Dabur Foods Limited Audited Balance Sheet and Profit & Loss ...

Schedules annexed to and forming part of the accounts for the year ended 31st March, 2005 (Contd...)9. Retirement benefits• Liability of Gratuity to employees is determined on the basis of contribution made to Life Insurance Corporationof India from whom the company has taken the Group Gratuity Insurance policy.• Liability for leave encashment benefit determined on the basis of contribution made to Life Insurance Corporationof India from whom the company has taken the Leave Encashment policy• Contributions to defined contribution schemes such as Provident Fund and Family Pension Fund are charged toprofit & Loss Account as incurred.10. Borrowing CostBorrowing cost that are attributable to acquisition of qualifying assets are capitalized as part of the cost of suchassets. All other borrowing costs are charged to revenue.11. Taxes on income• Deferred tax amount is recognized subject to the consideration of the prudence on the tax effect of timingdifference between the taxable income and accounting income computed for the current accounting year andreversal of earlier year timing difference.• Deferred Tax assets are recognized and carried forward to the extent there is a reasonable certainty exceptarising from unabsorbed depreciation and carry forward losses which are recognized to the extent that there isvirtual certainty that sufficient future taxable income will be available against such deferred tax assets.12. Cash flow statementCash flows are reported using the indirect method, whereby net profit before tax is adjusted for the effects oftransactions of a non-cash nature and any deferrals of accruals of past or future cash receipts or payments. The cashflows from regular revenue generating; investing and financing activities of the company are segregated.B. NOTES TO ACCOUNTS1. The company has provided Rs 2.64 (previous period Rs 3.40) as liability accruing on account of deferred entitlementtowards LTC. (Refer Para 6 of Accounting Policies).2. Contingent Liabilities (Disclosed in terms of AS-29 issued by ICAI which becomes mandatory with effect from 01.04.2004)• Bank Guarantees issued by banks on behalf of the company Rs.3.20 (previous year Rs.12.05).• In respect of Letters of Credit Rs. 572.66 (previous year Rs. 732.30).• Sales TaxA demand of Rs.85.52 has been issued against the company due to dispute over taxability of the food products. Thecompany has filed an appeal before the DC (Appeals), Delhi and the same is pending for hearing. The company hasbeen legally advised that no provision is necessary as the probability of crystallization of the liability is very remote.• Estimated Amount of contract remaining to be executed on capital Account Rs.300 net of advance (Previous yearRs.Nil)3. The company has entered into an agreement with Dabur India Ltd., its holding company, for exclusive rights to usetrademarks Real, Hommade and Lemoneez in the domestic market.4 Balances of Sundry Creditors and Debtors are subject to confirmation.5. Particulars of consumption of Important Raw Materials(Rs. In lac)Class of Goods2004-2005 2003-2004Qty.(In MT)ValueQty.(In MT)ValueMango 1967.60 203.27 1393.10 82.14Mango Pulp 1767.00 322.19 -Others 452.43 180.13977.89 262.27Dabur Foods Limited • Annual Report 2004-051618