Notes to Financial Statement for the Year ended 31 March 2015

Background

Dalmia Industrial Development Limited is a public company. It is incorporated under the Companies Act, 1956 and its shares are listed on the Calcutta Stock Exchange. The Company is primarily engaged in Textile Products.

1. SIGNIFICANT ACCOUNTING POLICIES

i. Basis of Preparation of financial statements

These financial statements have been brpared and brsented on the accrual basis of accounting and comply with the Accounting Standards brscribed in the Companies (Accounting Standards) Rules, 2006 issued by the Central Government, the relevant provisions of the Companies Act, 1956 and other accounting principles generally accepted in India, to the extent applicable.

ii Use of Estimates

The brparation of Financial statements in conformity with Generally Accepted Accounting Principles (GAAP) requires management to make judgements, estimates and assumptions that affect the application of accounting policies and reported amounts of assets, liabilities, income and expenses and the disclosure of contingent liabilities on the date of financial statements. Actual results could deffer from those estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Any revision to accounting estimates is recognised prospectively in current and future periods.

iii Current -non current classification

All assets and liabilities have been classified as current or non current as per the Company's normal operating cycle and other criteria set out in the Revised Schedule VI tothe Companies Act, 1956. Based on the nature of operations, the Company has ascertained its operating cycle for the purpose of current- non current classification of assets and luiabilities as 12 months

All Assets and liabilities are classified into current and non-current.

Assets

An asset is classified as current when it satisfies any of the following criteria

a. it is expected to be realised in, or is intended for sale or consumption in, the company's normal operating cycle

b. it is held primarily for the purpose of being traded;

c. it is expected to be realised within 12 months after the reporting date; or

d. it is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liabiklity for atleast 12 months after the reporting date

Current assets include the current portion of non-currential assets.

All other assets are classified as non-current

Liabilities

A liability is classified as current when it satisfies any of the following criteria:

a. it is expected to be settled in the company's normal operating cycle:

b. it is held primarily for the purpose of being traded:

c. it is due to be settled within 12 months after the reporting date; or

d. the company does not have an unconditional right to defer settlement of the liability for at least 12 months after the reporting date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

Current liabilities include current portion of non-current financial liabilities.

All other liabilities are classified as non-current.

iv Fixed assets

Fixed assets are stated at cost of acquisition (net of CENVAT) has accumulated debrciation. Cost of acquisition includes taxes, duties, freight and other costs that are directly attributable to bringing assets to their working condition for their working condition for their intended use.

Spares that can be used only with particular itemsof plant and machinery and such usage is expected to be irregular are capitalized

Fixed assets under construction are disclosed as capital work in progress

v Debrciation/ Amortisation

Debrciation on tangible fixed assets is provided under written down method as per raetes brscribed by Schedule XIV to the companies Act, 1956. Debrciation on addtions/ deletion are provided on pro rata basis in the year of purchase/ disosal.

vi Impairment

The carrying amounts of fixed assets capital work in progress are reviewed at each balance sheet date in accordance with Accounting Standard 28 on 'Impairment of Assets', brscribed by the Companies (Accounting Sytandards) Rules, 2006, to determine whether there is any indication of impairment. If any such indication exists, the recoverable amounts of assets are estimated at each reporting date. An impairment loss is recognised whenever the carrying amount of an asset or the cash generating unit of whch it is a part, exceeds the corresponding recoverable amount. Impairment losses are recognised in the statement of profit and loss. An Impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the assets carrying amount does not exceed the carrying amount that would have been determined net of debrciation or amortisation,if no impairment loss had been recognised.

vii Investments

Long term investments are stated at cost less amount written off, where there is a diminution in value, other than temporary

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

viii Inventories

Raw materials, stores and spare parts are valued at the lower of cost and net realizable value. Cost includes purchase price, duties and taxes, freight and other expenditure incurred in bringing such inventories to their brsent location and condition. In determining cost, weighted average method is used. The carrying costs of raw materials, stores and spare parts are appropriately written down when there is a decline in replacement cost of such materials and the finished products, in which they will be incorporated, are expected to be sold below cost.

Work in progress and finished goods are valued at the lower of cost and net realisable

Work in progress and finished goods are valued at the lower of cost and net realizable value. Cost comprises of direct material, labour expenses and an appropriate portion of production overheads incurred in bringing the inventory to their brsent location and condition. Fixed production overheads are allocated on the basis of normal capacity of the production facilities. In determining cost, weighted average method is used.

Traded finished goods are valued at the lower of cost, weighted average method is used.

ix Revenue

Revenue from sales of goods is recognised when significant risks and rewards of ownership in the goods are transferred to customers and it is not unreasonable to expect ultimate collection of sale consideration that is being recognised as revenue.

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

x Employee benefits

Employee benefits payable wholly within twelve months of receving employee services are classified as short-term employee benefits. These benefits includes salaries and wages, bonus and ex-gratia. The undiscounted amount of short-term employee benefits to be paid in exchange for employee services is recognised as an expense as the related service is rendered by employees.

xi Taxation

Income-tax expense comprises current tax (i.e amount of tax for the period determined in accordance with the income-tax law)and deffered tax charge or credit (reflecting the tax effects of timing difference between accounting income and taxable income for the period.)

Current tax is measured at the amount expected to be paid to (recovered from) the taxation authorities, using the applicable tax rates and tax laws. Deferred tax is recognised in respect of timing differences between taxable income and accounting income i.e. difference that originate in one period and are capable of reversal in one or more subsequent periods. The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognised using the tax rates and tax laws that have been enacted or substantively enacted by the bal;ance sheet date. Deferred tax assets are recognised only to the extent there is reasonable certainty that the assets can be realised in future; however, where there is unabsorbed debrciation or carried forward loss under taxation laws, deferred tax assets are recognised only if there is a virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax assets can be realised. Deferred tax assets can be realised. Deffered tax assets are reviewed as at each balance sheet and written down or written-up reflect the amount that is reasonably/ virtually certain (as the case may be) to be realised.

xii Provisions and contingent liabilities

A provision is created when there is a brsent obligation as a result of past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is made when there is a possible obligation or a brsent obligation that may, but probably will not, require an outflow of resources. when there is a possible obligation or a brsent obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made. Contingent assets are neither recognised nor disclosed in the financial statements. However, ciontingent assets are assessed continually and if it is virtually certain that an inflow of economic benefits will arise, the asset and related income are recognised in the period in which the change occurs.

xiii Earning per share

Basic earning per share is computed using the weighted average number of equity shares outstanding during the year. Diluted earning per share is computed using the weighted average number of equity and dilutive equity equivalent shares outstanding at the year end ,except where the results would be anti dilutive.