Accounting Policies of BKV Industries Ltd. Company

Mar 31, 2015

1. Basis of preparation of Financial Statements:

The Financial statements have been prepared to comply with the Generally Accepted Accounting Principles in India (India GAAP), including the Accounting Standards notified under the relevant provisions of the Companies Act, 2013.

2. Use of Estimates:

The preparation of financial statements require the management of the company to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to the contingent liabilities as at the date of the financial statements and reported amounts of income and expenses during the year.

1. Cash flow statement

Cash flows are reported using the indirect method, whereby profit/ (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

2, Fixed Assets, Depreciation and amortization:

Tangible Fixed Assets (other than those which have been revalued) are carried at cost less accumulated depreciation / amortization and impairment losses, if any. The cost of fixed assets comprises its purchase price net of any trade discounts and rebates, any import duties and other taxes (other than those subsequently recoverable from the tax authorities), any directly attributable expenditure on making the asset ready for its intended use, other incidental expenses and interest on borrowings attributable to acquisition of qualifying fixed assets up to the date the asset is ready for its intended use.

a. Depreciable amount for assets is the cost of an asset, or other amount substituted for cost, less its estimated residual value

b. Depreciation on tangible fixed assets has been provided on the Written Down Value as per the useful life prescribed in Schedule II to the Companies Act, 2013.

c. Intangible assets are amortized over their estimated useful life on straight line method as follows:

Software - over the license period

5 Investments:

Investments are classified as Current and Long Term Investments.

Long Term Investments are stated at cost less provision if any for diminution, which is other than temporary in nature. Current Investments are valued at lower of cost and net realizable value.

6. Valuation of Inventory:

The Valuation of inventory is made on the following basis.

i. Raw material: At Cost on Weighted Average Basis or Net Realisable Value whichever is less.

ii. Stores and Spares : At Cost on Weighted Average Basis or Net Realisable Value whichever is less.

iii. Finished Goods: At Cost or Net Realisable Value whichever is less.

iv. Work-in-progress : Valued at cost or Net Realisable Value whichever is less.

Cost includes material cost and appropriate share of production overheads and duties where ever applicable.

7. Foreign Currency Transactions:

Foreign Currency Transactions are accounted for at the rate prevailing on the date of transaction. Monetary items denominated in foreign currencies are restated at year end rate. Gain or Loss arising out of fluctuations in exchange rates is accounted in the Statement of Profit & Loss. Premium or discount on Forward Exchange Contracts is amortized as the expense or income over the tenure of the contract.

8. Employee Benefits:

Short Term Employee Benefits:

Short Term Employee Benefits for services rendered by employees are recognized during the period, when the services are rendered.

Post Employment Benefits:

The company does not have any industrial activity, hence Provident Fund & ESI are not applicable to the company.

Defined Benefit Plans:

Liability in respect of defined benefit plans i.e. gratuity is determined, based on actuarial valuation made by an independent actuary using the projected unit credit method as at the balance sheet date. The actuarial gains or losses are recognized immediately in the profit and loss account.

9. Revenue Recognition:

(i) Sales are recognized, net of returns and trade discounts, on transfer of significant risks and rewards of ownership to the buyer, which generally coincides with the delivery of goods to customers. Sales include excise duty but exclude sales tax.

(ii) Income from services rendered is recognized as and when services are rendered based on agreements/arrangements with the concerned parties.

(iii) Export Incentive under Duty Entitlement Pass Book Scheme are treated as income in the year of export at the estimated realizable value.

(iv) Interest income is accounted on accrual basis.

(v) Dividend income is accounted when the right to receive the dividend is established

10. Impairment of Fixed Assets:

Consideration is given at each balance sheet date to determine whether there is any indication of impairment of the carrying amount of the Company's fixed assets. If any indication exists of an asset, recoverable amount is estimated and impairment loss is recognized, whenever the carrying amount of an asset exceeds its recoverable amount. Reversal of impairment of losses recognized in previous years is recorded whenever there is an indication that impairment losses recognized for the asset no longer exists or has decreased.

