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Accounting Policies of Khaitan (India) Ltd. Company

Mar 31, 2015

A) Basis of Accounting

The Financial Statements are prepared under the historical cost convention, except stated otherwise, on an accrual basis and in accordance with generally accepted Accounting principles in India, the applicable mandatory Accounting Standards as prescribed under Section 133 of the Companies Act, 2013 read with rule 7 of the Companies (Accounts) Rules, 2014.

The financial statements have been prepared and presented as per the requirement of Schedule III as mentioned under Companies Act, 2013.

b) Use of Estimates

The preparation of financial statements require judgements, estimate/ estimates and assumptions to be made that affect the reported amount of assets and liabilities including contingent liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between actual results and estimates are recognized in the period in which the results are known / materialized.

c) Fixed Assets Tangible Fixed Assets

i. Fixed Assets, other than those which have been revalued, are stated at their original cost which includes expenditure incurred in the acquisition and construction/installation and other related expenses.

ii. Revalued assets are stated at the values determined on valuation

Intangible Fixed Assets

Intangible Assets are at cost on initial recognition, after which the same are stated at cost less accumulated amortization and accumulated impairment loss, if any .

d) Depreciation & Amortization

i) Depreciation on tangible fixed assets provided on straight line method at the rates determined based on the useful lives of respective assets as prescribed in the Schedule II of the Companies Act. 2013.

ii) Depreciation for assets purchased / sold during the year is proportionately charged

iii) On amount added on revolution, depreciation is provided on straight line method at the rates determined based on the useful lives of respective assets as prescribed in the Schedule II of the Companies Act.

e) Investments

i. Investments, which are readily realizable and intended to be held for not more than one year from the date on which such investments are made are classified as current investments. All other investments are classified as Long term Investments.

ii. On initial recognition, all investments are measured at cost. The cost comprises purchase price and directly attributable acquisition charges such as brokerage, fees and duties.

iii Long term investments are stated at cost. Provision for diminution is made if the decline in value, in the opinion of the management, is other than temporary.

f) Inventories

Inventories are valued as follows :-

Stores, Spares & Others are valued at cost. Finished Goods are valued at lower of cost or market value. Stock in process of sugar and molasses are valued at lower of estimated cost or realizable value and planted trees having maturity of 18 months are valued at estimated realizable value.

g) Employee Benefits

i. Employee benefits of short term nature are recognized as expense as and when it accrues. Employee benefit of long term nature are recognized as expense based on actuarial valuation using projected unit credit method. ii Post employment benefits in the nature of defined contribution plans are recognized as expense as and when it accrues and that in the nature of defined benefit plans are recognized as expenses based on actuarial valuation using projected unit credit method. Actuarial gains or losses are recognized immediately in the statement of Profit and Loss Account.

h) Foreign Currency Transactions

i. Transactions in foreign currencies are recorded at the rate of exchange prevailing on the date of transaction, year end balance of foreign currency transactions is translated at the year end rates.

ii. All exchange differences are recognized as income or expenses in the period in which they arise

i) Recognition of Revenue and Expenses

All revenue and expenses are accounted for on accrual basis except as otherwise stated. Gross Sales are inclusive of excise duty and net of returns, claims and discount etc. Dividend income is recognized when right to receive is established.

j) Taxation

Provision for current Income Tax is made in accordance with the Income Tax Act, 1961. The deferred tax charge or credit is recognized using substantively enacted tax rates subject to consideration of prudence in timing differences between book and tax profits. Deferred tax Assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred assets can be realized.

k) Impairment

An asset is treated as impaired when the carrying cost of the assets exceeds its recoverable value being higher of value in use and net selling price. Value in use is computed at net present value of cash flow expected over the balance useful lives of the assets. An impairment loss is recognized as an expense in the statement of Profit & Loss in the year in which an asset is identified as impaired. The impairment loss recognized in earlier accounting period is reversed if there has been an improvement in recoverable amount.

