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Accounting Policies of CJ Gelatine Products Ltd. Company

Mar 31, 2015

1. Accounting Convention and Concepts :

a. The Financial Statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP).The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under section 133 of the Companies Act,2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014. The financial statements have been prepared on an accrual basis and under the historical cost convention. The accounting policies adopted in the preparation of financial statements are consistent with those of previous year, except for the change in accounting policy for depreciation on Fixed Assets. Refer note 3C.

b. The Company generally follows Mercantile system of accounting and recognizes significant items of income and expenditure on accrual basis.

2. Use Of Estimates:

The preparation of financial statements are in conformity with generally accepted accounting principles require estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statement and the reported amount of revenues and expenses during the year. Difference between the actual results and estimates are recognized in the period in which the results are known / materialized. Although these estimates are based upon management''s best knowledge of current events and actions, actual results could differ from these estimates.

3. Tangible Fixed Assets and capital work in progress:

Fixed assets are stated at cost, less accumulated depreciation and impairment losses if any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use. Capital work in progress comprises cost of tangible fixed assets not ready for intended use at the balance sheet date.

Subsequent expenditure related to an item of fixed asset is added to its book value only if it increases the future benefits from the existing asset beyond its previously assessed standard of performance. All other expenses on existing fixed assets, including day to day repair and maintenance expenditure and cost of replacing parts, are charged to the statement of profit and loss for the period during which such expenses are incurred.

Gains or losses arising from de-recognition of fixed assets are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is derecognized.

4. Depreciation on tangible fixed assets:

Depreciation on fixed assets is provided using straight line method based on rates specified in Schedule II of the Companies Act, 2013.

Till the year ended March 31, 2014, Schedule XIV of the Companies Act, 1956, prescribed requirements concerning depreciation on fixed assets. From the Current year, Schedule XIV has been replaced by Schedule II of the Companies Act, 2013. The applicability of Schedule II has resulted in the following changes related to depreciation of fixed assets. Unless stated otherwise, the impact mentioned for the current year is likely to hold good for future years also.

a. Useful Lives / Depreciation Rates:

Till the year ended March 31, 2014, depreciation rates prescribed under Schedule XIV were treated as minimum rates and the company was not allowed to charge depreciation at lower rates even if such lower rates were justified by the estimated useful life of the asset. Schedule II to the Companies Act 2013, prescribes useful lives for fixed assets which, in many cases, are different from lives prescribed under the erstwhile Schedule XIV. However, Schedule II allows companies to use higher / lower useful lives and residual values if such useful lives and residual values can be technically supported and justification for difference is disclosed in the financial statements.

The management believes that the useful lives / depreciation rates specified under Schedule II of the Companies Act,2013 would fairly reflect the estimate of the useful lives of the existing fixed assets and hence would comply with the provisions of Schedule II commencing from April 1, 2014. Had the Company continued to use the earlier accounting policy i.e as per Schedule XIV of the Companies Act,1956, the impact on depreciation of fixed assets would have been lesser by Rs.13.52 lakhs.

b. Depreciation on assets costing less than Rs.5000/-:

Till the year ended March 31,2014, to comply with the requirements of Schedule XIV to the Companies Act,1956, the company was charging 100% depreciation on assets costing less than Rs.5000/- in the year of purchase. However, Schedule II to the companies Act, 2013, applicable from the current year, does not recognize such practice. Hence, to comply with the requirement of Schedule II to the Companies Act, 2013, the company has changed the accounting policy for depreciation of assets costing less than Rs.5000/- . The management has decided to apply the revised accounting policy prospectively from the accounting period commencing from April 1, 2014. The change in the accounting for depreciation of assets costing less than Rs.5000/- did not have any material impact on the financial statements of the company for the current year.

5. Inventories:

Finished products are valued at lower of cost or net realizable value, stock in process, raw material, stores and spares at cost and these are in conformity with Accounting Standards.

6. Sales / Revenue:

Sale of goods is recognized at the point of dispatch to customers. The Excise Duty collected on sales is added in Sales.

7. Excise Duty:

Excise Duty on manufactured goods is accounted for at the time of their clearance from the factory. The above policy however, has no impact on the operating results of the Company.

8. Retirement Benefits :

Company''s contribution to Provident Fund are charged to Profit & Loss Account. Gratuity and Leave encashment benefits at the time of retirement are charged to Profit & Loss Account on the basis of actual payment.

9. Contingent Liabilities:

Contingent liabilities are determined on the basis of available information and are disclosed by way of other notes given herein below.


Mar 31, 2014

1. Accounting Convention and Concepts:

a. The Financial Statements have been prepared under the historical cost convention in accordance with generally accepted accounting principles and provisions of the Companies Act, 1956, as adopted consistently by the Company.

b- The Company generally follows mercantile system of accounting and recognizes significant items of income and expenditure on accrual basis.

2. Use of Estimates:

The presentation of financial statements are in conformity with generally accepted accounting principles require estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statement and the reported amount of revenues and expenses during the year. Difference between the actual results and estimates are recognized in the period in which the results are known / materialized.

