of
option as an effective cash flow hedge, the Company objectivly
evaluates with appropriate supporting documentation at the inception of
the each contract whether the contract is effective in achieving
offsetting cash flows attributable to the hedged risk. Effective hedge
is generally measured by comparing the cumulative change in the fair
value of the hedge contract with a cumulative change in the fair value
of the hedged item.
For forward contracts of options that are designated as effective cash
flow hedges, the gain or loss from the effective portion of the hedge
is recorded and reported directly in the shareholders fund (under the
head "Hedging Reserve") and are reclassified into the profit and loss
account upon the occurrence of the hedged transactions. The gain/loss
on options designated as effective Cash Flow hedges are included along
with the underlying hedged forecasted transactions.The Company
recognises gains or losses from change in fair values of forward
contracts and options that are not designated as effective cash flow
hedge for accounting purposes in the profit and loss account in the
period the fair value changes occur.
(10) Receivables
Receivables are disclosed at Indian currency equivalent of actually
invoiced values. Receivables covered by bills of exchange purchased by
the Companys bankers are neither shown as assets nor liabilities.
Contingent liability in the event of non payment of the same is
reflected in the Notes to the Accounts.
(11) Employee Benefits
The Company makes regular contributions to Provident Fund and these are
charged to revenue. The liability of the Company for gratuity is
actuarially valued at each year end and based on such year end
valuation, the liability for gratuity is provided in the books of the
Company. The company, as a policy, doesnt encourage accumulation of
earned leave and discharges its liability on a year to year basis.
(12) Income Tax
Provision for Income Tax comprises of Current Tax, i.e tax on the
taxable income computed for the year as per Tax laws and the net change
in the deferred tax assets / liability of the company during the
current year. Deferred tax assets / liabilities are recognised on the
basis of timing difference in Tax treatment of Revenue Item. The timing
differences are subjected to the extant provision of law and enacted
tax rates in force to determine the Deferred Tax Asset / liability.
While a deferred tax liability is recognised when computed, the
management exercises prudence and conservatism while recognising
deferred Tax Assets.
(13) Earnings Per Share
Earnings per share is calculated in accordance with the procedure laid
out in the relevant Accounting Standard (AS-20) issued by The Institute
of Chartered Accountants of India.
(14) Contingent Losses/ Liabilities
Contingent losses & / or consequential contingent liabilities are
disclosed in the notes to the accounts, where the company is reasonably
assured that no loss / liability will arise but where the possibility
of a loss/ liability does exist.
(15) Events Occurring after the Balance Sheet date
It is the Companys Policy to take in to the account the impact of any
significant event that occurs after the Balance Sheet date but before
the finalisation of accounts.
(16) Government Grants
Government Grants in respect of Fixed Assets are accounted for as
deferred Income by crediting the same to a specific reserve. The
reserve to these Grants is diminished every year by a prorata portion
of the depreciation of the assets, to amortise the grant over due life
of the assets. Where the Grants carry conditions of specific
performance, the contingent aspect is disclosed in due notes to the
accounts.
(17) Impairment of Assets
Impairment loss, if any, is provided to the extent, the carrying amount
of assets exceeds their recoverable amount. (Recoverable amount is
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 an asset and from its disposal at the
end of its useful life.)
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