l) Borrowing Costs

General and specific borrowing costs attributable to the acquisition, construction or installation of qualifying capital assets till the date of commencement of commercial use of the assets are capitalized. Other borrowing costs are recognized as an expense in the period in which they are incurred

m) Provisions and Contingent Liabilities

A provision is recognized if, as a result of past event, the company has a present legal obligation that is reasonably estimable, and it is probable that an outflow of economic benefits required to settle the obligation at the reporting date. Where no reliable estimate can be made, a disclosure is made as Contingent Liabilities. A disclosure for contingent liability is also made when there is a possible obligation or a present obligation that may but probably will not require an outflow of resources. Where there is a possible obligation or a present obligation in respect of which the likelihood of out flow of resources is remote, no provision or disclosure is made.

Earning Per Share

Basic earnings per share is calculated by dividing the net profit or Loss for the period attributable to equity shareholders.

l) Employees Benefit

Contribution of Employer's Share to Employee's Provident Fund are worked on accrual basis and charged to Profit & Loss Account. The Company also provides for gratuity and leave encashment based on acturial valuation made by an independent actuary as per AS-15.

m) Land on Leases

The company has leased out its land at Ramnagar admeasuring 4.0580 Acres for 99 years for Rs .6553228/ and received lease rent in advance full payment and adjusted Rs.21143 during the year.

n) Provisions

Provisions are recognized in respect of obligations where, based on the evidence available, their existence at the Balance Sheet date.

o) Excise Duty, under expenditure, represents payments made/to be made during the year on goods cleared/to be cleared. Payment of services where service tax is charged and credit for the same is taken as accounted net of service tax.

p) The expenses incurred on sugarcane and on trees are accumulated under the caption "Standing Sugarcane" and "Planted Trees" (excluding planted trees having maturity of over 18 months) respectively and charged to statement of Profit & Loss in the year of harvesting.

(a) There has been no change /movements in number of Shares outstanding at the beginning and at the end of the Reporting period .

(b) The company has only one class of issued shares i.e. Equity Share having par value of Rs. 10/- per share . Each holder of Equity Shares is entitled to one vote per share and equal right for dividend . In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the company after payment of preferential amounts , in proportion to their share holding.


Mar 31, 2014

A) Basis of preparation of Financial Statements

The Financial Statements are prepared in accordance with generally accepted Accounting Standards in India and the provisions of the Companies Act, 1956.

b) Basis of Accounting

The accrual basis of accounting is followed unless otherwise stated.

c) Tangible Fixed Assets

Fixed Assets (excluding Revalued Assets) are stated at cost including cost of installation and other incidental expenses. Assets of Rs. 5,000/- and below have been fully depreciated during the year of purchase.

d) Depreciation & Amortisation

Depreciation on Fixed Assets, acquired after 31.08.1970, has been calculated on Straight Line Method under Section 205(2)(b) of the Companies Act, 1956 while other assets have been depreciated on Written Down Value Method under Section 205(2)(a) of the said Act.

e) Investments

Investments are stated at cost. Provision for diminution in value of investment is not made if they are long term in nature. Investments, which are readily releasable and intended to be held for not more than one year from the date of investment made, are classified as Current Investments. All investments other than long term investments are classified as Current Investments. Current Investments are valued at lower of Cost or Fair Value.

f) Inventories

Inventories are valued on FIFO basis as under:- i) Stores, Spares & Others : At cost exclusive of CENVAT receivable ii) Finished Goods : At lower of cost or market value iii)Stock-in-Process:

-Sugar and Molasses: At lower of estimated cost or realisable value -Planted Trees, having maturity of above 18 months, are taken at estimated realisable value.

g) Cash and Bank Balance

Cash and Bank Balance comprises of cash on hand, balances with banks in current accounts and demand deposits with banks.

h) Foreign ExchangeTransaction

Transactions in foreign currencies are recognised at the prevailing exchange rates on the transaction dates. Realised gains and losses on settlement of foreign currency transactions are recognized in the Profit & Loss Account. Foreign currency monetary items at the year-end are reported at the year-end exchange rate, and the resultant exchange difference is recognised in the Profit & Loss Account.

