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Accounting Policies of Basant Agro Tech (India) Ltd. Company

Mar 31, 2016

a. Company Background

The Company is the manufacturer of various farm inputs in India comprising of NPK mixture, granulated fertilizers, phosphatic fertilizer as well as various hybrid seeds. The company production facilities are located in different states like Maharashtra, Karnataka, and Madhya Pradesh. The company also engaged in business of generating power through Wind Turbine and operating and maintaining warehousing and cold storage facilities.

b. Basis of preparation of financial statements:

“These Financial Statements have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) under the historical cost convention on accrual basis, and are in conformity with mandatory accounting standards, as prescribed under Section 133 of the Companies Act, 2013 (‘ACT’) read with rule 7 of the Companies (Accounts) Rules, 2014.

c. Use of estimates:

The preparation of financial statements in conformity with Indian GAAP requires management to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures of contingent liabilities on the date of financial statements and reported amounts of revenue and expenses for that year. Difference between the actual results and estimates are recognized in the period in which the results are known/ materialized.

d. Fixed assets:

i. Tangible Fixed Assets are carried at their historical cost of acquisition or construction less accumulated depreciation/ amortization and impairment losses, if any. Cost including all costs incurred to bring the assets to their present location and condition. Additional capital expenditure after its cost of acquisition or construction was capitalized only if such capital expenditure result in an increase in future benefits from such assets. The tangible fixed assets which are not yet ready for their intended use are carried at all cost incurred on those assets under the head Capital work in progress.

ii. The Company assesses at each balance sheet date whether there is any indication that any asset may be impaired. An asset is treated as impaired when the carrying cost of the asset exceeds the recoverable value and in such case the carrying value of such asset is reduced to its estimated recoverable amount and the amount of such impairment loss is charged to profit and loss account. If at the balance sheet date there is an indication that a previously assessed impairment loss no longer exist, then such loss is reversed and the asset is restated to that effect.

e. Depreciation and amortization:

i. Depreciation on fixed assets is provided on pro rata on straight line method over the useful lives of assets as prescribed in Schedule - II of the Companies Act, 2013.

ii. The depreciation amount is the cost of the asset less its estimated residual value spread over its estimated useful life. The amortization period are reviewed at the end of the financial year on basis of the certificate of technical experts.

iii The depreciation for assets purchased/ sold during a period is proportionately charged.

f. Investments:

Investments are classified into current investments and noncurrent investments. Noncurrent investments are valued at cost or below cost whenever there is a diminution in the value thereof (scrip wise) of a permanent nature.

g. Inventories :

i. The stock of finished goods, raw materials, stores & spares, packing materials and other consumables are valued at cost or net realizable value. Cost is either weighted average cost or specific identification as applicable.

ii. Stock in process is valued at estimated cost or net realizable value which ever less.

h. Revenue recognition :

1) i. Revenue / income and costs/expenditures are generally accounted on accrual, as they are earned or incurred.

ii. Sale of goods is recognized on transfer of significant risk and reward of ownership which is generally on the dispatch of goods.

iii. Sales are inclusive of freight & forwarding charges except where the same is recoverable from customers.

iv. Subsidy on sale of single super phosphate fertilizers receivable from Ministry of Chemicals and Fertilizers is credited to subsidy account under the group head sales in the statement of profit & loss at the time of sale. Subsidy on SSP fertilizers sold in 2015-2016 was Rs. 47.21 Crs. (Previous Year : Rs. 34.63 Crs.)

v. The rent of warehouses are accounted on accrual basis.

vi. Income from power generation is accounted on accrual basis, base on unit generated and billed.

2) Revenue in respect of insurance / other claims, interest etc. is recognized only when it is reasonably certain that the ultimate collection will be made.

