STATEMENT OF ACCOUNTING POLICIES i. Convention The financial statements have been brpared in accordance with applicable Accounting Standards in India and in accordance with the relevant provisions of the Companies Act, 2013. A summary of important accounting policies which have been applied consistently is set out below. ii. Use of Estimates The brparation of financial statements require judgments, estimates and assumptions to be made that affect the reported amount of assets and liabilities including contingent liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between actual results and estimates are recognized in the period in which the results are known / materialized. iii. Basis of Accounting The financial statements have been brpared in accordance with historical cost convention. All income and expenses, unless specifically stated otherwise, have been accounted for on accrual basis. iv. Recognition of Revenue & Expenses a) All revenue and expenses are accounted for on accrual basis except as otherwise stated. b) Sales are net of returns, Sales Tax/ VAT and trade discount. v. Government Grants a) Government Grants related to specific assets are adjusted with value of fixed assets. b) Government Grants in the nature of Promoter's Contribution towards fixed assets are credited to Capital Reserve. c) Government Grant related to revenue items are adjusted with the related expenditure/taken in income. vi. Fixed Assets & Debrciation / Amortization A. Tangible Fixed Assets a) Fixed assets are stated at cost less accumulated debrciation and accumulated impairment loss, if any. b) Debrciation on tangible fixed assets other than land and tea plantation is provided on the "Straight Line Method" at the rates determined based on useful lives of respective assets as brscribed in the Schedule II of the Companies Act, 2013. c) In case of asset "Plucking/Pruning/Power Spraying Machines", debrciation has been provided on Straight Line Method at the rates determined considering the useful lives of 5 years which is based on internal assessment and the management believes that the useful lives as considered above best rebrsent the period over which the respective assets shall be expected in use. d) Items of machinery spares to be used in connection with an item of fixed asset are amortized over the useful life of the asset. e) Leasehold Land (Others) is amortized over the period of lease. B. Intangible Fixed Assets Intangible Assets are stated at cost on initial recognition after which the same are stated at cost less accumulated amortization and accumulated impairment loss, if any. C. Capital Work in Progress Capital Work in Progress is stated at cost which includes expenses incurred during construction period, interest on amount borrowed for acquisition of qualifying assets and other expenses incurred in connection with project implementation in so far as such expenses relate to the period prior to the commencement of commercial production. D. Intangible assets under development Intangible assets under development is stated at cost which includes expenses incurred during development period and all other expenses incurred in connection with development of Intangible Assets in so far as such expenses relate to the period prior to the getting the assets ready for use. vii. Impairment of Assets Impairment of Assets are assessed at each Balance Sheet date for each cash generating unit if any indicators of impairment exists and the same is assessed and provided for in accordance with the Accounting Standard 28. A brviously recognized impairment loss is periodically assessed. viii. Leases For assets acquired under operating lease, rental payable are recognised as an expense in the statement of profit and loss. Assets acquired under finance lease are capitalized at lower of the fair value and the brsent value of minimum lease payment. Lease income from operating leases is recognised in the statement of profit and loss over the period of lease. a) Investments which are readily realizable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as long-term investments. The portion of long term investments expected to be realized within twelve months after the reporting date are disclosed under current investments. b) On initial recognition, all investments are measured at cost. The cost comprises purchase price and directly attributable acquisition charges such as brokerage, fees & duties. c) Long-Term Investments are stated at cost. Provision for diminution is made if the decline in value, in the opinion of the management, is other than temporary. d) Current Investments, other than the portion of long term investments disclosed under current investments, are stated at lower of cost or fair value. Inventories Inventories are valued at cost or net realizable value whichever is lower. Cost is determined on weighted average/FIFO basis. Cost comprises expenditure incurred in the normal course of business in bringing such inventories to their brsent location and condition and includes appropriate overheads. Provision is made for obsolete and slow moving stocks, wherever necessary. Net realizable value is the estimated selling prices in the ordinary course of business less estimated cost necessary to make the sale. Materials and other items