In respect of transactions covered by Forward Exchange Contracts, the difference between the contract rate and spot rate on the date of transaction is amortised over the life of contract.

i) Contingent Assets & Liabilities

Contingent Liabilities are shown by way of Notes to the Accounts in respect of obligations where, based on the evidence available, their existence at the Balance Sheet date is considered not probable.

Contingent Assets are neither recognised nor disclosed in the financial statements.

j) Impairment of Assets

Impairment of losses, if any is recognised in accordance with the accounting standard issued in this regard by the Institute of Chartered Accountants of India.

k) Segmental Reporting

The company''s operating business are organised and managed as per location of the client. Common cost is allocated to the cost based on the Revenue Mix. Unallocated cost is disclosed separately. The company prepares its segment information in conformity with the accounting policy adapted for preparing and presenting the financial statement of the Company as a whole.

l) Earning Per Share

Basic earning per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders. m) Revenue Recognition Sales are shown inclusive of excise duty and net of returns. Dividend Income is recognised when right to receive is established.

n) Employees Benefits

Contribution of Employer''s Share to Employee''s Provident Fund are worked on accrual basis and charged to Profit & Loss Account. The Company also provides for gratuity and leave encashment based on acturial valuation made by an independent actuary as per As-15.

o) Leases

Lease rentals on operating leases are charged on a monthly basis to Accounts.

Assets taken on Finance Lease have been capitalised during the year of Agreement and charged off in accordance with the applicable rate of depreciation.

p) Borrowing cost

Borrowing costs in relation to a qualifying asset and capitalised as part of the cost of a qualifying asset when it is probable that they will result in future economic benefits to the enterprise and the costs can be measured reliably. Other borrowing costs are recognised as an expense in the period in which they are incurred.

q) Taxation

Provision for tax is made on the taxable income for the year in accordance with the applicable provisions of the Income Tax Act, 1961. Deferred tax is recognised subject to consideration of prudence in respect of deferred tax assets, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

r) Provisions

Provisions are recognised in respect of obligations where, based on the evidence available, their existence at the Balance Sheet date.

s) Excise Duty, under expenditure, represents payments made/to be made during the year on goods cleared/to be cleared. Payment of services where service tax is charged and credit for the same is taken as accounted net of service tax.

t) The expenses incurred on sugarcane and on trees are accumulated under the caption "Standing Sugarcane" and "Planted Trees" (excluding planted trees having maturity of over 18 months) respectively and charged to statement of Profit & Loss in the year of harvesting.

Details of Security

1. Working Capital Term loan from IDBI was secured by Hypothecation of Stock, Book Debts, Standing Corps, all Moveable Properties and Mortgage of 2067.21 acres of Company''s Agriculture Land and second charge on Fixed Assets of Sugar Division and guarantee of its one director, overdrafts against pledge of Fixed Deposit Receipts.

2. Loan from Sugar Development Fund is secured by charge on specified assets and guaranteed by a director of the Company.

Terms of Repayment of Secured Term Loans

1. Loan from Sugar development fund for Rs. 287.55 lacs sanctioned on 31-03-1992 to be disbursed in 3 installments upto 31-03-1995. However, only one instalment of Rs. 132.19 lacs was disbursed. Initially rate of interest was 9% p.a. and penal interest was 2.5% above normal rate of interest. The interest rate was later revised to 4.5%. There was a moratorium of 3 years and Repayment of Principal was to be made in 4 equal annual instalments after expiry of moratorium period and interest on loan was payable annually. At present amount due on principal account is Rs.8563117 (Previous Year Rs.8563117) and Rs.23407350.70 (Previous Year Rs.21759260) towards interest. The Company has sent a proposal to Sugar Development Fund for concession/waiver of interest which is pending. Inerest on loan of Rs.1648081 for the year (Previous Year Rs.1554793) has been provided as per agreement.

The Company has defaulted in repayment of loan and interest in respect of the following :

1. Term Loan from IDBI was to be paid in monthly instalment of Rs.10 lacs. Although the full amount has been paid but the same has not been paid on due dates either in F.Y 2013-14; 2012-13 and 2011-12 and hence over and above the interest, compound interest and penalty on principal amount has been imposed.