3) Interest income is accounted for on accrual basis.

i. Government Grants :

Grants received against specific fixed assets are adjusted to the cost of the assets and those in the nature of promoter’s contributions are credited to Capital Reserve. Revenue Grants are recognized in the Profit and Loss Statement in accordance with related scheme and in the period in which these are accrued.

j. Foreign currency transactions :

Transactions denominated in foreign currencies are recorded at the exchange rate prevailing at the date of transaction. All exchange differences arising out of transactions are recognized in the Statement of profit and loss. Monetary asset and liabilities denominated in foreign currency are translated of the year ended rate.

k. Borrowing Costs:

Borrowing costs include interest paid on various secured and unsecured loans availed by the Company. The borrowing costs attributable to the acquisition or construction of asset are capitalized as a part of the cost of such assets upto the date the said asset is put to use.

l. Segment reporting:

The Company identifies primary segments based on its contribution to the total revenue and the organization structure. Segment revenue, segment expenses, segment assets and segment liabilities have been identified to the segments on the basis of their relationship to the operating activities of the segment. The assets and liabilities which relate to the Company as a whole and are not allocable to any segment have been included under the head unallocable assets/ liabilities.

m. Employee benefits :

i. Short term employee benefits including termination benefit are recognized as an expense in the statement of profit & loss of the year in which the related service is rendered.

ii. Provident fund contributions are accounted for on accrual basis & are recognized as expenditure in the statement of profit & loss.

iii. In respect of gratuity liability, the company has taken a group policy, premium whereof is paid annually to Insurance Company based on their actuarial valuation and is recognized as expenses in the profit & loss statement in the year in which it is incurred. Gratuity liabilities are funded and administered through group gratuity scheme with Insurance Company.

n. Taxation:

Provision for the current tax is the amount of tax payable on the taxable income for the current financial year as determined in accordance with the provision of Income Tax Act, 1961. Income tax expense comprises current tax and deferred tax charge or tax credit (reflecting the tax effects of timing differences between accounting income and taxable income for the year). Tax credit is recognized in respect of Minimum Alternate Tax (MAT) as per the provisions of Section 115JB of the Income tax Act, 1961 as an asset in the Balance sheet when it is probable that future economic benefits associated with it will flow to the Company.

The deferred tax for timing differences between the book and tax profits for the year is accounted for, using the tax rates and laws that have been substantively enacted as of the balance sheet date.

Deferred tax assets arising from timing differences are recognized to the extent there is reasonable certainty that these would be realized in future and are reviewed for the appropriateness of their respective carrying value at each balance sheet date.

o. Provisions, contingent liabilities and contingent assets :

i. Provisions : Provisions are recognized when there is a present obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and there is a reliable estimate of amount of the obligation.

ii. Contingent liabilities : Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed out by the occurrence or non occurrence of one or more uncertain future event not wholly within the control of the company or a present obligation that arises from past events when it is either not probable that an outflow of resources will be required to settle or a reliable estimates of the amount cannot be made.

iii. Contingent assets : Contingent assets are neither recognized nor disclosed in the financial statement.

p. Related Party Disclosure :

No amount in respect of related parties have been written off / written back or provided for during the year. Related party relationship have been identified by the management and relied upon by the auditors. All related party transactions were made in the ordinary course of business and on arms length basis.

q. Earnings per share:

Basic earnings per share are calculated by dividing the net profit after tax for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year duly adjusted for bonus issue, rights issue, share split or consolidation of shares.

r. Research & development expenditure:

i. Capital expenditure in respect of research & development activity is included in addition to fixed assets.

ii. Revenue expenditure on research and development is shown separately in Statement of Profit & Loss Account.


