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Accounting Policies of Kesar Petroproducts Ltd. Company

Mar 31, 2015

(a) Basis of preparation of financial statements:

The accounts have been prepared on historical cost basis ignoring changes, if any, in the purchasing power of money and on accounting principles of going concern. All revenues and expenses are accounted on accrual basis. Accounting policies not specifically referred to otherwise are consistent and are in consonance with generally accepted accounting principles.

(b) Use of estimates:

The preparation of financial statements in conformity with Generally Accepted Accounting Principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures of contingent liabilities as at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Any revision of accounting estimates is recognized prospectively in current and future period.

(c) Fixed Assets:

Fixed assets are stated at historical cost less accumulated depreciation and impairment losses if any and net of Cenvat/ Value Added Tax. Cost includes all attributable expenses in bringing the assets to its working condition.

The Company has revalued Fixed Assets, for the year ended 31.03.2015. The Revaluation of the year ended 31.03.2015 has resulted into a Profit of Rs.280,656,260.05/- and the same has been credited to the Revaluation Reserve Account and shown in the Balance Sheet as at 31.03.2015 under the head, Reserves & Surplus.

(d) Impairment:

The carrying amount of asset is reviewed at each balance sheet date if there is any indication of impairment based on internal/external factors, an impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount.

(e) Depreciation:

Depreciation on Fixed Assets has been provided based on the life assigned to each asset in accordance with the Schedule II of Companies Act, 2013 and based on internal technical evaluation, with effect from 01.04.2014.

(f) Investments:

Long term investments are stated at cost, less provision for other than temporary diminution in value. Current investments, except for current maturities of long term investments are stated at the lower of cost and fair value.

(g) Inventories:

i) Raw materials including consumables and stores & spares are valued at cost. The cost determined on the basis of FIFO method.

ii) Work-in-process is valued at cost of materials and labour together with relevant factory overheads. The cost of work in progress is determined on the basis of weighted average method

iii) The finished goods are valued at cost inclusive of excise duty (or) net realizable value whichever is less

(h) Research and Development:

Revenue expenditure on Research and Development is charged to the Profit and Loss Account and Capital Expenditure is added to the cost of fixed assets.

(i) Taxation:

1. Current Tax:

Provision for taxation has been made on assessable profits of the Company as determined Under the Income Tax Act, 1961.

2. Deferred Tax:

In terms of AS.22, the deferred tax for timing differences between the book and tax profit arising out of capital expenditure on research and development, depreciation and provisions for the year is accounted by using the tax rates and laws that have been in force as of the Balance Sheet date.

(j) Foreign Currency Transactions:

a) Transactions in foreign currency are recorded on initial recognition at the exchange rate prevailing at the time of the transaction.

b) Monetary items (i.e. receivables, payables, loans, etc.) denominated in foreign currency are reported using the closing exchange rate on each balance sheet date.

c) The exchange difference arising on the settlement of monetary items on reporting these items at rates different from rates at which these were initially recorded / reported in previous financial statements are recognized as income/expense in the period in which they arise.

(k) Revenue Recognition:

i. Revenue in respect of sale of products is recognized at the point of dispatch to customers.

ii. Sales comprise of value of sale of goods (Net of returns) excluding Sales Tax and Excise Duty.

iii. Revenue in respect of investments is recognized as and when these incomes are ascertained and quantified.

iv. Income from Services is recognized as and when the services are rendered.

v. Export benefits are recognized in the profit and loss account when the right to receive credit as per the terms of the entitlement is established in respect of exports made.

vi. Dividend income is recognized when the right to receive dividend is established.

vii. Lease income under operating lease is recognized in Profit and Loss Account on the basis of accrual of income as per terms of the agreement.

(l) Earnings Per Share (EPS):

The basic EPS is computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity shares outstanding during the year.

Diluted EPS is computed using the weighted average number of equity and dilutive equity equivalent shares outstanding during the year except where the results would be anti dilutive.