held for use in production of inventories are not written down below the cost if the finished products in which they will be incorporated are expected to be sold at or above cost. xi. Employment Benefits a) Short term Employees Benefits The undiscounted amount of short term employee benefit expected to be paid in exchange for the services rendered by employee is recognized during the period when the employee render the service. This benefit includes salary, wages, short term compensatory absences and bonus. b) Long Term Employee Benefits i) Defined Contribution Scheme: This benefit includes contribution to Superannuation Scheme, ESIC (Employees' State Insurance Corporation) and Provident Fund Schemes. The contribution is recognized during the period in which the employee renders service. ii) Defined Benefit Scheme: For defined benefit scheme the cost of providing benefit is determined using the projected unit credit method with actuarial valuation being carried out at each balance sheet date. The retirement benefit obligation recognized in the Balance Sheet rebrsents value of defined benefit obligation as reducedby the fair value of planned assets. Actuarial gains and losses are recognized in full during the period in which they occur. iii) Other Long Term Benefits: Long term compensated absence is provided for on the basis of an actuarial valuation, using the Projected Unit Credit Method as at the date of Balance Sheet. xii. Borrowing Costs Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalized as part of the cost until the asset is ready for its intended use. A qualifying asset is an asset that necessarily requires a substantial period of time to get ready for its intended use. Other borrowing costs are recognized as an expense in the period in which they are incurred. xiii. Foreign Currency Transactions Transactions in foreign currencies are recorded at exchange rates brvailing on the date of the transaction. Monetary items denominated in foreign currency are restated at the exchange rate brvailing on the Balance Sheet date. Foreign currency non-monetary items carried in terms of historical cost are reported using the exchange rate at the date of the transactions. Exchange differences arising on settlement of transactions and/or restatements are dealt with in the statement of profit and loss. Exchange difference arising on reporting /settlement of long term foreign currency monetary items (other than related to acquisition of debrciable Fixed Assets) at rates different from those at which they were initially recorded during the period or reported in brvious financial statement which were until now being recognized in the statement of Profit & Loss are now being accumulated in "Foreign Currency Monetary Items Translation Difference Account" and amortized in the statement of Profit & Loss over the remaining life of the long term foreign currency monetary items. xiv. Derivative Transactions The Company uses derivative financial instruments such as forward exchange contracts, currency swap etc. to hedge its risks associated with foreign currency fluctuations relating to the underlying transactions, highly probable forecast transactions and firm commitments. In respect of Forwards Exchange Contracts with underlying transactions, the brmium or discount arising at the inception of such contract is amortized as expense or income over the life of contract. Other Derivative Contracts outstanding at the Balance Sheet date are marked to market and resulting loss, if any, is provided for in the financial statement. Any profit or losses arising on cancellation of derivative instruments are recognized as income or expense for the period. xv. Taxes on Income Current tax is determined on the basis of the amount of tax payable for the year under Income Tax Act and Agriculture Income Tax of the respective states. Deferred tax is calculated at the applicable tax rate and is recognized on timing differences between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent period. Deferred tax assets subject to consideration of prudence, are recognized and carried forward only to the extent that there is virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. Tax Credit for Minimum Alternate Tax (MAT) is recognized when there is a convincing evidence of its realisability against future tax liability. xvi. Provisions, Contingent Liabilities & Contingent Assets Provisions are recognized in respect of brsent obligations arising out of past events where there are reliable estimates of the probable outflow of resources. Contingent liabilities are the possible obligation of the past events, the existence of which will be confirmed only by the occurrence or non-occurrence of a future event. These are not provided for but are disclosed by way of Notes on Accounts. Contingent Assets are not provided for or disclosed. Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification / disclosure. As per our report of even date annexed For and on behalf of the Board of Directors For SINGHI & CO. Chartered Accountants (Firm Registration No. 302049E) Aditya Singhi Partner(Membership No. 305161) R. K. Ganeriwala President, CFO & Secretary) D. P. Maheshwari (Managing Director) B. K. Birla (Chairman) Place : Kolkata, date : the 3rd day of May, 2016 |