Mar 31, 2014

A. Basis of preparation of financial statements :

i. The financial statements have been prepared under the historical cost convention in accordance with the applicable accounting principles and comply with notified accounting standards as referred to in Section 211(3C) and other relevant provisions of Companies Act 1956, subject to what is stated herein below, as adopted consistently by Company, according to the circular No. 15/2013 dt. 13/9/2013 read with circular No. 08/2014 dt. 4/4/2014.

ii. Company generally follows Mercantile System of accounting and recognises significant items of income & expenditure on accrual basis.

b. Use of estimates :

The preparation of financial statements in conformity with generally accepted accounting principles (GAAP) requires management to make judgements, estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures of contingent liabilities on the date of financial statements and reported amounts of revenue and expenses for that year. Actual result could differ from these estimates. Any revision to accounting estimates is recognised prospectively in current and future periods.

c. Fixed assets :

i. Fixed Assets are stated at cost of acquisition or construction less depreciation. In accordance with the provisions of AS-28, if the carrying amount of fixed assets exceeds the recoverable amount on the reporting date, the carrying amount is reduced to the recoverable amount. The cost of fixed assets includes interest on borrowings attributable to the acquisition of the said fixed assets upto the date of commissioning of that assets.

ii. The Company assesses at each balance sheet date whether there is any indication that any asset may be impaired. If any such indication exists, the carrying value of such asset is reduced to its estimated recoverable amount and the amount of such impairment loss is charged to profit and loss account. If at the balance sheet date there is an indication that a previously assessed impairment loss no longer exist, then such loss is reversed and the asset is restated to that effect.

d. Depreciation and amortisation :

i. Depreciation on fixed assets is provided on straight line method at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956. Leasehold land has not been written off as lease agreement is yet to be executed.

ii. An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to the profit & loss account in the year in which an asset is identified as impaired.

e. Investments :

Investments are classified into current investments and long term investments. Long term investments are valued at cost or below cost whenever there is a diminution in the value thereof (scrip wise) of a permanent nature.

f. Inventories :

i. The stock of finished goods, raw materials, stores & spares, packing materials and other consumables are valued at cost or net realisable value whichever is lower. Cost is either average cost or specific identification as applicable. ii. Stock in process is valued at estimated cost.

g. Employee benefits :

i. Short term employee benefits are recognised as an expense in the profit & loss account of the year in which the related service is tendered. ii. Provident fund dues are accounted for on accrual basis. iii. I n respect of gratuity liability, the company has taken a group policy, premium whereof is paid annually to Life Insurance Corporation of India based on their actuarial valuation. Gratuity liabilities are funded and administered through group gratuity scheme with Life Insurance Corporation of India. h. Revenue recognition : Sales :

1) i. Sales are inclusive of freight & forwarding charges wherever recoverable from customers.

ii. Subsidy on sale of single super phosphate fertilizers receivable from Ministry of Chemicals and Fertilizers credited to subsidy account under the group head sales in the Profit & Loss Account at the time of sale. Subsidy on SSP fertilizers sold in 2013-2014 was Rs. 31.62 Crs. (previous year : 42.51 Crs.)

2) Revenue in respect of insurance / other claims, interest etc. is recognised only when it is reasonably certain that the ultimate collection will be made.

i. Foreign currency transactions :

Transaction denominated in foreign currencies are recorded at the exchange rate prevailing on the date of transaction or that approximates the actual rate, at the date of transaction.

j. Excise duty / Value Added Tax :

Excise duty is accounted on the basis of payments made in respect of goods cleared. Sales tax / VAT paid is charged to Profit and Loss account.

k. Research & development expenditure :

i. Capital expenditure in respect of research & development activity is amortised over the period of three years. ii. Revenue expenditure on research and development shown separately in Profit & Loss Account

l. Taxation :

Provision for the current tax is made on the basis of estimated taxable income for the current accounting year in accordance with the Income Tax Act, 1961. Income tax expense comprises current tax and deferred tax charge or credit (reflecting the tax effects of timing differences between accounting income and taxable income for the year). The deferred tax for timing differences between the book and tax profits for the year is accounted for, using the tax rates and laws that have been substantively enacted as of the balance sheet date. Deferred tax assets arising from timing differences are recognized to the extent there is reasonable certainty that these would be realized in future and are reviewed for the appropriateness of their respective carrying value at each balance sheet date. Tax credit is recognized in respect of Minimum Alternate Tax (MAT) as per the provisions of Section 115JB of the Income tax Act, 1961 based on convincing evidence that the Company will pay normal income tax within the statutory time frame and is reviewed at each balance sheet date.