(m) Secured Loans:

a. Loans from Financial Institutions assigned to the New Promoters are secured by equitable mortgage of immovable assets (excluding Housing Colony), hypothecation of all the company's moveable assets, (except Book Debts), both present & future, personal guarantees of the then Managing Director and a charge upon the assets of the company as per the Deeds of Assignment duly entered into by the company which exceed over Rs. 6500.00 Lacs in favour of the Secured Lenders per se.

b. Other Secured Loans from M/s. Malvika Harbopharma (P) Ltd are secured by a 1st charge upon all the Fixed Assets including the Housing Colony.

c. Loans from M/s. Invent Assets Reconstruction Company Limited are secured by a 2nd charge upon all the Fixed Assets.

M/s. Invent Assets Reconstruction Company Limited (IARCL) has initiated recovery procedure under the provisions of the Securitization &Reconstruction Of Financial Assets &Enforcement Of Security Interest Act, 2002 wherein it has taken possession of the Residential Colony located at Lote, Ratnagiri. The possession by IARCL has been in consultation with the 1st charge holders M/s. Malvika Harbopharma Private Limited who retain the say in all the settlement of dues of the said loans.

(n) Disclosure regarding parties and transactions as required by AS - 18 issued by the Institute of Chartered Accountants of India are as under:-

B. TRANSACTIONS WITH RELATED PARTY:

The company has not entered into any transactions with related party within the meaning of Accounting Standard 18 "Related Parties Disclosure".

(o) Provisions, contingent liabilities and contingent assets:

A provision is recognized when the Company has a present obligation as a result of past event; 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 reflect the current best estimates.

A disclosure for a contingent liability is made when there is a possible or present obligation that may, but probably will not require an outflow of resources. When there is a possible obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

(p) Segment Reporting:

Based on the guiding principles given in Accounting Standards on "Segment Reporting (AS-17) issued by the ICAI and on the basis of Management Certification, the Company's primary business segment is Chemicals. As the Company's business activity falls within a single primary business segment, the disclosure requirements of AS-17 in this regard does not arise.

(q) Cash and Cash Equivalents:

Cash and cash equivalents in the cash flow statement comprise cash at bank and in hand and short-term investments with an original maturity of three months or less.

(r) The company has opted for Deferral Scheme of Sales Tax liability w.e.f. 01/07/2003. Accordingly the sales tax liability of Rs. 31,19,762 (PY Rs. 31,19,762) shall be repayable after nine years in five equal annual installments.

(s) The figures of the previous years have been regrouped/rearranged wherever necessary and the figures are rounded off to the nearest rupee.


Mar 31, 2014

1. BASIS OF PREPARATION OF ACCOUNTS:

a. The company had been referred to the BIFR for a Rehabilitation Scheme in the year 2005-2006 and accordingly has been restructured and has commenced commercial production in the year 2009- 2010.During the year, the company has been declared out of the purview of the Sick Companies definition as per BIFR Order dated 09/12/2013. The accounts of the company have been prepared on "Going Concern Basis".

b. The accounts have been prepared on historical cost basis ignoring changes, if any, in the purchasing power of money and on accounting principles of going concern. All revenues and expenses are accounted on accrual basis. Accounting policies not specifically referred to otherwise are consistent and are in consonance with generally accepted accounting principles.

2. METHOD OF ACCOUNTING:

The accounts of the company have been prepared on accrual basis of accounting except for encashment of leave salary and gratuity, which are accounted for on cash basis. The same is not in consonance with the provisions of AS-15 "Accounting for Retirement Benefits in Financial Statements" issued by the Institute of Chartered Accountants of India.