2. The loan from Sugar Development Fund of Rs. 132.19 lacs was repayable in 4 annual instalments by 1999. There is a continuous default now. Principal amount of Rs. 46,56,883 has been paid and balance amount due is Rs. 8563117 as on 31-03-2014 (F. Y. 2013-14) and interest due is Rs.23,407,350.70 as on 31.03.2014.


Mar 31, 2013

A) Basis of preparation of Financial Statements

The financial statements have been prepared in accordance with generally accepted Accounting Standards in India and the provisions of the Companies Act, 1956.

b) Basis of Accounting

The Company follows accrual basis of accounting unless otherwise stated.

c) Tangible Fixed Assets

Fixed Assets (excluding Revalued Assets) are stated at cost including cost of installation and other incidental expenses. Assets of Rs.5000/- and below have been fully depreciated during the year of purchase.

d) Depreciation & Amortisation

Depreciation on Fixed Assets acquired after 31.08.1970 has been calculated on straight line method under Sec. 205(2)(b) of the Companies Act, 1956 while other assets have been depreciated on Written Down Value Method under section 205(2)(a) of the said Act.

e) Investments

Investments are stated at cost. Provision for diminution in value of investment is not made if they are long term in nature.

Investments, which are readily releasable and intended to be held for not more than one year from the date of investment made are classified as Current Investments. All investments other than long term investments are classified as non-current investments. Current Investments are valued at lower of Cost or Fair Value.

f) Inventories

Inventories are valued on FIFO basis as under:-

i) Stores, Spares & Others : At cost exclusive of CENVAT receivable

ii) Finished Goods : At lower of cost or market value

iii) Stock-in-Process:

-Sugar and Molasses: At lower of estimated cost or realisable value

-Planted Trees, having maturity of above 18 months, are taken at estimated realisable value.

g) Cash and Cash equivalents

Cash comprises of cash on hand, balances with banks in current accounts and demand deposits with banks.

h) Foreign ExchangeTransaction

Transactions in foreign currencies are recognized at the prevailing exchange rates on the transaction dates. Realised gains and losses on settlement of foreign currency transactions are recognised in the Profit & Loss Account. Foreign currency monetary items at the year-end are reported at the year-end exchange rate, and the resultant exchange difference is recognised in the Profit & Loss Account.

In respect of transactions covered by Forward Exchange Contracts, the difference between the contract rate and spot rate on the date of transaction is amortised over the life of contract.

i) Contingent Assets & Liabilities

Contingent Liabilities are shown by way of Notes to the Accounts in respect of obligations where, based on the evidence available, their existence at the Balance Sheet date is considered not probable. Contingent Assets are neither recognised nor disclosed in the financial statements.

j) Impairment of Assets

Impairment of losses, if any is recognised in accordance with the accounting standard issued in this regard by the Institute of Chartered Accountants of India.

k) Segmental Reporting

The company''s operating business are organised and managed as per location of the client. Common cost is allocated to the cost based on the Revenue Mix. Unallocated cost is disclosed separately. The company prepares its segment information in conformity with the accounting policy adapted for preparing and presenting the financial statement of the Company as a whole.

I) Earning Per Share

Basic earning per share is calculated by dividing the net profit or Loss for the period attributable to equity shareholders.

m) Revenue Recognition

Sales are shown inclusive of excise duty and net of returns. Dividend income is recognised when right to receive is established.

n) Employees Benefits

Contribution of Employer''s Share to Employee''s Provident Fund are worked on accrual basis and charged to Profit & Loss Account. The Company also provides for gratuity and leave encashment based on actuarial valuation made by an independent actuary as per AS-15.