m. Provision for contingent liabilities and contingent assets :

i. Provisions involving substantial degree of estimation in measurement are recognized when there is present obligation as a result of past events and it is probable that there will be outflow of resources. ii. Disclosures for a contingent liability is made, without a provision in books, when there is an obligation that may, but probably will not, require outflow of resources. Contingent assets are neither recognized nor disclosed in the financial statement.

n. Related party transactions :

All related party transactions are negotiated on arms length basis and are intended to protect the interest of the Company. None of the transaction with any of the related parties was in conflict with the interest of the Company.

Rights attached to equity shares

The Company has only one class of equity share of face value of Rs. 1/-per share.Each holder of equity share is entitled to 1 vote per share. The company declares and pays dividend on equity shares in Indian Rupee and the dividend proposed by the board is subject to approval of shareholders in the ensuing Annual General Meeting.

(*) The company has not received any intimation from the supplier regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosures if any relating to amounts unpaid as at the year end together with the interest paid / payable as required under the said Act have not been given.


Mar 31, 2013

A. Basis of preparation of financial statements:

i) The financial statements have been prepared under the historical cost convention in accordance with the applicable accounting principles and comply with notified accounting standards as referred to in Section 211(3C) and other relevant provisions of Companies Act, 1956, subject to what is stated herein below, as adopted consistently by Company.

ii) Company generally follows Mercantile System of accounting and recognises significant items of Income & Expenditure on accrual basis.

b. Use of estimates:

The preparation of financial statements in conformity with generally accepted accounting principles (GAAP) requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures of contingent liabilities on the date of financial statements and reported amounts of revenue and expenses for that year. Actual result could differ from these estimates. Any revision to accounting estimates is recognised prospectively in current and future periods.

c. Fixed assets:

i) Fixed Assets are stated at cost of acquisition or construction less depreciation. In accordance with the provisions of AS-28, if the carrying amount of fixed assets exceeds the recoverable amount on the reporting date, the carrying amount is reduced to the recoverable amount. The cost of fixed assets includes interest on borrowings attributable to the acquisition of the said fixed assets upto the date of commissioning of that assets.

ii) The Company assesses at each balance sheet date whether there is any indication that any asset may be impaired. If any such indication exists, the carrying value of such asset is reduced to its estimated recoverable amount and the amount of such impairment loss is charged to profit and loss account. If at the balance sheet date there is an indication that a previously assessed impairment loss no longer exist, then such loss is reversed and the asset is restated to that effect.

d. Depreciation and amortisation:

Depreciation on Fixed Assets is provided on straight line method at the rates and in the manner prescribed in Schedule XIV to the Companies Act,1956. Leasehold land has not been written off as lease agreement is yet to be executed.

e. Investments:

Investments are classified into current investments and long term investments. Long term investments are valued at cost or below cost whenever there is a diminution in the value thereof (scrip wise) of a permanent nature.

f. Inventories:

i. The stock of Finished Goods, Raw Materials, Stores & Spares, Packing Materials and other consumables are valued at cost or net realisable value whichever is lower. Cost is either average cost or specific identification as applicable.

ii. Stock in process is valued at estimated cost.

g. Employee benefits:

i. Short term employee benefits are recognised as an expense at the amount in the profit & loss account of the year in which the related service is tendered.

ii. Provident Fund dues are accounted for on accrual basis.

iii. In respect of Gratuity Liability, the company has taken a group policy, premium whereof is paid annually to Life Insurance Corporation of India based on their actuarial valuation. Gratuity liabilities are funded and administered through Group Gratuity Scheme with Life Insurance Corporation of India.

h. Revenue recognition: Sales:

1) i. Sales are inclusive of freight & forwarding charges wherever recoverable from customers.

ii. Subsidy on sale of Single Super Phosphate fertilizers receivable from Ministry of chemicals & fertilisers credited to subsidy account under the group head sales in the Profit & Loss Account at the time of sale. Subsidy on SSP fertilizers sold in 2012-13 is Rs. 42.51 Cr. (Previous year Rs. 93.73 Cr.)

