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Accounting Policies of Ellenbarrie Industrial Gases Ltd. Company

Mar 31, 2015

A) Accounting Convention

The accompanying financial statements has been prepared as a going concern and in accordance with historical cost convention and on accrual basis using Generally Accepted Accounting Principles. Accounting standards notified under Section 211(3C) of the Companies Act, 1956 and relevant provisions thereof.

b) Fixed Assets

Tangible assets are stated at cost less accumulated depreciation and net of impairment, if any.

Pre-operation expenses including trial run expenses (net of revenue) are capitalized. Borrowing costs during the period of construction is added to the cost of eligible tangible assets. Major improvements in production facilities are capitalized.

Intangible assets are stated at cost less accumulated amortization and net of impairments, if any. Intangible assets having finite useful lives are amortized on a straightine basis over their estimated useful lives.

c) Depreciation

Depreciation on tangible assets, after retaining residual value at 5% of original cost, is provided on straight line method over the useful life of assets estimated by the Management. Depreciation for assets created / sold / disposed off during a period is proportionately charged. Intangible assets are amortized over their estimated useful lives using straight line method.

The Management estimates useful lives for fixed assets as follows1 :

Buildings / Civil Construction 5 to 30 years

Computers / Networks 6 years

Electrical Installations (except motors / plants) « 10 years

Furniture, Fixtures, Fittings 10 years

Motor Vehicles 8 to 10 years

Office Equipment (other than computers) 5 years

Plant and Machineries (including cryogenic vessels) 25 years

Useful lives of assets are estimated based on internal assessment and technical evaluation, the Management believes that the useful lives as given above best represents the period over which the Management expects to use these assets. Hence, the useful lives for these assets are different from the useful lives as prescribed under Part C of the Schedule II of Companies Act, 2013.

Depreciation and amortization methods, useful lives and residual values are reviewed at periodical intervals (Refer to Note 9)

d) Investments

Investments are stated at cost.

e) Inventories

i) Raw Material and Trading Goods are valued at cost.

ii) Finished Goods are valued at lower of cost or net relisable value.

iii)stores and spares are valued at cost using the weighted average cost formula.

iv) Quoted shares and securities are valued at lower of cost or market value.

f) Foreign Currency Transactions

Transactions in foreign currency are recorded at the rate of exchange prevailing on the date of transaction. Year end balance of foreign currency monetary item is translated at the year end rates. Exchange differences arising on settlement of monetary items or on reporting of monetary items at rates different from those at which they were initially recorded during the period or reported in previous financial statements are recognised as income or expense in the period in which they arise. The Company has elected to account for exchange differences arising on reporting of long-term foreign currency monetary items in accordance with Companies (Accounting standards) Amendment Rules, 2009 pertaining to Accounting standard 11 (AS-11) notified by Government of India on 31st March, 2009 (as amended on 29th December, 2011). Accordingly, the effect of exchange differences on foreign currency loans of the Company is accounted by transfer to "Foreign Currency Monetary Item Translation Difference Account" to be amortized over the balance period of the long-term monetary items.

g) Retirement Benefit

The accrued liability for gratuity payable to employees (eligible under Company's gratuity policy) has been calculated on the basis of actuarial valuation and provision is carried after adjusting deposits with group gratuity funds in force, if any. In respect of Provident Fund, the contribution is paid to the fund administered by the Government and is charged to revenue.

h) Borrowing Cost

Interest and other cost in connection with the borrowing of the fund to the extent related / attributed to the acquisition / construction of qualifying fixed assets are capitalized up to the date when such assets are ready for its intended use and other borrowing costs are charged to Profit and Loss Account.

i) Revenue Recognition

Revenue from the sale of products is recognized on transfer of significant risks and rewards of ownership to customer.

j) Provisions

A provision is recognized when there is a present obligation as a result of past event 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 are not discounted to its present value and are determined based on best judgment required to settle the obligation at the balance sheet date. The estimate and associated assumptions are reviewed at each balance sheet date and adjusted to current estimates.

k) Deferred Tax

Deferred tax expense or benefit is recognized on timing differences being the difference between taxable incomes and accounting income that originate in one period and is likely to reverse in one or more subsequent periods. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively by the balance sheet date.

In the event of unabsorbed depreciation and carry forward of losses, deferred tax assets are recognized only to the extent that there is virtual certainty that future taxable income will be available to realize such assets."


Mar 31, 2014

A) Accounting Convention

The accompanying financial statements has been prepared as a going concern and in accordance with historical cost convention and on accrual basis using Generally Accepted Accounting Principles. Accounting Standards notified under Section 211(3C) of the Companies Act, 1956 and relevant provisions thereof.

b) Fixed Assets

Tangible assets are stated at cost less accumulated depreciation and net of impairment, if any. Pre-operation expenses including trial run expenses (net of revenue) are capitalized. Borrowing costs during the period of construction is added to the cost of eligible tangible assets. Major improvements in production facilities are capitalized.