11. Leases:

All the Operating Leased assets are presented in the Balance Sheet under the Fixed Assets. Lease Income from operating lease is recognized in the Statement of Profit and Loss on a straight line basis over the lease term. Costs including the depreciation and initial costs are recognized as expense.

12. Provisions and Contingencies:

A provision is recognized when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. Contingent liabilities are disclosed in the Notes. Contingent assets are not recognized in the financial statements.

13. Operating Cycle:

Based on the nature of products/activities of the Company and the normal time between acquisition of assets and their realization in cash or cash equivalents, the Company has determined its operating cycle as 12 months for the purpose of classification of its assets and liabilities as current and non-current.

14. Taxes on Income:

Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the applicable tax rates and the provisions of the Income Tax Act, 1961 and other applicable tax laws. Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax. Accordingly, MAT is recognized as an asset in the Balance Sheet when it is probable that future economic benefit associated with it will flow to the Company.

Deferred tax is recognized on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantively enacted as at the reporting dale. Deferred tax liabilities are recognized for all timing differences. Deferred tax assets are recognized for timing differences of items other than unabsorbed depreciation and carry forward losses only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realized. However, if there are unabsorbed depreciation and carry forward of losses and items relating to capital losses, deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that there will be sufficient future taxable income available to realize the assets. Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable right for such set off. Deferred tax assets are reviewed at each balance sheet date for their reliability.

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Mar 31, 2014

1. Basis of preparation of Financial Statements:

The Financial statements have been prepared under the Historical cost convention in accordance with the Generally Accepted Accounting Principles in India and the provisions of the Companies Act, 1956 and in accordance with the applicable mandatory Accounting Standards. The company follows accrual basis of accounting.

2. Use of Estimates:

The preparation of financial statements require the management of the company to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to the contingent liabilities as at the date of the financial statements and reported amounts of income and expenses during the year.

3. Fixed Assets and Depreciation:

a. Fixed Assets are stated at Historical cost less accumulated Depreciation.

b. Depreciation on Fixed Assets is provided on Written Down Value Method on pro-rata basis at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956.

4 Investments:

Investments are classified as Current and Long Term Investments.

Long Term Investments are stated at cost less provision if any for diminution, which is other than temporary in nature. Current Investments are valued at lower of cost and net realizable value.

5. Valuation of Inventory:

The Valuation of inventory is made on the following basis.

i. Raw material : At Cost on Weighted Average Basis or Net Realisable Value whichever is less.

ii. Stores and Spares : At Cost on Weighted Average Basis or Net Realisable Value whichever is less.

iii. Finished Goods : At Cost or Net Realisable Value whichever is less.

iv. Work-in-progress : Valued at cost or Net Realisable Value whichever is less.

Cost includes material cost and appropriate share of production overheads and duties where ever applicable.

6. Foreign Currency Transactions:

Foreign Currency Transactions are accounted for at the rate prevailing on the date of transaction. Monetary items denominated in foreign currencies are restated at year end rate. Gain or Loss arising out of fluctuations in exchange rates is accounted in the Statement of Profit & Loss. Premium or discount on Forward Exchange Contracts is amortized as the expense or income over the tenure of the contract.

7. Employee Benefits:

Short Term Employee Benefits:

Short Term Employee Benefits for services rendered by employees are recognized during the period, when the services are rendered.

Post-Employment Benefits:

The company is only carrying on culture in a limited way and does not have any industrial activity; hence Provident Fund & ESI are not applicable to the company.

Defined Benefit Plans:

Liability in respect of defined benefit plans i.e. gratuity is determined, based on actuarial valuation made by an independent actuary using the projected unit credit method as at the balance sheet date. The actuarial gains or losses are recognized immediately in the statement of profit and loss.

8. Taxation:

Provision for current Income Tax made in accordance with Income tax Act 1961. Deferred Tax resulting in timing differences between book and taxable Profit is computed and provided by using the tax rates and Laws that have been enacted or substantially enacted as on the balance sheet date. The Deferred Tax Asset is recognized and carried forward only to the extent that there is a virtual certainty that the Deferred Tax Asset will be realized in future.