2) Revenue in respect of insurance / other claims, interest etc. is recognised only when it is reasonably certain that the ultimate collection will be made.

i. Foreign Currency Transactions:

Transaction denominated in foreign currencies are recorded at the exchange rate prevailing on the date of transaction or that approximates the actual rate, at the date of transaction. Monetary items denominated in foreign currencies at the year end are stated at year end rates.

j. Excise Duty / Value Added Tax:

Excise Duty is accounted on the basis of payments made in respect of goods cleared. Sales tax / VAT paid is charged to Profit and Loss account.

k. Research & Development expenditure:

i. Capital Expenditure in respect of Research & Development activity is amortised over the period of three years. ii. Revenue expenditure on Research and Development shown separately in Profit & Loss Account

l. Taxation:

Provision for the current tax is made on the basis of estimated taxable income for the current accounting year in accordance with the Income Tax Act, 1961. Income tax expense comprises current tax and deferred tax charge or credit (reflecting the tax effects of timing differences between accounting income and taxable income for the year). The deferred tax for timing differences between the book and tax profits for the year is accounted for, using the tax rates and laws that have been substantively enacted as of the balance sheet date. Deferred tax assets arising from timing differences are recognized to the extent there is reasonable certainty that these would be realized in future and are reviewed for the appropriateness of their respective carrying value at each balance sheet date. Tax credit is recognized in respect of Minimum Alternate Tax (MAT) as per the provisions of Section 115JB of the Income tax Act, 1961 based on convincing evidence that the Company will pay normal income tax within statutory time frame & is reviewed at each balance sheet date.

m. Provision for contingent liabilities and contingent assets:

i. Provisions involving substantial degree of estimation in measurement are recognized when there is present obligation as a result of past events and it is probable that there will be outflow of resources. ii. Disclosures for a contingent liability is made, without a provision in books, when there is an obligation that may, but probably will not, require outflow of resources. Contingent Assets are neither recognized nor disclosed in the financial statement.


Mar 31, 2012

A. Basis of preparation of financial statements :

i) The financial statements have been prepared under the historical cost convention in accordance with the applicable accounting principles and comply with notified accounting standards as referred to in Section 211(3C) and other relevant provisions of Companies Act 1956, subject to what is stated herein below, as adopted consistently by Company.

ii) Company generally follows Mercantile System of accounting and recognises significant items of Income & Expenditure on accrual basis.

b. Use of estimates :

The preparation of financial statements in conformity with generally accepted accounting principles (GAAP) requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures of contingent liabilities on the date of financial statements and reported amounts of revenue and expenses for that year. Actual result could differ from these estimates. Any revision to accounting estimates is recognised prospectively in current and future periods.

c. Fixed assets :

i) Fixed Assets are stated at cost of acquisition or construction less depreciation. In accordance with the provisions of AS-28, if the carrying amount of fixed assets exceeds the recoverable amount on the reporting date, the carrying amount is reduced to the recoverable amount. The cost of fixed assets includes interest on borrowings attributable to the acquisition of the said fixed assets upto the date of commissioning of that assets.

ii) The Company assesses at each balance sheet date whether there is any indication that any asset may be impaired. If any such indication exists, the carrying value of such asset is reduced to its estimated recoverable amount and the amount of such impairment loss is charged to profit and loss account. If at the balance sheet date there is an indication that a previously assessed impairment loss no longer exist, then such loss is reversed and the asset is restated to that effect.

d. Depreciation and amortisation :

i. Depreciation on Fixed Assets is provided on straight line method at the rates and in the manner prescribed in Schedule XIV to the Companies Act,1956. Leasehold land has not been written off as lease agreement is yet to be executed.