3. FIXED ASSETS:

a. Tangible Fixed Assets are stated at their historical costs less depreciation and upon provision of Impairment Losses duly recognized as per the provisions of AS28 issued by the Institute of Chartered Accountants of India. Cost of Acquisition or construction is inclusive of taxes and other incidental expenses up to date, the assets are put to use.

b. Modifications or cost of improvements to the existing Plant & Machinery is capitalized if it increases its useful life as well as capacity of the plant. All other replacement costs are charged to the Profit & Loss Account.

4. DEPRECIATION

1. Depreciation on Plant & Machinery, Buildings has been provided on SLM basis for the period of use at the rates prescribed in Schedule XIV to the Companies Act, 1956. Plant & Machinery is treated as a continuous process plant, since the same is required and designed to operate throughout the year.

2. In the case of other Fixed assets, depreciation is provided on Written Down Value method at the rates prescribed in Schedule XIV to the Companies Act, 1956.

5. INVESTMENTS

Investments are all long term and are stated at costs.

6. VALUATION OF INVENTORY

The Stocks of Materials, Stores, Spares and Packing Materials are valued at cost based on weighted average method. Stock-in -Process and Finished Goods are valued at cost or net realizable values, whichever is lower.

7. RETIREMENT BENEFITS:

The company has various schemes of Retirement Benefits such as Provident Fund, Gratuity, Leave Encashment. The liability for gratuity and Leave Encashment has however not been actuarially determined and the company continues to account for such liability on actual payment basis.

8. REVENUE RECOGNITION

The company recognizes revenue on sale of product, net of discounts and applicable taxes viz VAT, Sales Tax CST etc, when the product is shipped to customer i.e. when the risk and rewards of the ownership is passed on to the customer. The income from services is recognized net of taxes. The Turnover for the year includes Sale Value of Goods& Services excluding rebates& discounts.

9. FOREIGN CURRENCY TRANSACTIONS

The transactions of involving Foreign Exchange on revenue account, for foreign travel, imports, exports income / loss are accounted at exchange rate prevailing on the date of transaction and unsettled transactions are translated at the rate prevailing at the year end. Any income or expense on account of exchange difference on transaction is recognized in the Profit & Loss Account, except ion the case where they relate to acquisition of Fixed Assets. Premium on forward contract is also accounted for in proportions over the period of contract.

10. EXPENDITURE ON BENEFITS OF ENDURING NATURE

Revenue Expenditure on retrenchment expenses including expenses related thereto whose benefits are to be received in coming years are treated as deferred expenditure and such expenditures are amortized over a period of 10 years.

11. CENVAT BENEFIT

Cenvat benefit is accounted for on accrual basis on purchase of raw materials and Capital Goods

12. GOVERNMENT GRANTS

Revenue grants are recognized in the Profit & Loss Accounts. Capital Grants are credited to Capital Reserves.


Mar 31, 2012

1) BASIS OF PREPARATION OF ACCOUNTS:

a. The company had been referred to the BIFR for a Rehabilitation Scheme in the year 2005-2006 and accordingly has been restructured and has commenced commercial production in the year 2009-2010. The accounts of the company have been prepared on "Going Concern Basis".

b. The accounts have been prepared on historical cost basis ignoring changes' if any' in the purchasing power of money and on accounting principles of going concern. All revenues and expenses are accounted on accrual basis. Accounting policies not specifically referred to otherwise are consistent and are in consonance with generally accepted accounting principles.

2) METHOD OF ACCOUNTING:

The accounts of the company have been prepared on accrual basis of accounting except for encashment of leave salary and gratuity' which are accounted for on cash basis. The same is not in consonance with the provisions of AS-15 "Accounting for Retirement Benefits in Financial Statements" issued by the Institute of Chartered Accountants of India.

3) FIXED ASSETS:

(a) Tangible Fixed Assets are stated at their historical costs less depreciation and upon provision of Impairment Losses duly recognized as per the provisions of AS28 issued by the Institute of Chartered Accountants of India. Cost of Acquisition or construction is inclusive of taxes and other incidental expenses up to date' the assets are put to use.

