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Accounting Policies of Indian Extractions Ltd. Company

Mar 31, 2015

A Basis for preparation of Financial Statements

The financial statements have been prepared and presented under the historical cost convention on an accrual basis of accounting, are in accordance with the applicable requirements of the Comapnies Act, 2013 (the ''Act'') and comply in all material aspects with the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies(Accounts) Rules, 2014(as amended).

b Use of estimates

The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities as at the date of financial statements and the reported amounts of revenues and expenses during the reporting year. Key estimates include estimate of useful life of fixed assets, provision for expenses, future obligations under retirement benefit plans, provision for doubtful debts and income taxes. Actual results could differ from those estimates. Any revision to accounting estimates are recognised prospectively in the current and future periods.

c Fixed Assets and depreciation/ amortisation:

Fixed assets are stated at cost less accumulated depreciation, amortisation and impairment. Cost includes purchase price, inward freight, taxes and expenses incidental to acquisition and installation, up to the point the asset is ready for its intended use.

Expenses related to commercial premises specifically relating to the project / sample flat are amortised over the project completion period which is estimated to be five years.

Depreciation on other fixed assets is provided, pro rata for the period of use, under the Written Down Value (WDV) as per the useful life of the assets prescribed under Schedule II to the Companies Act, 2013.

As per the notification dated 29 August 2014 issued by the Ministry of Corporate Affairs, the Company has charged the carrying value of Nil life assets to the statement of profit and loss.

d Impairment of Assets

Impairment loss is provided to the extent the carrying amount of assets exceeds their recoverable amounts. Recoverable amount is the higher of an asset''s net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of the asset and from its disposal at the end of its useful life. Net selling price is the amount obtainable from sale of the asset in an arm''s length transaction between knowledgeable, willing parties, less the costs of disposal.

e Investments

Current Investments are carried at lower of cost and fair value. Long term investments are carried at cost. However, when there is a decline, other than temporary, the carrying amount is reduced to recognise the decline.

f Borrowing costs:

Interests and other borrowing costs (including front end processing fees) attributable to qualifying assets are allocated as part of the cost of construction / development of such assets. The borrowing costs incurred during the period in which activities, necessary to prepare the assets for their intended use or sale, are in progress, are allocated as aforesaid. Other borrowing costs are charged to the statement of profit and loss.

g Provisions and contingent liabilities:

Provisions are recognised 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 are not discounted to its present value and are determined based on management 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 management estimates. Contingent liabilities are disclosed in respect of possible obligations that arise from past events, whose existence would be confirmed upon the occurrence or non occurrence of one or more uncetain furture events not wholly within the control of the Company.

h Inventories :

Inventories are valued at lower of cost and net realisable value. Cost is determined on the following basis:

(i) Stores and Spare parts First in First out

(ii) Raw Materials First in First out

(iii) Trading Good First in First out

(iv) Finished Goods and Material Cost plus appropriate share Process Stock of overheads

i Retirement benefits:

i) All short term employee benefits are accounted on undiscounted basis during the accounting period based on services rendered by employees

ii) The Company''s liability towards compensated absences is accounted for at the year end on the basis of valuation done as per company''s policy and the resultant gains/losses are charged to the Profit and Loss Account.

iii) The Company''s liability towards gratuity benefits is accounted for at the year end on the basis of valuation done as per Payment of Gratuity Act, 1972.

j Cenvat Credit

CENVAT Credit is accounted on accrual basis on purchase of materials. k Foreign Currency Transactions

Transactions in foreign currency are recorded at the exchange rate prevailing on the date of the transaction. Monetary assets and liabilities are translated at the year-end rate. The difference between the rate prevailing on the date of the transaction and on the date of settlement, as also on the translation of monetary assets and liabilities at the end of the year is recognized as income or expense as the case may be for the year.

l Revenue Recognition

Revenue is recognised to the extent that is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.

Benefits on account of entitlement of export incentives are recognised as and when the right to receive is established.

m Taxes on income

Current taxation

Provision for current tax is recognized based on the estimated tax liability computed after taking credit for allowances and exemptions in accordance with the Income Tax Act, 1961.

Deferred taxation

Deferred tax assets and liabilities are recognised for the future tax consequences attributable to timing differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using the enacted tax rates or tax rates that are substantively enacted at the Balance Sheet dates. The effect on deferred tax assets and liabilities of a change in tax rates is recognised in the period that includes the enactment date. Where there is unabsorbed depreciation or carry forward losses, deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence of realisation of such assets. Other deferred tax assets are recognised only to the extent there is reasonable certainty of realisation in the future. Such assets are reviewed at each Balance Sheet date to reassess realisation.


