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Accounting Policies of Elder Projects Ltd. Company

Mar 31, 2012

1 Basis of preparation of financial statements:

a. The financial statements have been prepared under the historical cost convention in accordance with the generally accepted accounting principles and the provisions 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 Fixed Assets and Depreciation:

Fixed Assets are stated at the net of Cenvat eligible for credit less accumulated depreciation. The cost of assets not put to use before the year end are disclosed under capital work in progress.

Depreciation has been calculated on Fixed Assets of the Company on straight line method as per rates specified in Schedule XIV to the Companies Act, 1956 as amended from fime to time.

3 Investments:

Investments are shown at cost and are long term in nature. 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.

4 Inventories:

Raw materials, packing materials and stores and spares are valued at cost net of modvat computed on First- in-First out basis.

Work in process is valued at cost of manufacturing which includes material costfnet of Cenvat), labour cost and production overheads incurred up to the stage of completion.

Finished goods are valued at lower of cost and net realisable value.

5 Excise Duty

The excise duty in respect of closing inventory of finished goods is included as part of inventory. The amount of Cenvat credits in respect of materials consumed for sales is deducted from cost of materials consumed.

6 Sundry Debtors and Advances:

Specific debts and advances identified as irrecoverable or doubtful are written off or provided for respectively.

7 Research and Development:

a. Research and Development expenses are charged against revenue in the year in which they are incurred.

b. Capital Expenditure or Research and Development Assets is included in Fixed Assets and depreciation provided for at the applicable rates.

8 Foreign Currency Transactions:

Foreign currency transactions remaining unsettled at the year end are converted into Rupee at contract rates, when covered by foreign exchange contract and at year end rates in other cases. Realised gains and losses on foreign exchange transactions other than those relating to Fixed Assets are recognised in the Profit & Loss Account.

9 Revenue Recognition:

The Company recognises sale of goods as they are despatched to customers. Sales are net of sales tax, returns and trade discounts. Dividend income is recognised when right to receive dividend is established. Income from food and beverages are recognised at the point of serving these items to the guest. Income stated is exclusive of amount recovered towards sales tax, luxury tax & service tax.

10 Borrowing Costs:

Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalized as part of the cost of that asset. Other borrowing costs are recognized as an expense in the period in which they are incurred.

11 Taxes on Income:

Tax expense (tax saving) is the aggregate of current year tax and deferred tax charged (or credited) to the Profit & Loss Account of the year.

a. Current tax is the provision made for income tax liability on the profits for the year ended 3151 March, 2011 in accordance with the provisions of Income Tax Act, 1961.

b. Deferred tax is recognised, on timing differences, being the differences resulting from the recognition of items in the financial statements and in estimating its current income tax provision.

c. Deferred tax assets are recognised on unabsorbed depreciation, unabsorbed business loss and MAT credit under section 115 JA of the Income Tax Act, 1961 only to the extent that there is virtual certainty supported by convincing evidence and on others, to the extent that there is reasonable certainty of their realisation.

d. Deferred tax assets and liabilities are measured using tax rates and the tax laws that have been enacted or substantially enacted at the balance sheet date.

12 Contingent Liabilities:

These are disclosed by way of notes to the accounts. Provision is made in respect of those liabilities which are likely to materialise after the year end till the finalisation of accounts and have material effect on the position stated in the Balance Sheet.

13 Impairment of Assets

The company assesses at each balance sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the management estimates the recoverable amount of the asset.lf such recoverable amount of the asset is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the profit and loss account. If at the balance sheet date there is an indication that if a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of depreciated historical cost.

14 Cash Flow Statement.

Cash Flow Statement has been prepared under indirect method.

15 Intangible Assets.

a. Intangible assets are stated at cost less depreciation

b. Computer Software being intangible assets has been shown as Fixed Assets & depreciation has been provided on them at applicable rates.

16 Retirement Benefits:

(i) Gratuity to employees is covered under Group Gratuity Life Assurance Schem of the Life Insurance Corporation of India and the premium paid to LIC of India during the year id charged to revenue.

(iii) The Company funds the provident fund liability by contributing to the recognised funds and charges the same to the profit and loss account.


Mar 31, 2010

1 Basis of preparation of financial statements:

a. The financial statements have been prepared under the historical cost convention in accordance with the generally accepted accounting principles and the provisions 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 Fixed Assets and Depreciation:

Fixed Assets are stated at the net of Cenvat eligible for credit less accumulated depreciation. The cost of assets not put to use before the year end are disclosed under capital work in progress.