(b) Modifications or cost of improvements to the existing Plant & Machinery is capitalized if it increases its useful life as well as capacity of the plant. All other replacement costs are charged to the Profit & Loss Account.

4) DEPRECIATION

1. Depreciation on Plant & Machinery' Buildings has been provided on SLM basis for the period of use at the rates prescribed in Schedule XIV to the Companies Act' 1956. Plant & Machinery is treated as a continuous process plant' since the same is required and designed to operate throughout the year.

2. In the case of other Fixed assets' depreciation is provided on Written Down Value method at the rates prescribed in Schedule XIV to the Companies Act' 1956.

5) INVESTMENTS

Investments which are all long term are stated at costs.

6) VALUATION OF INVENTORY

a) The Stocks of Materials' Stores' Spares and Packing Materials are valued at cost based on weighted average method. Stock-in -Process and Finished Goods are valued at cost or net realizable values' whichever is lower.

During the year no production operations have been undertaken by the company accept on job working basis. In view of the same' we anticipate a significant reduction in the valuation of the Stocks of Materials' Stores' Spares and Packing Materials of the company as valued by the management due to expiration of its useful life' obsolescence and damages. However the management has not provided for any diminution or devaluation in the values of the same. The above devaluation could not be quantified by us and in our opinion the value of the stock remains overstated and the losses remain equivalents understated as shown in the report due to the same.

7) RETIREMENT BENEFITS:

The company has various schemes of Retirement Benefits such as Provident Fund' Gratuity' Leave Encashment. The liability for gratuity and Leave Encashment has however not been actuarially determined and the company continues to account for such liability on actual payment basis.

8) REVENUE RECOGNITION

The company recognizes revenue on sale of product' net of discounts and applicable taxes viz VAT' Sales Tax CST etc' when the product is shipped to customer ie. when the risk and rewards of the ownership is passed on to the customer. The income from services is recognized net of taxes. The Turnover for the year includes Sale Value of Goods & Services excluding rebates & discounts.

9) FOREIGN CURRENCY TRANSACTIONS

The transactions of involving Foreign Exchange on revenue account' for foreign travel' imports' exports income / loss are accounted at exchange rate prevailing on the date of transaction and unsettled transactions are translated at the rate prevailing at the year end. Any income or expense on account of exchange difference on transaction is recognized in the Profit & Loss Account' except ion the case where they relate to acquisition of Fixed Assets. Premium on forward contract is also accounted for in proportions over the period of contract.

10) EXPENDITURE ON BENEFITS OF ENDURING NATURE

Revenue Expenditure on retrenchment expenses including expenses related thereto whose benefits are to be received in coming years are treated as deferred expenditure and such expenditures are amortized over a period of 10 years.

11) CENVAT BENEFIT

Cenvat benefit is accounted for on accrual basis on purchase of raw materials and Capital Goods

12) GOVERNMENT GRANTS

Revenue grants are recognized in the Profit & Loss Accounts. Capital Grants are credited to Capital Reserves.


Mar 31, 2011

I) BASIS OF PREPARATION OF ACCOUNTS:

The company had been referred to the BIFR for a Rehabilitation Scheme in the year 2005-2006 and accordingly has been restructured and has commenced commercial production in the year 2009-2010. The accounts of the company have been prepared on "Going Concern Basis".

The accounts have been prepared on historical cost basis ignoring changes, if any, in the purchasing power of money and on accounting principles of going concern. All revenues and expenses are accounted on - accrual basis. Accounting policies not specifically referred to otherwise are consistent and are in consonance with generally accepted accounting principles,

II) METHOD OF ACCOUNTING:

The accounts of the company have been prepared on accrual basis of accounting except for encashment of leave salary and gratuity, which are accounted for on cash basis. The same is not in consonance with the provisions of AS-15 "Accounting for Retirement Benefits in Financial Statements" issued by the Institute of Chartered Accountants of India.