ii. An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to the Profit & Loss Account in the year in which an asset is identified as impaired.

e. Investments :

Investments are classified into current Investments and long term Investments. Long term Investments are valued at cost or below cost whenever there is a diminution in the value thereof (scrip wise) of a permanent nature.

f. Inventories :

i. The stock of Finished Goods, Raw Materials, Stores & Spares, Packing Materials and other consumables are valued at cost or net realisable value whichever is lower. Cost is either average cost or specific identification as applicable.

ii. Stock in process is valued at estimated cost.

g. Employee benefits :

i. Short term employee benefits are recognised as an expense at the amount in the profit & loss account of the year in which the related service is tendered.

ii. Provident Fund dues are accounted for on accrual basis.

iii. In respect of Gratuity Liability, the company has taken a group policy, premium whereof is paid annually to Life Insurance Corporation of India based on their actuarial valuation.Gratuity liabilities are funded and administered through Group Gratuity Scheme with Life Insurance Corporation of India.

h. Revenue recognition : Sales :

1) I. Sales are inclusive of freight & forwarding charges wherever recoverable from customers.

II. Subsidy on sale of Single Super Phosphate fertilizers receivable from Ministry of fertilisers credited to subsidy account under the group head sales in the Profit & Loss Account at the time of sale.

2) Revenue in respect of insurance/other claims, interest etc. is recognised only when it is reasonably certain that the ultimate collection will be made.

i. Foreign Currency Transactions :

Transaction denominated in foreign currencies are recorded at the exchange rate prevailing on the date of transaction or that approximates the actual rate, at the date of transaction.

j. Excise Duty/Value Added Tax :

Excise Duty is accounted on the basis of payments made in respect of goods cleared. Sales tax/VAT paid is charged to Profit and Loss account.

k. Research & Development expenditure :

i) Capital Expenditure in respect of Research & Development activity is amortised over the period of three years.

ii) Revenue expenditure on Research and Development shown separately in Profit & Loss Account.

l. Taxation :

Provision for the current tax is made on the basis of estimated taxable income for the current accounting year in accordance with the Income Tax Act, 1961.Income tax expense comprises current tax and fringe benefit tax (i.e. amount of tax for the period determined in accordance with the income tax law) and deferred tax charge or credit (reflecting the tax effects of timing differences between accounting income and taxable income for the year).The deferred tax for timing differences between the book and tax profits for the year is accounted for, using the tax rates and laws that have been substantively enacted as of the balance sheet date. Deferred tax assets arising from timing differences are recognized to the extent there is reasonable certainty that these would be realized in future and are reviewed for the appropriateness of their respective carrying value at each balance sheet date. Tax credit is recognized in respect of Minimum Alternate Tax (MAT) as per the provisions of Section 115JB of the Income tax Act, 1961 based on convincing evidence that the Company will pay normal income tax within the statutory time frame and is reviewed at each balance sheet date.

m. Provision for contingent liabilities and contingent assets :

i) Provisions involving substantial degree of estimation in measurement are recognized when there is present obligation as a result of past events and it is probable that there will be outflow of resources.

ii) Disclosures for a contingent liability is made, without a provision in books, when there is an obligation that may, but probably will not, require outflow of resources. Contingent Assets are neither recognized nor disclosed in the financial statement.


Mar 31, 2010

A. Basis of preparation of financial statements

i) The financial statements have been prepared under the historical cost convention in accordance with the applicable accounting principles and provisions of Companies Act 1956, subject to what is stated herein below, as adopted consistently by Company.

ii) Company generally follows Mercantile System of accounting and recognises significant items of Income & Expenditure on accrual basis.

b. Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles (GAAP) requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures of contingent liabilities on the date of financial statements and reported amounts of revenue and expenses for that year. Actual result could differ from these estimates. Any revision to accounting estimates is recognised prospectively in current and future periods.

c. Capital Incentives.