Depreciation has been calculated on Fixed Assets of the Company on straight line method as per rates specified in Schedule XIV to the Companies Act, 1956 as amended from time to time.

3 Investments:

Investments are shown at cost and are long term in nature. 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.

4 Inventories:

Raw materials, packing materials and stores and spares are valued at cost net of modvat computed on First-in- First out basis.

Work in process is valued at cost of manufacturing which includes material cost(net of Cenvat), labour cost and production overheads incurred up to the stage of completion.

Finished goods are valued at lower of cost and net realisable value.

5 Retirement Benefits:

(i) Gratuity to employees is covered under Group Gratuity Life Assurance Scheme of the Life Insurance Corporation of India and the premium paid to LIC of India during the year is charged to revenue. The working of actuarial valuation is given as under.

6 Excise Duty

The excise duty in respect of closing inventory of finished goods is included as part of inventory. The amount of Cenvat credits in respect of materials consumed for sales is deducted from cost of materials consumed.

7 Sundry Debtors and Advances:

Specifc debts and advances identified as irrecoverable or doubtful are written off or provided for respectively.

8 Research and Development:

a. Research and Development expenses are charged against revenue in the year in which they are incurred.

b. Capital Expenditure or Research and Development Assets is included in Fixed Assets and depreciation provided for at the applicable rates.

9 Foreign Currency Transactions:

Foreign currency transactions remaining unsettled at the year end are converted into Rupee at contract rates, when covered by foreign exchange contract and at year end rates in other cases. Realised gains and losses on foreign exchange transactions other than those relating to Fixed Assets are recognised in the Profit & Loss Account.

10 Revenue Recognition:

The Company recognises sale of goods as they are despatched to customers. Sales are net of sales tax, returns and trade discounts. Dividend income is recognised when right to receive dividend is established. Income from food and beverages are recognised at the point of serving these items to the guest. Income stated is exclusive of amount recovered towards sales tax, luxury tax & service tax.

11 Borrowing Costs :

Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalized as part of the cost of that asset. Other borrowing costs are recognized as an expense in the period in which they are incurred.

12 Business Segments :

The company has identified two business segments viz PHARMACEUTICALS & HOSPITALITY Divisions. Revenue & expenses have been identified to respective segments on the basis of operating activities of the enterprise.

Segment assets & liabilities represent asset & liabilities in respective segment.

SEGMENT REPORTING :

Based on the guiding principles given in the Accounting Standard on Segment Reporting ( AS-17) issued by the Institute of Chartered Accountants of India , the Companys primary business segments are Manufacturing and Hospitality / Restaurant divisions.The financial details of the segments are as under.

13 Taxes on Income :

Tax expense (tax saving) is the aggregate of current year tax and deferred tax charged (or credited) to the Profit & Loss Account of the year.

a. Current tax is the provision made for income tax liability on the profits for the year ended 31st March, 2010 in accordance with the provisions of Income Tax Act, 1961.

b. Deferred tax is recognised, on timing differences, being the differences resulting from the recognition of items in the financial statements and in estimating its current income tax provision.

c. Deferred tax assets are recognised on unabsorbed depreciation, unabsorbed business loss and MAT credit under section 115 JA of the Income Tax Act, 1961 only to the extent that there is virtual certainty supported by convincing evidence and on others, to the extent that there is reasonable certainty of their realisation.

d. Deferred tax assets and liabilities are measured using tax rates and the tax laws that have been enacted or substantially enacted at the balance sheet date.

14 Contingent Liabilities:

These are disclosed by way of notes to the accounts. Provision is made in respect of those liabilities which are likely to materialise after the year end till the finalisation of accounts and have material effect on the position stated in the Balance Sheet.

15 Impairment of Assets

The company assesses at each balance sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the management estimates the recoverable amount of the asset.If such recoverable amount of the asset is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the profit and loss account. If at the balance sheet date there is an indication that if a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is refected at the recoverable amount subject to a maximum of depreciated historical cost.

16. Cash Flow Statement.

Cash Flow Statement has been prepared under indirect method.

17. Intangible Assets.

a. Intangible assets are stated at cost less depreciation

b. Computer Software being intangible assets has been shown as Fixed Assets & depreciation has been provided on them at applicable rates.

 
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