III) FIXED ASSETS:

(a) Fixed Assets are stated at their historical costs less depreciation and upon provision of Impairment Losses duly recognized asper the provisions of AS28 issued by the Institute of Chartered Accountants of India. Cost of Acquisition or construction is inclusive of taxes and other incidental expenses up to date, the assets are put to use.

(b) Modifications or cost of improvements to the existing Plant & Machinery is capitalized if it increases its useful life as well as capacity of the plant. All other replacement costs are charged to the Profit & Loss Account.

IV) DEPRECIATION

a) Depreciation on Plant & Machinery, Buildings has been provided on SLM basis for the period of use at the rates prescribed in Schedule XIV to the Companies Act, 1956. Plant & Machinery is treated as a continuous process plant, since the same is required and designed to operate throughout the year.

b) In the case of other Fixed assets, depreciation is provided on Written Down Value method at the rates ' prescribed in Schedule XIV to the Companies Act, 1956.

V) INVESTMENTS

Investments which are all long term are stated at costs.

VI) VALUATION OF INVENTORY

a) The Stocks of Materials, Stores, Spares and Packing Materials are valued at cost based on weighted average method. Stock-in -Process and Finished Goods are valued at cost or net realizable values, whichever is lower.

During the year no production operations have been undertaken by the company. In view of the same, we anticipate a significant reduction in the valuation of the Stocks of Materials, Stores, Spares and Packing Materials of the company as valued by the management due to expiration of its useful life, obsolescence and damages. However the management has not provided for any diminution or devaluation in the values of the same. The above devaluation could not be quantified by us and in our opinion the value of the stock remains overstated and the losses remain equivalents understated as shown in the report due to the same.

VII) RETIREMENT BENEFITS:

The company has various schemes of Retirement Benefits such as Provident Fund, Gratuity, Leave Encashment. The liability for gratuity and Leave Encashment has however not been actuarially determined and the company continues to account for such liability on actual payment basis.

VIII) REVENUE RECOGNITION

Sales Turnover for the year includes Sale Value of Goods, Excise Duty and excludes rebates, discounts.

IX) FOREIGN CURRENCYTRANSACTIONS

The transactions of involving Foreign Exchange on revenue account, for foreign travel, imports, exports income / loss are accounted at exchange rate prevailing on the date of transaction and unsettled transactions are translated at the rate prevailing at the year end. Any income or expense on account of exchange difference on transaction is recognized in the Profit & Loss Account, except ion the case where they relate to acquisition of Fixed Assets. Premium on forward contract is also accounted for in proportions over the period of contract.

X) EXPENDITURE ON BENEFITS OF ENDURING NATURE

Revenue Expenditure on retrenchment expenses including expenses related thereto whose benefits are to be received in coming years are treated as deferred expenditure and such expenditures are amortized over a period of 5 years.

XI) CENVAT BENEFIT.

Convert benefit is accounted for on accrual basis on purchase of raw materials and Capital Goods

XII) GOVERNMENT GRANTS

Revenue grants are recognized in the Profit & Loss Accounts. Capital Grants are credited to Capital Reserves.

XIII) CONTINGENT LIABILITIES

Contingent Liabilities are disclosed by way of note to the accounts


Mar 31, 2010

I) BASIS OF PREPARATION OF ACCOUNTS:

The production process was in-operative since 18th August, 2004 and the plant was under closure since 18th November, 2004. However the new management after taking over the Company under the BIFR Scheme sactioned on 26th March, 2007 has resumed production in the Company with a new product. The management estimates that full scale commercial production shall be achieved during next financial year. The Net Worth of the company as at 31st March, 2004 had been completely eroded and it had become a Sick Industrial unit within the meaning of clause (o) of sub section (1) of Section 3 of the sick industrial Companies (Special Provisions) Act, 1985 (SICA). A reference was made to the Board for Industrial and Financial Reconstruction (BIFR) in 2004 and the company has been declared sick on 23rd December, 2005. The Honorable bench of BIFR has in its meeting held on 26th March, 2007 sanctioned a Rehabilitation Scheme. The BIFR has issued a final order (SS-07) dated 17th August, 2007. The effect of the same has been duly considered in preparation of the accounts. (ReferNote: B-1&2 of Schedule Q).