3. Fixed Assets/Depreciation:

a. Fixed assets are stated at cost of acquisition or construction. In case of revaluation affixed assets, the Original cost as determined by the Valuer is considered in the accounts and the differential amount is transferred to Revaluation Reserve.

b. Depreciation is provided on Buildings and Plant & machinery on straight line method and the rest of the fixed assets on written down value method at the rates specified in Schedule XIV to the Companies Act, 1956.

c. Leasehold Land will be written off in the year in which the respective lease periods expire.

d. Pursuant to Section 205(2) depreciation on Plant Si Machinery is calculated on revalued figure and not on original cost of Plant Si Machinery, Subsequently, depreciation on revalued figure is reduced and balance is carried to Profit & Loss Account,

4. Inventories:

Finished products are valued at lower of cost or net realizable value, stock in process, raw material, stores and spares at cost and these are in conformity with Accounting Standards.

5. Sales / Revenue:

Sale of goods is recognized at the point of dispatch to customers. The Excise Duty collected on sales is added in Sales.

6. Excise Duty:

Excise Duty on manufactured goods is accounted for at the time of their clearance from the factory. The above policy however, has no impact on the operating results of the Company.

7. Retirement Benefits:

Company's contribution to Provident Fund is charged to Profit & Loss Account. Gratuity and Leave encashment benefits at the lime of retirement are charged to Profit & Loss Account on the basis of actual payment.

8. Contingent Liabilities:

Contingent liabilities are determined on the basis of available information and are disclosed by way of other notes given herein betow,




Mar 31, 2013

1. Accounting Convention and Concepts -

a.The financial statements have been prepared under the historical cost convention in accordance With generally accepted accounting principles and provisions of the Companies Act, 1956, as adopted consistently by the Company

b. The Company generally follows mercantile system of accounting and recognizes significant items of income and expenditure on accrual basis.

2. Use of Estimates -

The presentation of financial statements in conformity with generally accepted accounting principles require estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statement and the reported amount of revenues and expenses during the year. Difference between the actual results and estimates are recognized in the period in which the results are known / materialized.

3. Fixed Assets/ Depreciation -

a. Fixed assets are stated at cost of acquisition or construction. In case of revaluation of fixed assets, the original cost as determined by the valuer is considered in the accounts and the differential amount is transferred to Revaluation Reserve.

b. Depreciation is provided on Building and Plant & Machinery on straight line method and the rest of the fixed assets on written down value method at the rates specified in Schedule XIV to the Companies Act, 1956.

c. Leasehold Land will be written off in the year in which the respective lease periods expire.

d. Pursuant to Section 205(2) depreciation on Plant & Machinery is calculated on revalued figure and not on original cost of Plant & Machinery. Subsequently the depreciation on revalued figure is reduced and balance is carried to Profit and Loss Account.

4. Inventories -

Finished products are valued at lower of cost or net realizable value, stock in process, raw material, stores and spares at cost and these are in conformity to Accounting Standards.

5. Sales/ Revenue -

Sale of goods is recognized at the point of dispatch to customers. The excise duty and sales tax collected on sales are added in sales.

6. Excise duty -

Excise duty on manufactured goods is accounted for at the time of their clearance from the factory. The above policy however has no impact on the operating results of the company.

7. Retirement benefits -

Company''s contributions to Provident Fund are charged to Profit and Loss Account. Gratuity and leave encashment benefits at the time of retirement are charged to Profit and Loss Account on the basis of actual payment.

8. Contingent liabilities -

Contingent liabilities are determined on the basis of available information and are disclosed by way of other notes given herein below.


Mar 31, 2012

1. Accounting Convention and Concepts -

a. The financial statements have been prepared under the historical cost convention in accordance with generally accepted accounting principles and provision of the Companies Act, 1956, as adopted consistently by the Company.

b. The Company generally follows mercantile system of accounting and recognizes significant items of income and expenditure on accrual basis.

2. Use of Estimates-

The presentation of financial statements in conformity with the generally accepted accounting principles require estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statement and the reported amount of revenues and expenses during the year. Difference between the actual results and estimates are recognized in the period in which the results are known/ materialized.

3. Fixed Assets/ Depreciation -

a. Fixed Assets are stated at cost of acquisition or construction. In case of revaluation of fixed assets, the original cost as determined by the value is considered in the accounts and the differential amount is transferred to Revaluation Reserve.

b. Depreciation is provided on Building and Plant & Machinery on straight line method and rest of the fixed assets on written down value method at the rates specified in Schedule XIV to the Companies Act, 1956.

c. Leasehold Land will be written off in the year in which the respective lease periods expire.

d. Pursuant to Section 205 (2) depreciation on Plant & Machinery is calculated on revalued figure and not on original cost of Plant & Machinery. Subsequently the depreciation on revalued figure is reduced and balance is carried to Profit and Loss Account.

4. Inventories -

Finished products are valued at lower of cost or net realizable value, stocks in process, raw material, stores and spares at cost and these are in conformity to Accounting Standards.