Mar 31, 2014

A BASIS OF PREPARATION OF FINANCIAL STATEMENTS

The accounts have been prepared to comply in all material aspects with applicable accounting principles in India, the Accounting Standards notified in the Companies (Accounting Standards) Rules, 2006 and the relevant provisions of the Companies Act, 199, read with the General Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of Companies Act, 2013.

b USE OF ESTIMATES

The preparation of the financial statements, in conformity with the generally accepted accounting principles, requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Differences between actual results and estimates recognised in the period in which the results are known / materialize.

c FIXED ASSETS

Fixed Assets are stated at cost of acquisition / construction or book value and includes amounts added on revaluation accumulated depreciation and impairment loss, if any.

d INVESTMENTS

Current Investments are carried at lower of cost and fair value. Long term investments are carried at cost. However, when there is decline, other than temporary, the carrying amount is reduced to recognise the decline.

e DEPRECIATION

Depreciation on fixed assets is provided on straight line /written down value basis in accordance with the Companies Act, 1956.

1 Depreciation is provided at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956

2 Depreciation for the year is provided on the revalued cost of Assets and is charged to the Profit and Loss Account.

3 The company has completely discontinued its manufacturing operations in line with the management's decision as communicated

4 The difference of Rs.8,12,626/- (Previous Year Rs.8,12,676/-) between depreciation provided for the year on revalued cos! of assets and that calculated on original cost of assets for the year has been withdrawn from Revaluation reserve and credited to the Profit and Loss Account.

f INVENTORIES

* Inventories are valued at lower of cost and net realisable value. Cost is determined on the following basis:

(i) Stores and Spare parts First in First out.

(ii) Raw Materials First in First out.

(iii) Trading Goods First in First out.

(iv) Finished Goods and Material Cost plus appropriate share Process Stock of overheads.

g RETIREMENT BENEFITS

1) GRATUITY

The Trustees of Indian Extractions Limited Employees' Gratuity Fund has a fund arrangement (cash accumulation policy) with Life Insurance Corporation of India (LIC) to administer its gratuity benefit scheme. The contributions towards the said funds which are as determined by LIC are charged to revenue each year. Company ascertains the Liability towards Gratuity at the year-end and provision for the differential amount between the liability determined on Actuarial Valuation and Fund balance is provided in the books of account.

2) COMPENSATED ABSENCES

Provision is made for Compensetal absesnces based on leave balance as at the end of the year.

3) PROVIDENT FUND

Liability is determined on the basis of contribution as required under the statute/rules.

h CENVAT CREDIT

CENVAT Credit is accounted on accrual basis on purchase of materials.

i FOREIGN CURRENCY TRANSACTIONS

Transactions in foreign currencies are recorded at the exchange rates prevailing on the date of transaction. Monetary items are translated at the year-end rates. The exchange difference between the rate prevailing on the date of transaction and on the date of settlement as also on translation of monetary items at the end of the year is recognised as income or expense, as the case may be.

Any premium or discount arising at the inception of the forward exchange contract is recognized as income or expense over the life of the contract.

j REVENUE RECOGNITION

Revenue (Income) is recognised when no significant uncertainty as to determination or realisation exists.

k PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS :

Provision involving substantial degree of estimation in measurement is recognised when there is 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 notes, if any. Contingent Assets are neither recognised nor disclosed in the financial statement.

l BORROWING COSTS

Borrowing costs that are attributable to the acquisition, construction or production of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use or sale. All other borrowing costs are charged to revenue.

m GOVERNMENT GRANTS

Grants related to specific fixed assets are disclosed as a deduction from the value of the concerned assets. Grants related to revenue are credited to the Profit and Loss account. Grants in the nature of promoter's contribution are treated as Capital Reserve.

n TAXES ON INCOME

Tax expense comprises of current tax and deferred tax. Current tax is measured at the amount expected to be paid to/ recovered from the tax authorities, using the applicable tax rates. Deferred income tax reflect the current period timing differences between taxable income and accounting income for the period and reversal of timing differences of earlier years/ period. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future income will be available except that deferred tax assets, in case there are unabsorbed depreciation and losses, are recognised if there is virtual certainty that sufficient future taxable income will be available to realise the same.

o DOUBTFUL DEBTS/ADVANCES

Provision is made in the accounts in respect of debts/advances which in the opinion of the management are considered doubtful of recovery.

p IMPAIRMENT LOSS

Impairment loss is provided to the extent the carrying amount of assets exceeds their recoverable amounts. Recoverable amount is the higher of an asset's net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of the asset and from its disposal at the end of its useful life. Net selling price is the amount obtainable from sale of the asset in an arm's length transaction between knowledgeable, willing parties, less the costs of disposal.