Capital Incentives received/receivable from Government towards fresh capital investment has been reduced from cost of acquisition of respective fixed Assets as per AS12. "Accounting of Government Grants." d Fixed assets

i) Fixed Assets are stated at cost of acquisition or construction less depreciation. In accordance with the provisions of AS-28 , if the carrying amount of fixed assets exceeds the recoverable amount on the reporting date , the carrying amount is reduced to the recoverable amount.The cost of fixed assets includes interest on borrowings attributable to the acquisition of the said fixed assets upto the date of commissioning of that assets.

ii) The Company assesses at each balance sheet date whether there is any indication that any asset may be impaired. If any such indication exists, the carrying value of such asset is reduced to its estimated recoverable amount and the amount of such impairment loss is charged to profit and loss account. If at the balance sheet date there is an indication that a previously assessed impairment loss no longer exist, then such loss is reversed and the asset is restated to that effect.

e. Depreciation

Depreciation on Fixed Assets is provided on straight line method at the rates and in the manner prescribed in Schedule XIV to the Companies Act,1956. Leasehold land has not been written off as lease agreement is yet to be executed.

f. Investments

Investments are classified into current Investments and long term Investments. Long term Investments are valued at cost or below cost whenever there is a diminution in the value thereof (scrip wise) of a permanent nature.

g. Inventories

i. The stock of Finished Goods,Raw Materials, Stores & Spares, Packing Materials and other consumables are valued at cost or net realisable value whichever is lower. Cost is either average cost or specific identification as applicable.

ii. Stock in process is valued at estimated cost.

h. Retirement benefits

i. Provident Fund dues are accounted for on accrual basis.

ii. In respect of Gratuity Liability, the company has taken a group policy, premium whereof is paid annually to Life Insurance Corporation of India based on their acturial valuation.

iii. In the absence of information in respect of Gratuity (defined benefit scheme) from the Actuary, disclosure as required under AS

15 (Revised) - "Employee Benefit" has not been given. i. Revenue recognition Sales: i) a) Sales are inclusive of freight & forwarding charges wherever recoverable from customers.

b) Subsidy on sale of Single Super Phosphate fertilizers credited to subsidy account under the group head sales in the Profit & Loss Account at the time of sale. ii) Revenue in respect of insurance/other claims, interest etc. is recognised only when it is reasonably certain that the ultimate collection will be made.

j. Research & development expenditure

i) Capital Expenditure in respect of Research & Development activity is amortised over the period of three yeaiS. ii) Revenue expenditure on Research and Development shown separately in Profit & Loss Account k. Revenue and Expenses related to Agricultural activities has been clubbed with seeds Division.

K. Taxation

Provision for the current tax is made on the basis of estimated taxable income for the current accounting year in accordance with the Income Tax Act, 1961.Income tax expense comprises current tax (i.e. amount of tax for the period determined in accordance with the income tax law) and deferred tax charge or credit (reflecting the tax effects of timing differences between accounting income and taxable income for the year).The deferred tax for timing differences between the book and tax profits for the year is accounted for, using the tax rates and laws that have been substantively enacted as of the balance sheet date. Deferred tax assets arising from timing differences are recognized to the extent there is reasonaole certainty that these would be realized in future and are reviewed for the appropriateness of their respective carrying vaiiMat etc. < balance sheet date. Tax credit is recognized in respect of Minimum Alternate Tax (MAT) as per the provisions of S" 115JB of the Income tax Act, 1961 based on convincing evidence that the Company wiil pay normal income tax within the sf cry time frame and is reviewed at each balance sheet date.

m. Provision for contingent liabilities and contingent assets

i) Provisions involving substantial degree of estimation in measurement are recognized when there is present obligation as a result of past events and it is probable that there will be outflow of resources.

ii) Disclosures for a contingent liability is made, without a provision in books, when there is an obligation that may.but probably will not, require outflow of resources. Contingent Assets are neither recognized nor disclosed in the financial statement.

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