The financial statements have been prepared to comply in all material
aspects with all the applicable accounting principles in India, the
applicable accounting standards, notified u/s 211(3C) of the Companies
Act, 1956 and the relevant provisions of the Companies Act, 1956. A
summary of important accounting policies which have been applied
consistently, are set out below. Financial Statements have also been
prepared in accordance with relevant presentational requirements of the
Companies Act, 1956 of India.
b) BASIS OF ACCOUNTING
The financial statements have been prepared in accordance with the
historical cost convention.
c) FIXED ASSETS
i) Fixed assets are stated at cost of acquisition together with any
incidental expenses of acquisition.
ii) Depreciation on fixed assets other than Livestock and Estate &
Development has been provided on Written Down value method in
accordance with Schedule XIV of the Companies Act, 1956. Estate &
Development is not depreciated. Livestock is expensed over its useful
iii) All expenditure incurred for extension of new areas of cultivation
are capitalised. However, cost of upkeep and maintenance and cost of
replanting in existing areas are charged to revenue.
iv) Subsidies from Government in respect of fixed assets are deducted
from the cost of respective assets.
v) Profit or Loss on disposal of Fixed Assets is recognised in the
Profit and Loss Account.
i) Cost of software is capitalised where it is expected to provide
future enduring economic benefits. Capitalisation costs include
licence fees and cost of implementation / system integration services.
The costs are capitalised in the year in which the relevant software is
implemented for use. Expenses incurred on upgradation / enhancements is
charged off as revenue expenditure unless they bring similar
significant additional benefits.
ii) Capitalised software costs is amortised on a straight line basis
over a period of five years.
III) IMPAIRMENT OF FIXED ASSETS
An impairment loss is recognised where applicable, when the carrying
value of the fixed assets of a cash generating unit exceeds its net
selling price or value in use, whichever is higher.
Long Term Investments are stated at cost and where applicable,
provision is made in case of permanent diminution in value of
investments. Current investments are stated at lower of cost or fair
Inventories are valued at lower of cost and net realisable value. Cost
is determined on weighted average basis. Cost comprises expenditure
incurred in the normal course of business in bringing such inventories
to their location and condition and includes appropriate overheads.
Provision is made for obsolete and slow moving stocks where necessary.
f) RESEARCH AND DEVELOPMENT
Research and Development Expenditure of revenue nature is charged to
the Profit and Loss Account and capital expenditure is treated as fixed
g) RETIREMENT BENEFITS
(i) The Company operates defined contribution schemes like Provident
Fund and defined Contribution Pension Schemes.
The Company makes regular contribution to provident funds which are
fully funded and administered by Government and are independent of
Company''s finance. Contributions are recognized in Profit & Loss
Account on an accrual basis. The Company operates a non contributory
defined contribution pension scheme for certain employees. The Company
contributes 15% of the employees'' current salary to the above
contribution fund which is recognised in the Profit & Loss Account.
The Company also operates defined benefit Provident Fund Schemes for
certain employees which are fully funded and administered by trustees
and are independent of the Company''s finance. The Company makes regular
contributions to the fund and shortfall if any, arising out of annual
actuarial valuation, is recognized in the Profit and Loss Account.
(ii) Defined Benefit Gratuity Plan is maintained by the company for all
its eligible employees. The Company also operates a Non Contributory
Defined Benefit Pension Scheme for certain employees. The Company
contributes to such funds on the basis of actuarial valuation at the
end of each year after setting off any net asset in respect of either
fund. Both the Pension Fund and gratuity fund are administered by the
Trustees and is independent of the Company''s finance.
(iii) For Schemes where recognized funds have been set up annual
contributions determined as payable in the actuarial valuation report
are contributed. Actuarial gains & losses are recognized in the Profit
& Loss Account. The Company recognizes in the Profit & Loss Account
gains or losses on curtailment or settlement of a defined benefit plan
as and when the curtailment or settlement occurs.
(iv) Post retirement medical benefits are provided by the Company for
certain category of employees. Liability is determined through
independent year end actuarial valuation and is recognized in the
Profit & Loss Account.
(v) Provision is made for retirement leave encashment benefit payable
to employees on the basis of independent actuarial valuation, at the
end of each year and charge is recognized in the Profit and Loss
Sales represent the invoiced value of goods supplied less Sales Tax /
Value Added Tax.
i) INCOME FROM INVESTMENTS
Income from investments is included together with the related tax
credit in the Profit and Loss Account.
j) REPLANTING AND OTHER SUBSIDIES
Replanting and other subsidies of revenue nature are recognised as
income in the Profit and Loss Account.
k) FOREIGN CURRENCY TRANSACTIONS
Transactions in foreign currencies are recorded in rupees by applying
the exchange rate prevailing on the date of transaction. Transactions
remaining unsettled are translated at the rate of exchange ruling at
the end of the year. Exchange gain or loss arising on
settlement/translation is recognised in the Profit and Loss Account.
Premium or discount on forward contracts are amortised as expense or
income over the life of the contract. Foreign exchange forward
contracts are revalued at the Balance Sheet date and the exchange
difference is recognised as gain/loss in the Profit & Loss Account.
Profit or Loss on cancellations/renewals of forward contracts is
recognised in the Profit and Loss Account.
l) TAXES ON INCOME
Current tax represents the amount computed as per prevailing taxation
laws under the Income Tax Act, 1961.
Deferred Tax is recognized, subject to the consideration of prudence,
on timing differences, being the difference between taxable incomes and
accounting income that originate in one period and are capable of
reversal in one or more subsequent periods. Deferred Tax assets have
been recognized where there is reasonable certainty that sufficient
future taxable income will be available against which such deferred tax
assets can be realized.
m) BORROWING COSTS
Borrowing cost attributable to acquisition and/or construction of
qualifying assets are capitalised as a part of the cost of such assets
up to the date when such assets are ready for intended use. Other
borrowing costs are charged to Profit and Loss Account.
Lease payments under the Operating Lease are recognised as an expense
in the Profit & Loss Account, on a straight line basis over the lease