Mar 31, 2012

A BASIS OF PREPARATION OF FINANCIAL STATEMENTS

The accounts have been prepared to comply in all material aspects with applicable accounting principles in India, the Accounting Standards notified in the Companies (Accounting Standards) Rules, 2O01 and the relevant provisions of the Companies Act, 1956.

b USE OF ESTIMATES

The preparation of the financial statements, in conformity with the generally accepted accounting principles, requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Differences between actual results and estimates are recognised in the period in which the results are known / materialize.

c FIXED ASSETS

Fixed Assets are stated at cost of acquisition / construction or book value and includes amounts added on revaluation less accumulated depreciation and impairment loss, if any.

d INVESTMENTS

Current Investments are carried at lower of cost and fair value. Long term investments are carried at cost. However, when there is a decline, other than temporary, the carrying amount is reduced to recognise the decline.

e DEPRECIATION

Depreciation on fixed assets is provided on written down value basis in accordance with the Companies Act, 1956.

1 Depreciation is provided at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956

2 Depreciation for the year is provided on the revalued cost of Assets and is charged to the Profit and Loss Account.

3 During the year, the company has discontinued its manufacturing operations in line with the management's decision as communicated. In the view of the said fact no depreciation has been provided from July 2011 onwards on the manufacturing assets of the company.

4 The difference of Rs.9,85,393/- (Previous Year Rs.1,578,707/-) between depreciation provided for the year on revalued cost of assets and that calculated on original cost of assets for the year has been withdrawn from Revaluation reserve and credited to the Profit and Loss Account. Adjustment in revaluation reserve due to sale of free hold land is Rs. 66,766,968/* (previous year Rs. 24,472,1)00/-).

f INVENTORIES

Inventories are valued at lower of cost and net realisable value. Cost is determined on the following basis:

(i) Stores and Spare parts First in First out.

(ii) Raw Materials First in First out.

(iii) Trading Goods First in First out.

(iv) Finished Goods and Material Cost plus appropriate Process Stock share of overheads.

g RETIREMENT BENEFITS

1) GRATUITY .

The Trustees of Indian Extractions Limited Employees' Gratuity Fund has a fund arrangement (cash accumulation policy) with Life Insurance Corporation of India (LIC) to administer its gratuity benefit scheme. The contributions towards the said funds which are as determined by LIC are charged to revenue each year. Company ascertains the Liability towards Gratuity at the year-end and provision for the differential amount between the liability' determined on Actuarial Valuation and Fund balance is provided in the books of account

2) COMPENSATED ABSENCES

Provision is made for Compensetal absences based on leave balance as at the end of the year.

3) PROVIDENT FUND

Liability is determined on the basis of contribution as required under the statute/rules.

h CENVAT CREDIT

CENVAT Credit is accounted on accrual basis on purchase of materials.

i FOREIGN CURRENCY TRANSACTIONS

Transactions in foreign currencies are recorded at the exchange rates prevailing on the date of transaction. Monetary items are translated at the year-end rates. The exchange difference between the rate prevailing on the date of transaction and on the date of settlement as also on translation of monetary items at the end of the year is recognised as income or expense, as the case may be.

Any premium or discount arising at the inception of the forward exchange contract is recognized as income or expense over the life of the contract.

j REVENUE RECOGNITION

Revenue (Income) is recognised when no significant uncertainty as to determination or realisation exists.

k PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS :

Provision involving substantial degree of estimation in measurement is recognised when there is 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 notes, if any. Contingent Assets are neither recognised nor disclosed in the financial statement.

l BORROWING COSTS

Borrowing costs that are attributable to the acquisition, construction or production of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use or sale. All other borrowing costs are charged to revenue.

m GOVERNMENT GRANTS

Grants related to specific fixed assets are disclosed as a deduction from the value of the concerned assets. Grants related to revenue are credited to the Profit and Loss account. Grants in the nature of promoter's contribution are treated as Capital Reserve.

n TAXES ON INCOME

Tax expense comprises of current tax and deferred tax. Current tax is measured at the amount expected to be paid to/ recovered from the tax authorities, using the applicable tax rates. Deferred income tax reflect the current period timing differences between taxable income and accounting income for the period and reversal of timing differences of earlier years/ period. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future income will be available except that deferred tax assets, in case there are unabsorbed depreciation and losses, are recognised if there is virtual certainty that sufficient future taxable income will be available to realise the same.

o DOUBTFUL DEBTS/ADVANCES

Provision is made in the accounts in respect of debts/advances which in the opinion of the management are considered doubtful of recovery.

p IMPAIRMENT LOSS

Impairment loss is provided to the extent the carrying amount of assets exceeds their recoverable amounts. Recoverable amount is the higher of an asset's net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of the asset and from its disposal at the end of its useful life. Net selling price is the amount obtainable from sale of the asset in an arm's length transaction between knowledgeable, willing parties, less the costs of disposal.