Intangible assets are stated at cost less accumulated amortization and net of impairments, if any. Intangible assets having finite useful lives are amortized on a straight-line basis over their estimated useful lives.

c) Depreciation

In respect of Kalyani Plant & Other Assets

Depreciation has been provided on written down value method as per Schedule XIV of the Companies Act, 1956 of assets acquired upto 31.03.1992 and from 01.04.1994 onwards. For assets acquired between 01.04.1992 to 31.03.1994 depreciation had been provided on straight line method as per Schedule XIV of the Companies Act, 1956.

In respect of Uluberia & Visakhapatnam Plant Depreciation has been provided on straight line method as per Schedule XIV of the Companies Act, 1956.

d) Investments Investments are stated at cost.

e) Inventories

i) Raw Material and Trading Goods are valued at cost.

ii) Finished Goods are valued at lower of cost or net relisable value.

iii) Stores and spares are valued at cost using the weighted average cost formula.

iv) Quoted shares and securities are valued at lower of cost or market value.

f) Foreign Currency Transactions

Transactions in foreign currency are recorded at the rate of exchange prevailing on the date of transaction. Year end balance of foreign currency monetary item is translated at the year end rates. Exchange differences arising on settlement of monetary items or on reporting of monetary items at rates different from those at which they were initially recorded during the period or reported in previous financial statements are recognised as income or expense in the period in which they arise. The Company has elected to account for exchange differences arising on reporting of long-term foreign currency monetary items in accordance with Companies (Accounting Standards) Amendment Rules, 2009 pertaining to Accounting Standard 11 (AS-11) notified by Government of India on 31st March, 2009 (as amended on 29th December, 2011). Accordingly, the effect of exchange differences on foreign currency loans of the Company is accounted by transfer to "Foreign Currency Monetary Item Translation Difference Account" to be amortized over the balance period of the long-term monetary items.

g) Retirement Benefit

The accrued liability for gratuity payable to employees (eligible under Payment of Gratuity Act) has been calculated on the basis of an actuarial valuation made by LIC and the amount is deposited under the LIC Group Gratuity Scheme. In respect of Provident Fund, the contribution is paid to the fund administered by the Government and is charged to revenue.

h) Borrowing Cost

Interest and other cost in connection with the borrowing of the fund to the extent related / attributed to the acquisition / construction of qualifying fixed assets are capitalized up to the date when such assets are ready for its intended use and other borrowing costs are charged to Profit and Loss Account.

i) Revenue Recognition

Revenue from the sale of products is recognized on transfer of significant risks and rewards of ownership to customer.

j) Provisions

A provision is recognized when there is a present obligation as a result of past event 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 are not discounted to its present value and are determined based on best judgment required to settle the obligation at the balance sheet date. The estimate and associated assumptions are reviewed at each balance sheet date and adjusted to current estimates.

k) Deferred Tax

Deferred tax expense or benefit is recognized on timing differences being the difference between taxable incomes and accounting income that originate in one period and is likely to reverse in one or more subsequent periods. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively by the balance sheet date. In the event of unabsorbed depreciation and carry forward of losses, deferred tax assets are recognized only to the extent that there is virtual certainty that future taxable income will be available to realize such assets."


Mar 31, 2013

A) Accounting Convention

The accompanying financial statements had been prepared in accordance with historical cost convention and as a going concern.

b) Fixed Assets

Fixed Assets are stated at cost less depreciation.

c) Depreciation

In respect of Kalyani Plant

Depreciation has been provided on written down value method as per Schedule XIV of the Companies Act, 1956 of assets acquired upto 31.03.1992 and from 01.04.1994 onwards. For assets acquired between 01.04.1992 to 31.03.1994 depreciation had been provided on straight line method as per Schedule XIV of the Companies Act, 1956.

In respect of Uluberia & Visakhapatnam Plant

Depreciation has been provided on straight line method as per Schedule XIV of the Companies Act, 1956.

d) Investments Investments are stated at cost.

e) Inventories

i) Raw Material and Trading Goods are valued at cost.

ii) Finished Goods are valued at lower of cost or net relisable value.

iii) Stores and spares are valued at cost using the weighted average cost formula.

iv) Quoted shares and securities are valued at lower of cost or market value.

v) Unquoted shares are valued at cost.

f) Foreign Exchange Transaction

Transactions in foreign currency are accounted for at the equivalent rupee value on the date of credit by the bank.

g) Retirement Benefit

The accrued liability for gratuity payable to employees has been calculated on the basis of an actuarial valuation made by LIC and the amount is deposited under the LIC Group Gratuity Scheme. In respect of Provident Fund, the contribution is paid to the fund administered by the Government and is charged to revenue.

h) Borrowing Cost

Interest and other cost in connection with the borrowing of the fund to the extent related / attributed to the acquisition / construction of qualifying fixed assets are capitalized up to the state when such assets are ready for its intended use and other borrowing costs are charged to Profit and Loss Account.

i) Revenue Recognition

Revenue from the sale of products are recognized on despatch of goods to customer which corresponds to transfer of significant risks and rewards of ownership,

j) Provisions

A provision is recognized when there is a present obligation as a result of past event 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 are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to current management estimates.


