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Accounting Policies of Bharat Agri Fert & Realty Ltd. Company

Mar 31, 2014

(A) Basis of Preparation of Financial Statements:

The financial statements have been prepared under the historical cost convention except revaluation of Single Super Phosphate Plant Buildings and Sulphuric Acid Plant Buildings, on an accrual basis of accounting, in accordance with Generally Accepted Accounting Principles (GAAP) accepted in India; accounting standards issued by the Institute of Chartered Accountants of India, as applicable and as per the provisions of Companies Act, 1956.

(B) Use of Estimates:

The preparation of financial statement requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of financial statements and reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognised in the period in which the results are known / materialised.

(C) Fixed Assets and Depreciation:

i) Fixed Assets are stated at cost except Single Super Phosphate Plant Buildings and Sulphuric Acid Plant Buildings which were revalued on 31st March 2000, net of Cenvat and Value added tax less accumulated depreciation including impairment loss.

ii) Software is capitalised where it is expected to provide future enduring economic benefits. Capitalisation cost includes license fees, cost of implementation/system, integration services & incidental expenses related to its acquisition.

iii) Depreciation on Fixed Assets has been provided on Written Down Value Method at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956.

(D) Investments:

Long Term Investments are carried at cost less provision, if any, for permanent diminution in value of such investments. Provision for diminution in the value of long-term investments is made only if such a decline is other than temporary in the opinion of the management.

(E) Inventories:

a) Fertilser Division:

i) Raw Materials and Stores & Spares are valued at cost.

ii) Finished stocks are valued at cost or net realisable value whichever is lower.

iii) The valuation of inventories includes taxes, duties of non refundable nature and direct expenses, and other direct cost attributable to the cost of inventory, net of excise duty, education cess and value added tax.

b) Construction Division:

Inventory comprises completed property for sale and property under construction (Construction Work-in-Progress).

i) Completed unsold inventory is valued at lower of cost and net realisable value. Cost is determined by including cost of land (at book value), materials, services and other related proportionate overheads.

ii) Work-in-progress is valued at lower of cost and net realisable value. Cost comprises cost of land (at book value), materials, services and other proportionate overheads related to projects under construction.

(F) Provision for Current tax and Deferred tax

i) Tax on Income for the current period is determined on the basis of taxable income and tax credits computed in accordance with the provisions of the Income Tax Act 1961, and based on expected outcome of earlier year assessments/appeals.

ii) Deferred Tax resulting from "timing differences" between book and taxable profit is accounted for using the tax rates and laws that have been enacted or substantively enacted as on the Balance Sheet date.

iii) Deferred tax assets are recognized and carried forward to the extent that there is virtual certainty sufficient future taxable income will be available against which such deferred tax assets can be realised.

(G) Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Provisions are determined based on management estimates required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current management estimate. Contingent liabilities are not recognised but are disclosed in the notes. Contingent assets are neither recognised nor disclosed in the financial statements.

(H) Segment policies

The Company''s reporting segments are identified based on activities/products, risk and reward structure, organization structure and internal reporting systems.

(I) Earnings per share

The earnings considered in ascertaining the Company''s EPS is the net profit after tax. The number of shares used in computing basic EPS is the weighted average number of shares outstanding during the period. The weighted diluted earnings per equity share are computed using the weighted average number of equity shares and dilutive potential equity shares outstanding during the period.

(J) Revenue Recognition:

i) Sales of goods of Manufacturing Division are recognised on dispatches to the customers.

ii) Revenue from real estate is recognised on the transfer of all significant risks and rewards of ownership to the buyers by way of execution of documents. The Company has recognised the revenue on the basis of Percentage of Completion Method of accounting. Proportionate revenue is recognised in relation to sold area only. As per this method, revenue from sale of properties is recognised in Profit and Loss Account in proportion to the actual cost incurred as against the total estimated cost of the project, subject to such actual costs being 30% or more of the total estimated cost.

iii) Dividends are recognised when the right to receive the same is established.

(K) Turnover

Turnover includes sale of goods, net of excise duty, service tax and value added tax.