5. Sales/Revenue-

Sale of goods is recognized at the point of dispatch to customers. The excise duty and sales tax collected on sales are added in sales.

6. Excise duty -

Excise duty on manufactured goods is accounted for at the time of their clearance from the factory. The above policy however has no impact on the operating results of the Company.

7. Retirement benefit -

Company's contributions to Provident Fund are charged to Profit and Loss Account. Gratuity and leave encashment benefits at the time of retirement are charged to Profit and Loss Account on the basis of actual payment.

8. Contingent liabilities-

Contingent liabilities are determined on the basis of available information and are disclosed by way of other notes given herein below.


Mar 31, 2011

1. Accounting Convention and Concepts -

a. The financial statements have been prepared under the historical cost convention in accordance with generally accepted accounting principles and provision of the Companies Act, 1956, as adopted consistently by the Company.

b. The Company generally follows mercantile system of accounting and recognises significant items of income and expenditure on accrual basis.

2. Use of Estimates -

The presentation of financial statements in conformity with the generally accepted accounting principles require estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statement and the reported amount of revenues and expenses during the year. Difference between the actual results and estimates are recognised in the period in which the results are known/ materialised.

3. Fixed Assets/ Depreciation -

a. Fixed Assets are stated at cost of acquisition or construction. In case of revaluation of fixed assets, the original cost as determined by the valuer is considered in the accounts and the differential amount is transferred to Revaluation Reserve.

b. Depreciation is provided on Building and Plant & Machinery on straight line method and rest of the fixed assets on written down value method at the rates specified in Schedule XIV to the Companies Act, 1956.

c. Leasehold Land will be written off in the year in which the respective lease periods expire.

d. Pursuant to Section 205 (2) depreciation on Plant & Machinery is calculated on revalued figure and not on original cost of Plant & Machinery. Subsequently the depreciation on revalued figure is reduced and balance is carried to Profit and Loss Account.

e. During the Financial Year 2010-11 we were informed that the company had to surrender part of Leasehold Land purchased earlier from MPAKVN by virtue of litigation matter which was pending before the appropriate authority.

4. Inventories -

Finished products are valued at lower of cost or net realisable value, stocks in process, raw material, stores and spares at cost and these are in conformity to Accounting Standards.

5. Sales/ Revenue -

Sale of goods is recognised at the point of dispatch to customers. The excise duty and sales tax collected on sales are added in sales.

6 Excise duty -

Excise duty on manufactured goods is accounted for at the time-of their clearance from the factory. The above policy however has no impact on the operating results of the Company.

7. Retirement benefit -

Company's contributions to Provident Fund are charged to Profit and Loss Account. Gratuity and leave encashment benefits at the time of retirement are charged to Profit and Loss Account on the basis of actual payment.

8. Contingent liabilities -

Contingent liabilities are determined on the basis of available information and are disclosed by way of other notes given herein below.


Mar 31, 2010

1. Accounting Convention and Concepts -

a. The financial statements have been prepared under the historical cost convention in accordance with generally accepted accounting principles and provision of the Companies Act, 1956, as adopted consistently by the Company.

b. The Company generally follows mercantile system of accounting and recognises significant items of income and expenditure on accrual basis.

2. Use of Estimates -

The presentation of financial statements in conformity with the generally accepted accounting principles require estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statement and the reported amount of revenues and expenses during the year. Difference between the actual results and estimates are recognised in the period in which the results are known/ materialised.

3. Fixed Assets/ Depreciation -

a. Fixed Assets are stated at cost of acquisition or construction. In case of revaluation of fixed assets, the original cost as determined by the valuer is considered in the accounts and the differential amount is transferred to Revaluation Reserve.

b. Depreciation is provided on Building and Plant & Machinery on straight line method and rest of the fixed assets on written down value method at the rates specified in Schedule XIV to the Companies Act, 1956.

c. Leasehold Land will be written off in the year in which the respective lease periods expire.

d. Pursuant to Section 205 (2) depreciation on Plant & Machinery is calculated on revalued figure and not on original cost of Plant & Machinery. Subsequently the depreciation on revalued figure is reduced and balance is carried to Profit and Loss Account.

4. Inventories -

Finished products are valued at lower of cost or net realisable value, stocks in process, raw material, stores and spares at cost and these are in conformity to Accounting Standards.

5. Sales/ Revenue -

Sale of goods is recognised at the point of dispatch to customers. The excise duty and sales tax collected on sales are added in sales.

6 Excise duty -

Excise duty on manufactured goods is accounted for at the time of their clearance from the factory. The above policy however has no impact on the operating results of the Company.

7. Retirement benefit -

Companys contributions to Provident Fund are charged to Profit and Loss Account. Gratuity and leave encashment benefits at the time of retirement are charged to Profit and Loss Account on the basis of actual payment.

8. Contingent liabilities -

Contingent liabilities are determined on the basis of available information and are disclosed by way of other notes given herein below.

 
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