The accounts have been prepared on historical cost basis, after derating the assets as p[er the BIFR Scheme (SS-07) ignoring changes, if any, in the purchasing power of money and on accounting principles of going concern. All revenues and expenses are accounted on accrual basis. Accounting policies not specifically referred to otherwise are consistent and are in consonance with generally accepted accounting principles.

II) METHOD OF ACCOUNTING:

The accounts of the company have been prepared on accrual basis of accounting except for encashment of leave salary and gratuity, which are accounted for on cash basis. The same is not in consonance with the provisions of AS-15 "Accounting for Retirement Benefits in Financial Statements" issued by the Institute of Chartered Accountants of India.

III) FIXEDASSETS:

(a) Fixed Assets are stated at their historical costs less depreciation and upon provision of Impairment Losses duly recognized as per the provisions of AS28 issued by the Institute of Chartered Accountants of India. Cost of Acquisition or construction is inclusive of taxes and other incidental expenses up to date, the assets are put to use.

(b) Modifications or cost of improvements to the existing Plant & Machinery is capitalized if it increases its useful life as well as capacity of the plant. All other replacement costs are charged to the Profit & Loss Account.

IV) DEPRECIATION

a) Leasehold land is amortized overthe lease period

b) Depreciation on Plant & Machinery, Buildings has been provided on SLM basis for the period of use at the rates prescribed in Schedule XIV to the Companies Act, 1956. Plant & Machinery is treated as a continuous process plant, since the same is required and designed to operate throughout the year.

c) In the case of other Fixed assets, depreciation is provided on Written Down Value method at the rates prescribed in Schedule XIV to the Companies Act, 1956.

V) INVESTMENTS

Investments which are all long term are stated at costs.

VI) VALUATION OF INVENTORY

a) Stocks of Materials, Stores, Spares and Packing Materials are valued at cost based on weighted average method. Stock-in -Process and Finished Goods are valued at cost or net realizable values, whichever is lower.

VII) RETIREMENT BENEFITS:

The company has various schemes of Retirement Benefits such as Provident Fund, Gratuity, Leave Encashment. The liability for gratuity and Leave Encashment has however not been actuarially determined and the company continues to account for such liability on actual payment basis.

VIII) REVENUE RECOGNITION

Sales Turnover for the year includes Sale Value of Goods, Excise Duty and excludes rebates, discounts.

IX) FOREIGN CURRENCYTRANSACTIONS

There are no foreign currecy transactions in the Company except that the supplies of the products is made to a100% EOU in lNR.

X) EXPENDITURE ON BENEFITS OF ENDURING NATURE

Revenue Expenditure on retrenchment expenses including expenses related thereto whose benefits are to be received in coming years are treated as deferred expenditure and such expenditures are amortized over a period of 5 years. -

XI) CENVAT BENEFIT

Cenvat benefit is accounted for on accrual basis on purchase of raw materials and Capital Goods

XII) GOVERNMENT GRANTS

Revenue grants are recognized in the Profit & Loss Accounts. Capital Grants are credited to Capital Reserves.

XIII) CONTINGENT LIABILITIES

Contingent Liabilities are disclosed by way of note to the accounts.