(L) Employee Benefits:

a) Short term employee benefits:

All employee benefits falling due wholly within twelve months of rendering the service are classified as short term employee benefits. The benefits like salaries, wages, short term compensated absences etc. and the expected cost of bonus, ex-gratia are recognised in the period in which the employee renders the related service.

b) Post-employment benefits:

i) Defined contribution plans: The state governed provident fund scheme, employee state insurance scheme and employee pension scheme are defined contribution plans. The contribution paid/payable under the schemes is recognised during the period in which the employee renders the related service.

ii) Defined benefit plans: The employees'' gratuity liability is a defined benefit plans. The present value of the obligation under such defined benefit plans is determined based on actuarial valuation using the Projected Unit Credit Method.

The obligation is measured at the present value of the estimated future cash flows.

(M) Cost of Construction/Development:

Cost of construction/development (including book value of land) incurred is charged to Profit & Loss Account proportionate to area sold. Adjustments, if required, are made on completion of the respective projects.

(N) Excise Duty

Excise duty has been accounted on the basis of payments made in respect of goods cleared. No excise duty provision has been made on closing inventory of finished goods.

(O) Leased Assets

Operating Leases: Assets acquired on lease where a significant portion of the risk and rewards of ownership are retained by the lessor are classified as operating leases. Lease Rentals are charged to the Profit and Loss account on an accrual basis.


Mar 31, 2013

(A) Basis of Preparation of Financial Statements:

The financial statements have been prepared under the historical cost convention except revaluation of Single Super Phosphate Plant Buildings and Sulphuric Acid Plant Buildings, on an accrual basis of accounting, in accordance with Generally Accepted Accounting Principles (GAAP) accepted in India; accounting standards issued by the Institute of Chartered Accountants of India, as applicable and as per the provisions of Companies Act, 1956.

(B) Use of Estimates:

The preparation of financial statement requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of financial statements and reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognised in the period in which the results are known / materialised.

(C) Fixed Assets and Depreciation:

i) Fixed Assets are stated at cost except Single Super Phosphate Plant Buildings and Sulphuric Acid Plant Buildings which were revalued on 31st March 2000, net of Cenvat and Value added tax less accumulated depreciation including impairment loss.

ii) Software is capitalised where it is expected to provide future enduring economic benefits. Capitalisation cost includes license fees, cost of implementation/system, integration services & incidental expenses related to its acquisition.

iii) Depreciation on Fixed Assets has been provided on Written Down Value Method at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956.

(D) Investments:

Long Term Investments are carried at cost less provision, if any, for permanent diminution in value of such investments. Provision for diminution in the value of long-term investments is made only if such a decline is other than temporary in the opinion of the management.

(E) Inventories:

a) Fertiiser Division:

i) Raw Materials and Stores & Spares are valued at cost.

ii) Finished stocks are valued at cost or net realisable value whichever is lower.

iii) The valuation of inventories includes taxes, duties of non refundable nature and direct expenses, and other direct cost attributable to the cost of inventory, net of excise duty, education cess and value added tax.

b) Construction Division:

Inventory comprises completed property for sale and property under construction (Construction Work-in-Progress).

i) Completed unsold inventory is valued at lower of cost and net realisable value. Cost is determined by including cost of land (at book value), materials, services and other related proportionate overheads.

ii) Work-in-progress is valued at lower of cost and net realisable value. Cost comprises cost of land (at book value), materials, services and other proportionate overheads related to projects under construction.

F) Provision for Current tax and Deferred tax

i) Tax on Income for the current period is determined on the basis of taxable income and tax credits computed in accordance with the provisions ofthe Income Tax Act 1961, and based on expected outcome of earlieryearassessments/appeals.

ii) Deferred Tax resulting from "timing differences" between book and taxable profit is accounted for using the tax rates and laws that have been enacted or substantively enacted as on the Balance Sheet date.

iii) Deferred tax assets are recognized and carried forward to the extent that there is virtual certainty sufficient future taxable income will be available against which such deferred tax assets can be realised.

(G) Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Provisions are determined based on management estimates required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current management estimate. Contingent liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognized nor disclosed in the financial statements.

(H) Segment policies

The Company''s reporting segments are identified based on activities/products, risk and reward structure, ganization structure and internal reporting systems.