Mar 31, 2010

1 BASIS OF PREPARATION OF FINANCIAL STATEMENTS

The accounts have been prepared to comply in all material aspects with applicable accounting principles ift India, the Accounting Standards notified in the Companies (Accounting Standards) Rules, 2006 and the relevant provisions of the Companies Act. 1956

2 USE OF ESTIMATES

The preparation of the financial statements, in conformity with the generally accepted accounting principles, requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financial statements and the repprted amounts of revenues and expenses during the reporting period. Differences between actual results and estimates are recognised in the period in which the results are known / materialize.

3 FIXED ASSETS

Fixed Assets are stated at cost of acquisition / construction or book value and includes amounts added on revaluation less accumulated depreciation and impairment loss, if any.

4 INVESTMENTS

Current Investments are carried at lower of cost and fair value. Long term investments are carried at cost I fowever, when (here is stdecline, other than temporary, the carrying amount is reduced to recognise the decline.

5 DEPRECIATION

Depreciation on fixed assets is provided on straight line /written down value basis in accordance with the Companies Act. 1956 (Refer Note No B 3 )

6 INVENTORIES

Inventories are valued at lower of cost and net realisable value Cost is determined on the following basis:

(i) Stores and Spare parts First in First out.

(ii) Raw Materials First in First out

(iii) Trading Goods First in First out

(lv) Finished Goods and Material Cost plus appropriate share

Process Stock of overheads.

7 RETIREMENT BENEFITS

A) GRATUITY

The Trustees of Indian Extractions Limited Employees Gratuity Fund has stfund arrangement (cash accumulation policy) with Life Insurance Corporation of Indist(LIC) to administer its gratuity benefit scheme. The contributions towards the said funds which are as determined by LIC are charged to revenue each year. Company ascertains the Liability towards Gratuity at the year-end and provision for the differential amount between the liability determined on Actuarial valuation and Fund balance is provided in the books of account

B) COMPENSATED ABSENCES

Provision is made for Compensetal absesnces based on leave balance as at the end of the year.

C) PROVIDENT FUND

Liability is determined on the basis of contribution as required under the statute/rules. .

8 CENVAT CREDIT

CENVAT Credit is accounted on accrual basis on purchase of materials

9 FOREIGN CURRENCY TRANSACTIONS

Transactions in foreign currencies are recorded at the exchange rates prevailing on the date of transaction. Monetary items are translated at the year-end rates. The exchange difference between the rate prevailing on the date of transaction and on the date of settlement as also on translation of monetary items at the end of the year is recognised as income or expense, as the case may be.

Any premium or discount arising at the inception of the forward exchange contract is recognized as income or expense over the life of the contract.

10 REVENUE RECOGNITION

Revenue (Income) is recognised when no significant uncertainty as to determination or realisation exists

11 CONTINGENT LIABILITIES

These, if any, are disclosed in the notes on accounts. Provision is made in the accounts if it becomes probable that an outflow of resources embodying economic benefit will be required to settle the obligation.

12 BORROWING COSTS

Borrowing costs that are attributable to the acquisition, construction or production of qualifying assets are capitalised as part of the cost of such assets. stqualifying asset is one that necessarily takes stsubstantial period of time to get ready for its intended use or sale. All other borrowing costs are charged to revenue.

13 GOVERNMENT GRANTS

Grants related to specific, fixed assets are disclosed as stdeduction from the value of the concerned assets. Grants related to . revenue are credited to the Profit and Loss account. Grants in the nature of promoters contribution are treated as Capital Reserve.

14 TAXES ON INCOME ,

Tax expense comprises of current tax, deferred tax and fringe benefits tax. Current tax is measured at the amount expected to be paid to/ recovered from the tax authorities, using the applicable tax rates. Deferred income tax reflect the current period timing differences between taxable income and accounting income for the period and reversal of timing differences of earlier years/ period Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future

income will be available except that deferred tax assets, in case there are unabsorbed depreciation and losses, are recognised if there is virtual certainty that sufficient future taxable income will be available to realise the same. Fringe benefits tax is recognized in accordance with the relevant provisions of the Income-tax Act, 1961 and the Guidance Note on fr.f.ge Benefits Tax issued by the Institute of Chartered Accountants of India.

15 DOUBTFUL DEBTS/ADVANCES

Provision is made in the accounts in respect of debts/advances which in the opinion of the management are considered doubtful of recovery.

16 IMPAIRMENT LOSS

Impairment loss is provided to the extent the carrying amount of assets exceeds their recoverable amounts Recoverable amount is the higher of an assets net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of the asset and from its disposal at the end of its useful life Net selling price is the amount obtainable from sale of the asset in an arms length trnasaction between knowledgable. willing parties, less the costs of disposal

 
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