Mar 31, 2009

I) BASIS OF PREPARATION OF ACCOUNTS:

The production process is in-operative since 18th August, 2004 and the plant is under closure since 18th November, 2004. The Net Worth of the company as at 31" March, 2004 had been completely eroded and it had become a Sick Industrial unit within the meaning of clause (o) of sub section (1) of Section 3 of the sick industrial Companies (Special Provisions) Act, 1985 (SICA). A reference was made to the Board for Industrial and Financial Reconstruction (BIFR) in 2004 and the company has been declared sick on 23rd December, 2005. The Board had appointed State Bank of India as the Operating Agency. Subsequently the Board issued a show cause notice on 28th April, 2006 that considering all the factors, why the company should not be wound up under section 20 of the SICA. In response, one of parties submitted a proposal for revival of the company along with the settlement of the dues of the creditors and change in management. The Honourable bench of BIFR has in its meeting held on 26th March, 2007 sanctioned a Rehabilitation Scheme. The BIFR has issued a final order (SS-07) dated 17th August, 2007. The effect of the same has been duly considered in preparation of the accounts. (Refer Note: B-1 & 2 of Schedule Q). The accounts of the company has been prepared on "Going Concern Basis"

II) METHOD OF ACCOUNTING:

The accounts of the company have been prepared on accrual basis of accounting except for encashment of leave salary and gratuity, which are accounted for on cash basis. The same is not in consonance with the provisions of AS-15 "Accounting for Retirement Benefits in Financial Statements" issued by the Institute of Chartered Accountants of India

III) FIXED ASSETS:

(a) Fixed Assets are stated at their historical costs less depreciation and upon provision of Impairment Losses duly recognized as per the provisions of AS28 issued by the Institute of Chartered Accountants of India. Cost of Acquisition or construction is inclusive of taxes and other incidental expenses up to date, the assets are put to use.

(b) Modifications or cost of improvements to the existing Plant & Machinery is capitalized if it increases its useful life as well as capacity of the plant. All other replacement costs are charged to the Profit & Loss Account.

IV) DEPRECIATION

a) Leasehold land is amortized over the lease period

b) Depreciation on Plant & Machinery, Buildings has been provided on SLM basis for the period of use at the rates prescribed in Schedule XIV to the Companies Act, 1956. Plant & Machinery is treated as a continuous process plant, since the same is required and designed to operate throughout the year.

c) In the case of other Fixed assets, depreciation is provided on Written Down Value method at the rates prescribed in Schedule XIV to the CompaniesAd, 1956.

V) INVESTMENTS

Investments which are all long term are stated at costs.

VI) VALUATION OF INVENTORY

a) Stocks of Materials, Stores, Spares and Packing Materials are valued at cost based on weighted average method. Stock-in -Process and Finished Goods are valued at cost or net realizable values, whichever is lower.

VII) RETIREMENT BENEFITS:

The company has various schemes of Retirement Benefits such as Provident Fund, Gratuity, Leave Encashment. The liability for gratuity and Leave Encashment has however not been actuarially determined and the company continues to account for such liability on actual payment basis.

VIII) REVENUE RECOGNITION

Sales Turnover for the year includes Sale Value of Goods, Excise Duty and excludes rebates, discounts.

I) FOREIGN CURRENCY TRANSACTIONS

The transactions of involving Foreign Exchange on revenue account, for foreign travel, imports, exports income / loss are accounted at exchange rate prevailing on the date of transaction and unsettled transactions are translated at the rate prevailing at the year end. Any income or expense on account of exchange difference on transaction is recognized in the Profit & Loss Account, except ion the case where they relate to acquisition of Fixed Assets. Premium on forward contract is also accounted for in proportions over the period of contract.

II) EXPENDITURE ON BENEFITS OF ENDURING NATURE

Revenue Expenditure on retrenchment expenses including expenses related thereto whose benefits are to be received in coming years are treated as deferred expenditure and such expenditures are amortized over a period of 5 years.

III) CENVAT BENEFIT

Cenvat benefit is accounted for on accrual basis on purchase of raw materials and Capital Goods

IV) GOVERNMENT GRANTS

Revenue grants are recognized in the Profit & Loss Accounts. Capital Grants are credited to Capital Reserves.

V) CONTINGENT LIABLILITIES

Contingent Liabilities are disclosed by way of note to the accounts.

 
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