(I) Earnings per share

The earnings considered in ascertaining the Company''s EPS is the net profit after tax. The number of shares used in computing basic EPS is the weighted average number of shares outstanding during the period. The weighted diluted earnings per equity share are computed using the weighted average number of equity shares and dilutive potential equity shares outstanding during the period.

(J) Revenue Recognition:

i) Sales of goods of Manufacturing Division are recognised on dispatches to the customers.

ii) Revenue from real estate is recognised on the transfer of all significant risks and rewards of ownership to the buyers by way of execution of documents. The Company has recognised the revenue on the basis of Percentage of Completion Method of accounting. Proportionate revenue is recognised in relation to sold area only. As per this method, revenue f-om sale of properties is recognised in Profit and Loss Account in proportion to the actual cost incurred as against the total estimated cost ofthe project, subject to such actual

(K) Turnover

Turnover includes sale of goods, net of excise duty, service tax and value added tax.

(L) Employee Benefits:

a) Short term employee benefits:

All employee benefits falling due wholly within twelve months of rendering the service are classified as short term employee benefits. The benefits like salaries, wages, short term compensated absences etc. and the expected cost of bonus, ex-gratia are recognised in the period in which the employee renders the related service.

b) Post-employment benefits:

i) Defined contribution plans: The state governed provident fund scheme, employee state insurance scheme and employee pension scheme are defined contribution plans. The contribution paid/payable under the schemes is recognised during the period in which the employee renders the related service.

ii) Defined benefit plans: The employees gratuity liability is a defined benefit plans. The present value of the obligation under such defined benefit plans is determined based on actuarial valuation using the Projected Unit Credit Method.

The obligation is measured at the present value of the estimated future cash flows. The discount rate used for determining the present value ofthe obligation under defined benefit plans, is based on the market yield on government securities of a maturity period equivalent to the weighted average maturity profile ofthe related obligations at the Balance Sheet date.

(M) Cost of Construction/Development:

Cost of construction/development (including book value of land) incurred is charged to Profit & Loss Account proportionate to area sold. Adjustments, if required, are made on completion ofthe respective projects.

(N) Allocation of Expenses:

Corporate employee remuneration, administration expenses and other overheads are allocated on the basis of appropriate ratios.

(O) Excise Duty

Excise duty has been accounted on the basis of payments made in respect of goods cleared. No excise duty provision has been made on closing inventory of finished goods,

(P) Leased Assets

Operating Leases: Assets acquired on lease where a significant portion of the risk and rewards of ownership are retained by the lessor are classified as operating leases. Lease Rentals are charged to the Profit and Loss account on an accrual basis.


Mar 31, 2012

(A) Basis of Preparation of Financial Statements:

The financial statements have been prepared under the historical cost convention except revaluation of Single Super Phosphate Plant Buildings and Sulphuric Acid Plant Buildings, on an accrual basis of accounting, in accordance with Generally Accepted Accounting Principles (GAAP) accepted in India; accounting standards issued by the Institute of Chartered Accountants of India, as applicable and as per the provisions of Companies Act, 1956.

(B) Use of Estimates:

The preparation of financial statement requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of financial statements and reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognised in the period in which the results are known / materialised.

(C) Fixed Assets and Depreciation:

i) Fixed Assets are stated at cost except Single Super Phosphate Plant Buildings and Sulphuric Acid Plant Buildings which were revalued on 31st March 2000, net of Cenvat and Value added tax less accumulated depreciation including impairment loss.

ii) Software is capitalised where it is expected to provide future enduring economic benefits. Capitalisation cost includes license fees, cost of implementation/system, integration services & incidental expenses related to its acquisition.

iii) Depreciation on Fixed Assets has been provided on Written Down Value Method at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956.

(D) Investments:

Long Term Investments are carried at cost less provision, if any, for permanent diminution in value of such investments. Provision for diminution in the value of long-term investments is made only if such a decline is other than temporary in the opinion of the management.