9. Revenue Recognition:

Sales are recognized when goods are supplied and are recorded net of rebates and sales tax. Expenses are accounted on accrual basis and provisions are made for all known losses and expenses.

10. Impairment of Fixed Assets:

Consideration is given at each balance sheet date to determine whether there is any indication of impairment of the carrying amount of the Company''s fixed assets. If any indication exists of an asset, recoverable amount is estimated and impairment loss is recognized, whenever the carrying amount of an asset exceeds it''s recoverable amount. Reversal of impairment of losses recognized in previous years is recorded whenever there is an indication that impairment of losses recognized for the asset no longer exists or has decreased.

11. Amortization of Expenses:

The expenditure incurred towards Scheme of Arrangement on Share Capital Reduction and Re-organization is amortized over a period of 5 years as the scheme has the benefit of enduring nature.

12. Leases:

All the Operating Leased assets are presented in the Balance Sheet under the Fixed Assets. Lease Income from operating lease is recognized in the Statement of Profit and Loss on a straight line basis over the lease term. Costs including the depreciation and initial costs are recognized as expense.

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Mar 31, 2013

1. Basis of preparation of Financial Statements:

The Financial statements have been prepared under the Historical cost convention in accordance with the Generally Accepted Accounting Principles in India and the provisions of the Companies Act, 1956 and in accordance with the applicable mandatory Accounting Standards. The company follows accrual basis of accounting.

2. Use of Estimates:

The preparation of financial statements require the management of the company to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to the contingent liabilities as at the date of the financial statements and reported amounts of income and expenses during the year.

3. Fixed Assets and Depreciation:

a. Fixed Assets are stated at Historical cost less accumulated Depreciation.

b. Depreciation on Fixed Assets is provided on Written Down Value Method on prorata basis at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956.

4 Investments:

Investments are classified as Current and Long Term Investments.

Long Term Investments are stated at cost less provision if any for diminution, which is other than temporary in nature. Current Investments are valued at lower of cost and net realizable value.

5. Valuation of Inventory:

The Valuation of inventory is made on the following basis.

i. Raw material : At Cost on Weighted Average Basis or Net Realisable Value whichever is less.

ii. Stores and Spares : At Cost on Weighted Average Basis or Net Realisable Value whichever is less.

iii. Finished Goods : At Cost or Net Realisable Value whichever is less.

iv. Work-in-progress: Valued at cost or Net Realisable Value whichever is less.

Cost includes material cost and appropriate share of production overheads and duties wherever applicable.

6. Foreign Currency Transactions:

Foreign Currency Transactions are accounted for at the rate prevailing on the date of transaction. Monetary items denominated in foreign currencies are restated at year end rate. Gain or Loss arising out of fluctuations in exchange rates is accounted in the Statement of Profit & Loss. Premium or discount on Forward Exchange Contracts is amortized as the expense or income over the tenure of the contract.

7. Employee Benefits:

Short Term Employee Benefits:

Short Term Employee Benefits for services rendered by employees are recognized during the period when the services are rendered.

Post Employment Benefits:

The company is only carrying on culture in a limited way and does not have any industrial activity, hence Provident Fund & ESI are not applicable to the company.

Defined Benefit Plans:

Liability in respect of defined benefit plans i.e gratuity is determined, based on actuarial valuation made by an independent actuary using the projected unit credit method as at the balance sheet date. The actuarial gains or losses are recognized immediately in the profit and loss account.

8. Taxation:

Provision for current Income Tax is made in accordance with Income tax Act 1961. Deferred Tax resulting in timing differences between book and taxable Profit is computed and provided by using the tax rates and Laws that have been enacted or substantially enacted as on the balance sheet date. The Deferred Tax Asset is recognized and carried forward only to the extent that there is a virtual certainty that the Deferred Tax Asset will be realized in future.

9. Revenue Recognition:

Sales are recognized when goods are supplied and are recorded net of rebates and sales tax. Expenses are accounted on accrual basis and provisions are made for all known losses and expenses.