Mar 31, 2012

A) Accounting Convention

The accompanying financial statements had been prepared in accordance with historical cost convention and as a going concern.

b) Fixed Assets

Fixed Assets are stated at cost less depreciation.

c) Depreciation

In respect of Kalyani Plant

Depreciation has been provided on written down value method as per Schedule XIV of the Companies Act, 1956 of assets acquired upto 31.03.1992 and from 01.04.1994 onwards. For assets acquired between 01.04.1992 to 31.03.1994 depreciation had been provided on straight line method as per Schedule XIV of the Companies Act, 1956.

In respect of Uluberia & Visakhapatnam Plant

Depreciation has been provided on straight line method as per Schedule XIV of the Companies Act, 1956.

d) Investments Investments are stated at cost.

e) Inventories

i) Raw Material and Trading Goods are valued at cost.

ii) Finished Goods are valued at lower of cost or net relisable value.

iii) Stores and spares are valued at cost using the weighted average cost formula.

iv) Quoted shares and securities are valued at lower of cost or market value.

v) Unquoted shares are valued at cost.

f) Foreign Exchange Transaction

Transactions in foreign currency are accounted for at the equivalent rupee value on the date of credit by the bank.

g) Retirement Benefit

The accrued liability for gratuity payable to employees has been calculated on the basis of an actuarial valuation made by LIC and the amount is deposited under the LIC Group Gratuity Scheme. In respect of Providend Fund, the contribution is paid to the fund administered by the Government and is charged to revenue.

h) Borrowing Cost

Interest and other cost in connection with the borrowing of the fund to the extent related / attributed to the acquisition / construction of qualifying fixed assets are capitalized up to the state when such assets are ready for its intended use and other borrowing costs are charged to Profit and Loss Account.

i) Revenue Recognition

Revenue from the sale of products are recognized on despatch of goods to customer which corresponds to transfer of significant risks and rewards of ownership.

j) Provisions

A provision is recognized when there is a present obligation as a result of past event 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 are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to current management estimates.


Mar 31, 2010

(a) Accounting Convention :

The accompanying financial statements have been prepared in accordance with historical cost convention and as a going concern.

(b) Fixed Assets :

Fixed Assets are stated at cost less depreciation. No Assets acquired on hire purchase.

(c) Depreciation :

In respect of Kalyani Plant

Depreciation has been provided on written down value method as per Schedule XIV of the Companies Act, 1956 of assets acquired upto 31.03.1992 and from 01.04.1994 onwards, for assets acquired between 01.04.1992 to 31.03.1994 depreciation had been provided on straight line method as per Schedule XIV of the Companies Act, 1956.

In respect of Uluberia & Visakhapatnam Plant

Depreciation has been provided on straight line method as per Schedule XIV of the Companies Act, 1956.

(d) Investments:

Investments are stated at cost.

(e) Inventories:

(i) Raw Materials & Trading Goods are valued at cost.

(ii) Finished goods are valued at lower of cost or net realisable value.

(iii) Stores and spares are valued at cost using the weighted average cost formula.

(iv) Quoted Shares and Securities are valued at lower of cost or market value.

(v) Unquoted shares are valued at cost.

(f) Foreign Exchange Transaction :

Transactions in foreign currency are accounted for at the equivalent rupee value on the date of Credit by the bank.

(g) Retirement Benefit:

The accrued liability for gratuity payable to employees has been calculated on the basis of an actuarial valuation and provided in accounts. In respect of Provident Fund, the contribution is paid to the Fund administered by the Government and is charged to revenue.

(h) Borrowing Cost:

Interest and other cost in connection with the borrowing of the fund to the extent related / attributed to the acquisition / construction of qualifying fixed assets are capitalised up to the state when such assets are ready for its intended use and other borrowing costs are charged to Profit and Loss Account.

(i) Revenue Recognition :

Revenue from the sale of products are recognised on despatch of goods to customer which corresponds to transfer of significant risks and rewards of ownership and are net of sales tax and trade discount.

(j) Provisions:

A provision is recognised when there is a present obligation as a result of past event 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 are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to current management estimates.

 
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