(E) Inventories:

a) Fertilser Division:

i) Raw Materials and Stores & Spares are valued at cost.

ii) Finished stocks are valued at cost or net realisable value whichever is lower.

iii) The valuation of inventories includes taxes, duties of non refundable nature and direct expenses, and other direct cost attributable to the cost of inventory, net of excise duty, education cess and value added tax.

iv) Excise Duty has not been provided on Closing stock Inventory. This, however do not have any impact on profit of the Company.

b) Construction Division:

Inventory comprises completed property for sale and property under construction (Construction Work-in-Progress).

i) Completed unsold inventory is valued at lower of cost and net realisable value. Cost is determined by including cost of land (at book value), materials, services and other related proportionate overheads.

ii) Work-in-progress is valued at lower of cost and net realisable value. Cost comprises cost of land (at book value), materials, services and other proportionate overheads related to projects under construction.

(F) Provision for Current tax and Deferred tax

i) Tax on Income for the current period is determined on the basis of taxable income and tax credits computed in accordance with the provisions of the Income Tax Act 1961, and based on expected outcome of earlier year assessments/appeals.

ii) Deferred Tax resulting from "timing differences" between book and taxable profit is accounted for using the tax rates and laws that have been enacted or substantively enacted as on the Balance Sheet date.

iii) Deferred tax assets are recognized and carried forward to the extent that there is virtual certainty sufficient future taxable income will be available against which such deferred tax assets can be realised.

(G) Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Provisions are determined based on management estimates required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current management estimate. Contingent liabilities are not recognised but are disclosed in the notes. Contingent assets are neither recognised nor disclosed in the financial statements.

(H) Segment policies

The Company's reporting segments are identified based on activities/products, risk and reward structure, organization structure and internal reporting systems.

(I) Earnings per share

The earnings considered in ascertaining the Company's EPS is the net profit after tax. The number of shares used in computing basic EPS is the weighted average number of shares outstanding during the period. The weighted diluted earning per equity share are computed using the weighted average number of equity shares and dilutive potential equity shares outstanding during the period.

(J) Revenue Recognition:

i) Sales of goods of Manufacturing Division are recognised on dispatches to the customers.

ii) Revenue from real estate is recognised on the transfer of all significant risks and rewards of ownership to the buyers by way of execution of documents. The Company has recognised the revenue on the basis of Percentage of Completion Method of accounting. Proportionate revenue is recognised in relation to sold area only. As per this method, revenue from sale of properties is recognised in Profit and Loss Account in proportion to the actual cost incurred as against the total estimated cost of the project, subject to such actual costs being 30% or more of the total estimated cost.

iii) Dividends are recognised when the right to receive the same is established.

(K) Turnover

Turnover includes sale of goods, net of excise duty, service tax and value added tax.

(L) Employee Benefits:

i) Short term employee Benefits: Short term employee Benefits are recognized as an expenses at the undiscounted amount in the Profit and Loss Account of the year in which related service is rendered.

(M) Cost of construction/development:

Cost of construction/development (including book value of land) incurred is charged to Profit & Loss Account proportionate to area sold. Adjustments, if required, are made on completion of the respective projects.

(N) Allocation of Expenses:

Corporate employee remuneration, administration expenses and other overheads are allocated on the basis of appropriate ratios.

(O) Excise Duty:

Excise duty has been accounted on the basis of payments made in respect of goods cleared. No excise duty provision has been made on closing inventory of finished goods.

p. Rights, preferences and restrictions attached to shares

Equity Shares:

The Company has only one class of shares referred to as equity shares having a par value of 10/-. Each holder of equity shares is entitled to one vote per share.

The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

During the year ended 31st March 2012 ,the amount of per share Interim dividend recognised as distributions to equity shareholders was Rs.Nil /-(P.Y.including final dividend Rs.Nil/-)

In the event of liquidation of the Company ,the holders of equity shares will be entitled to receive remaining assets of the Company after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

Terms Condition of Repayment and Details of Securities are as under :

1. The loan is Repayable on demand.

2. Cash Credit loan is secured by hypothecation of stock of raw material, semi-finished goods and finished goods, receivables (both present and future)

3. Cash Credit loan is secured by hypothecation of goods covered by bill supported by document to title of goods.

4. Cash Credit loan is secured by equitable mortgage on factory Land(measuring 18.36 acre) and buildings situated at village Kharivali, Tal-Wada, Dist-Thane.