10. Impairment of Fixed Assets:

Consideration is given at each balance sheet date to determine whether there is any indication of impairment of the carrying amount of the Company''s fixed assets. If any indication exists of an asset, recoverable amount is estimated and impairment loss is recognized, whenever the carrying amount of an asset exceeds it''s recoverable amount. Reversal of impairment of losses recognized in previous years is recorded whenever there is an indication that impairment losses recognized for the asset no longer exist or have decreased.

11. Amortization of Expenses:

The expenditure incurred towards Scheme of Arrangement on Share Capital Reduction and Re- organization is amortized over a period of 5 years as the scheme has the benefit of enduring nature.

12. Leases:

All the Operating Leased assets are presented in the Balance Sheet under the Fixed Assets. Lease Income from operating lease is recognized in the Statement of Profit and Loss on a writen down value basis over the lease term. Costs including the depreciation and initial costs are recognised as expense.

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Mar 31, 2012

1. Basis of preparation of Financial Statements:

The Financial statements have been prepared under the Historical cost convention in accordance with the generally accepted accounting principles in India and the provisions of the Companies Act, 1956 and in accordance with the applicable mandatory Accounting Standards. The company follows accrual basis of accounting.

2. Use of Estimates:

The preparation of financial statements require the management of the company to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to the contingent liabilities as at the date of the financial statements and reported amounts of income and expenses during the year.

3. Fixed Assets and Depreciation:

a. Fixed Assets are stated at Historical cost less accumulated Depreciation.

b. Depreciation on Fixed Assets is provided on Written Down Value Method on prorata basis at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956.

4. Investments:

Investments are classified as Current and Long Term Investments.

Long Term Investments are stated at cost less provision if any for diminution, which is other than temporary in nature. Current investments are valued at lower of cost and net realizable value.

5. Valuation of Inventory:

The Valuation of inventory is made on the following basis.

i. Raw material : At Cost on Weighted Average Basis or Net Realisable Value whichever is less.

ii. Stores and Spares : At Cost on Weighted Average Basis or Net Realisable Value whichever is less.

iii. Finished Goods : At Cost or Net Realisable Value whichever is less.

iv. Work-in-progress : Valued at cost or Net Realisable Value whichever is less.

Cost includes material cost and appropriate share of production overheads and duties where ever applicable.

6, Foreign Currency Transactions:

Foreign Currency Transactions are accounted for at the rate prevailing on the date of transaction. Monetary items denominated in foreign currencies are restated at year end rate. Gain or Loss arising out of fluctuations in exchange rates are accounted in the Statement of Profit & Loss. Premium or discount on Forward Exchange Contracts is amortised as the expense or income over the tenure of the contract.

7. Employee Benefits:

Short Term Employee Benefits:

Short Term Employee Benefits for services rendered by employees are recognized during the period, when the services are rendered.

Post Employment Benefits:

The company Is only carrying on culture in a limited way and does not have any industrial activity, hence Provident Fund & ESI are not applicable to the company. Gratuity is provided as per the Payment of Gratuity Act, 1972.

8. Taxation:

Provision for current Income Tax made in accordance with Income tax Act 1961. Deferred Tax resulting from timing differences between book and taxable Profit is computed and provided by using the tax rates and Laws that have been enacted or substantially enacted as on the balance sheet date. The Deferred Tax Asset is recognized and carried forward only to the extent that there is a virtual certainty that the Deferred Tax Asset will be realized in future.

9. Revenue Recognition:

Sales are recognised when goods are supplied and are recorded, net of rebates and sales tax. Expenses are accounted on accrual basis and provisions are made for all known losses and expenses.

10. Impairment of Fixed Assets:

Consideration is given at each balance sheet date to determine whether there is any indication of impairment of the carrying amount of the Company's fixed assets. If any indication exists of an asset, recoverable amount is estimated and impairment loss is recognized whenever the carrying amount of an asset exceeds it's recoverable amount. Reversal of impairment of losses recognized in previous years is recorded whenever there is an indication that impairment losses recognized for the asset no longer exists or have decreased.