5. Cash Credit loan is secured by hypothecation of Plant and machinery and all other movable fixed assets of the Company already in possession or to be in possession of the Company.

6. Cash Credit loan is secured by Personal guarantee of Shri Yogendra D. Patel (Promoter Director) and Anjni Y. Patel (Promoter Director)


Mar 31, 2011

(A) Basis of Preparation of Financial Statements:

The financial statements have been prepared under the historical cost convention except revaluation of Single Super Phosphate Plant Buildings and Sulphuric Acid Plant Buildings, on an accrual basis of accounting, in accordance with Generally Accepted Accounting Principles (GAAP) accepted in India; accounting standards issued by the Institute of Chartered Accountants of India, as applicable and as per the provisions of Companies Act, 1956.

(B) Use of Estimates:

The preparation of financial statement requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of financial statements and reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognised in the period in which the results are known / materialised.

(C) Fixed Assets and Depreciation:

i) Fixed Assets are stated at cost except Single Super Phosphate Plant Buildings

and Sulphuric Acid Plant Buildings which were revalued on 31st March 2000, net of Cenvat and Value added tax less accumulated depreciation including impairment loss.

ii) Software is capitalised where it is expected to provide future enduring economic benefits. Capitalisation cost includes license fees, cost of implementation/system, integration services & incidental expenses related to its acquisition.

iii) Depreciation on Fixed Assets has been provided on Written Down Value Method at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956.

(D) Investments:

Long Term Investments are carried at cost less provision, if any, for permanent diminution in value of such investments. Provision for diminution in the value of long-term investments is made only if such a decline is other than temporary in the opinion of the management.

(E) Inventories: a) Fertilser Division:

i) Raw Materials and Stores & Spares are valued at cost.

ii) Finished stocks are valued at cost or net realisable value whichever is lower.

iii) The valuation of inventories includes taxes, duties of non refundable nature and direct expenses, and other direct cost attributable to the cost of inventory, net of excise duty.education cess and value added tax.

b) Construction Division:

Inventory comprises completed property for sale and property under construction

(Construction Work-in-Progress).

i) Completed unsold inventory is valued at lower of cost and net realisable value. Cost is determined by including cost of land (at book value), materials, services and other related proportionate overheads.

ii) Work-in-progress is valued at lower of cost and net realisable value. Cost comprises cost of land (at book value), materials, services and other proportionate overheads related to projects under construction.

(F) Provision for Current tax and Deferred tax

I) Tax on Income for the current period is determined on the basis of taxable income and tax credits computed in accordance with the provisions of the Income Tax Act 1961, and based on expected outcome of earlier year assessments/appeals.

ii) Deferred Tax resulting from "timing differences" between book and taxable profit is accounted for using the tax rates and laws that have been enacted or substantivelyer. acted as on the Balance Sheet date.

iii) Deferred tax assets are recognized and carried forward to the extent that there is virtual certainty sufficient future taxable income will be available against which such deferred tax assets can be realised.

(G) Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Provisions are determined based on management estimates required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current management estimate. Contingent liabilities are not recognised but are disclosed in the notes. Contingent assets are neither recognised nor disclosed in the financial statements.

(H) Segment policies

The Company's reporting segments are identified based on activities/products, risk and reward structure, organization structure and internal reporting systems.

(I) Earnings per share

The earnings considered in ascertaining the Company's EPS is the net profit after tax. The number of shares used in computing basic EPS is the weighted average number of shares outstanding during the period. The weighted diluted earnings per equity share are computed using the weighted average number of equity shares and dilutive potential equity shares outstanding during the period.

(J) Revenue Recognition:

I) Sales of goods of Manufacturing Division are recognised on dispatches to the customers.

ii) Revenue from real estate is recognised on the transfer of all significant risks and rewards of ownership to the buyers by way of execution of documents. The Company hasrecognised the revenue on the basis of Percentage of Completion Method of accounting.Proportionate revenue is recognised in relation to sold area only. As per this method, revenue from sale of properties is recognised in Profit and Loss Account in proportion to the actual cost incurred as against the total estimated cost of the project, subject to such actual costs being 30% or more of the total estimated cost.

iii) Dividends are recognised when the right to receive the same is established.

(K) Turnover

Turnover includes sale of goods, net of excise duty, service tax and sales tax.

(L) Employee Benefits:

i) Short term employee Benefits: Short term employee Benefits are recognized as an expenses at the undiscounted amount in the Profit and Loss Account of the year in which related service is rendered.

(M) Cost of construction/development:

Cost of construction/development (including book value of land) incurred is charged to Profit & Loss Account proportionate to area sold. Adjustments, if required, are made on completion of the respective projects.

(N) Allocation of Expenses:

Common construction expenses are allocated on the basis of ratio of area under construction of each building. Corporate employee remuneration, administration expenses and other overheads are allocated on the basis of turnover ratio of the respective divisions.


Mar 31, 2010

(A) Basis of Preparation of Financial Statements:

The financial statements have been prepared under the historical cost convention except revaluation of Single Super Phosphate plant buildings and Sulphuric Acid plant buildings, on an accrual basis of accounting, in accordance with Generally Accepted Accounting Principles (GAAP) accepted in India; accounting standards issued by the Institute of Chartered Accountants of India, as applicable and as perthe provisions of Companies Act, 1956.

(B) Use of Estimates:

The preparation of financial statement requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of financial statements and reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognised in the period in which the results are known / materialised.

(C) Fixed Assets and Depreciation:

i) Fixed Assets are stated at cost except Single Super Phosphate Plant Buildings and

Sulphuric Acid Plant Buildings which were revalued on 31sl March 2000, net of Cenvat and Value added tax less accumulated depreciation including impairment loss. The assets, which cannot be used for production, are written off.

ii) Software is capitalised where it is expected to provide future enduring economic Capitalisation cost includes license fees, cost of implementation/system, integration services & incidental expenses related to its acquisition.

iii) Accounting for Goodwill is on the basis of Accounting for Fixed Assets (AS-10).

iv) Depreciation on Fixed Assets has been provided on Written Down Value Method at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956.

(D) Investments:

Long Term Investments are carried at cost less provision, if any, for permanent diminution in value of such investments. Provision for diminution in the value of long-term investments is made only if such a decline is other than temporary in the opinion of the management.

(E) Inventories:

a) Fertilser Division:

i) Raw Materials and Stores & Spares are valued at cost.

ii) Finished stocks are valued at cost or net realisable value whichever is lower.

iii) The valuation of inventories includes taxes, duties of non refundable nature and direct expenses, and other direct cost attributable to the cost of inventory, net of excise duty/counter veiling duty/education cess and value added tax.

b) Construction Division:

Real estate under development comprises undivided interest in the freehold land at book value and cost relating to construction. Cost is determined by including cost of land (at book value), materials, services and other related proportionate overheads.

(F) Provision for Current tax and Deferred tax

i) Tax on Income for the current period is determined on the basis of taxable income and tax credits computed in accordance with the provisions of the Income Tax Act 1961, and based on expected outcome of earlieryear assessments/appeals. ii) Deferred Tax resulting from "timing differences" between book and taxable profit is accounted for using the tax rates and laws that have been enacted and substantively enacted as on the Balance Sheet date.

iii) Deferred tax assets are recognized and carried forward to the extent that there is virtual certainty as the case may be that sufficient future taxable income will be available against which such deferred tax assets can be realised.

(G) Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognised but are disclosed in the notes. Contingent assets are neither recognised no." disclosed in the financial statements.

(H) Revenue Recognition:

i) Sales of goods of Manufacturing Division are recognised on dispatches to the customers.

ii) Dividends are recognised when the right to receive them is established.

iii) The Company has recognised the revenue on the basis of Percentage of Completion Method of accounting. Proportionate revenue is recognised in relation to sold area only.

(I) Turnover

Turnover includes sale of goods, net of sales tax and excise duty.

(J) Retirement Benefits:

i) Companys contribution to provident fund and family pension fund are charged to the Profit and Loss Account.

(k) Cost of construction/development:

Cost of construction/development (including book value of land) incurred is charged to Profit & Loss Account proportionate to area sold.

 
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