11. Amortization of Expenses:

During the year the management decided to write off the amortized scheme expenditure with in Five years instead of Ten years. The expenditure incurred towards scheme of arrangement on Share Capital reduction and reorganization is amortized has the scheme has the benefit of enduring nature.

12. Leases:

All the Operating Leased assets are presented in the Balance Sheet under the Fixed Assets. Lease Income from operating lease is recognised in the Statement of Profit and Loss on a straight line basis over the lease term. Costs including the depreciation and initial costs are recognised as expense.

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Mar 31, 2011

1. Basis of preparation of Financial Statements:

The Financial statements have been prepared under the Historical cost convention in accordance with the generally accepted accounting principles in India and the provisions of the Companies Act, 1956 and in accordance with the applicable mandatory Accounting Standards. The company follows accrual basis of accounting.

2. Use of Estimates:

The preparation of financial statements require the management of the company to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to the contingent liabilities as at the date of the financial statements and reported amounts of income and expenses during the year.

3. Fixed Assets and Depreciation:

a. Fixed Assets are stated at Historical cost less accumulated Depreciation.

b. Depreciation on Fixed Assets is provided on Written Down Value Method on prorata basis at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956.

4 Investments:

Investments are classified as Current and Long Term Investments.

Long Term Investments are stated at cost less provision if any for diminution, which is other than temporary in nature. Current investments are valued at lower of cost and net realizable value.

5. Valuation of Inventory:

The Valuation of inventory is made on the following basis.

i. Raw material : At Cost on Weighted Average Basis or Net Realisable Value whichever is less.

ii. Stores and Spares : At Cost on Weighted Average Basis or Net Realisable Value whichever is less.

iii.Finished Goods : At Cost or Net Realisable Value whichever is less.

iv. Work-in-progress : Valued at cost or Net Realisable Value whichever is less.

Cost includes material cost and appropriate share of production overheads and duties where ever applicable.

6. Foreign Currency Transactions:

Foreign Currency Transactions are accounted for at the rate prevailing on the date of transaction. Monetary items denominated in foreign currencies are restated at year end rate. Gain or Loss arising out of fluctuations in exchange rates are accounted in the Profit & Loss Account. Premium or discount on Forward Exchange Contracts is amortised as the expense or income over the tenure of the contract.

7. Employee Benefits:

Short Term Employee Benefits:

Short Term Employee Benefits for services rendered by employees are recognized during the period, when the services are rendered.

Post Employment Benefits:

The company is only carrying on culture in a limited way and does not have any industrial activity, hence Provident Fund & ESI are not applicable to the company. Gratuity is provided as per the Payment of Gratuity Act,1972.

8. Taxation:

Provision for current Income Tax made in accordance with Income tax Act 1961. Deferred Tax resulting from timing differences between book and taxable Profit is computed and provided by using the tax rates and Laws that have been enacted or substantially enacted as on the balance sheet date. The Deferred Tax Asset is recognized and carried forward only to the extent that there is a virtual certainty that the Deferred Tax Asset will be realized in future.

9. Revenue Recognition:

Sales are recognised when goods are supplied and are recorded, net of rebates and sales tax. Expenses are accounted on accrual basis and provisions are made for all known losses and expenses.

10. Impairment of Fixed Assets:

Consideration is given at each balance sheet date to determine whether there is any indication of impairment of the carrying amount of the Company's fixed assets. If any indication exists of an asset, recoverable amount is estimated and impairment loss is recognized whenever the carrying amount of an asset exceeds it's recoverable amount. Reversal of impairment of losses recognized in previous years is recorded whenever there is an indication that impairment losses recognized for the asset no longer exists or have decreased.

11. Amotisation of Expenses:

The expenditure incurred towards Scheme of Arrangement on share capital reduction and re- organization is amortized as the scheme has benefit of enduring nature. The total expenditure incurred for the scheme will be written off over a period of 10 years.

12. Leases :

All the Operating Leased assets are presented in the Balance Sheet under the Fixed Assets. Lease Income from operating lease is recognised in the Profit and Loss account on a straight line basis over the lease term. Costs including the depreciation and initial costs are recognised as expense.