The liability for Gratuity and leave encashment has been provided with Annual Contribution to the Life Insurance Corporation of India under its Group Gratuity-cum-Life tosuiawce S>cVevte( Group Leave Encashment Scheme.

o) Leases

Lease rentals on operating leases are charged on a monthly basis to Accounts. Assets taken on Finance Lease have been capitalised during the year of Agreement and charged off in accordance with the applicable rate of depreciation.

p) Borrowing cost

Borrowing cost in relation to a qualifying asset and capitalised as part of the cost of a qualifying asset when it is probable that they will result in future economic benefits to the enterprise and the costs can be measured reliably. Other borrowing costs are recognised as an expense in the period in which they are incurred.

q) Taxation

Provision for tax is made on the taxable income for the year in accordance with the applicable provisions of the Income Tax Act, 1961. Deferred tax is recognised subject to consideration of prudence in respect of deferred tax assets, on timing differences, being the difference between taxable income and accounting income that originate in one period are capable of reversal in one or more subsequent periods.

r) Provisions

Provisions are recognised in respect of obligations where, based on the evidence available, their existence at the Balance Sheet date.

s) Excise duty under expenditure, represents payments made/ to be made during the year on goods cleared/ to be cleared.

Payment of services where service tax is charged and credit for the same is taken as accounted net of service tax.

t) The expenses incurred on sugarcane and on trees are accumulated under the caption "Standing Sugarcane" and "Planted Trees" (excluding planted trees having maturity of over 18 months) respectively and charged to statement of Profit & Loss in the year of harvesting.


Mar 31, 2010

1. a) The Financial Statements are prepared in accordance with generally accepted accounting principles and as per the requirements of the Companies Act, 1856.

b) The accrual basis of accounting is followed unless otherwise stated.

c) Fixed Assets (excluding Revalued Assets) are stated at cost including cost of installation and other incidental expenses. Assets of Rs. 5,000/- and below have been fully depreciated during the year of purchase.

d) Depreciation on Fixed Assets, acquired after 31.08.1970, has been calculated on Straight Line Method under Section 205(2)(b) of the Companies Act, 1956 while other assets have been depreciated on Written Down Value Method under Section 205(2)(a) of the said Act.

e) Investments are stated at cost. Temporary diminution in the value of investments have not been provided for as they are long term in nature.

f) Inventories are valued on FIFO basis as under:-

i) Stores, Spares & Others : At cost exclusive of CENVAT receivable

ii) Finished Goods : At lower of cost or market value

iii) Stock-in-Process :

-Sugar and Molasses : at lower of estimated cost or realisable value -Planted Trees, having maturity of above 18 months, are taken at estimated realisable value

g) The liability for Gratuity and leave encashment is not provided for and actual liability is accounted for in the year of retirement of employees, except for the employees of the Marketing Division for which annual contribution is made to the Life Insurance Corporation of India under its Group Gratuity-cum-Life Assurance Scheme/Group Leave Encashment Scheme.

h) Sales are shown inclusive of excise duty and net of returns.

i) Foreign Exchange Transactions :

i) Transactions in foreign currencies are recognised at the prevailing exchange rates on the transaction dates. Realised gains and losses on settlement of foreign currency transactions are recognised in the Profit & Loss Account. Foreign currency monetary items at the year-end are reported at the year-end exchange rate, and the resultant exchange difference is recognised in the Profit & Loss Account.

ii) In respect of transactions covered by Forward Exchange Contracts, the difference between the contract rate and spot rate on the date of transaction is amortised over the life of contract. j) The expenses incurred on Sugarcane and on Trees are accumulated under the caption

"Standing Sugarcane" and "Planted Trees" (excluding Planted Trees having maturity of

over 18 months) respectively and charged to Profit & Loss Account in the year of

harvesting.

k) Excise Duty under expenditure, represents payments made/to be made during the year on goods cleared/to be cleared.

I) Borrowing Cost: Borrowing costs in relation to a qualifying asset and capitalised as part of the cost of a qualifying asset when it is probable that they will result in future economic benefits to the enterprise and the costs can be measured reliably. Other borrowing costs are recognised as an expense in the period in which they are incurred.

m) Impairment of losses, if any, are recognised in accordance with the accounting standard issued in this regard by the Institute of Chartered Accountants of India.

n) Taxation : Provision for tax is made on the taxable income for the year in accordance with the applicable provisions of the Income Tax Act, 1961. Deferred tax is recognised subject to consideration of prudence in respect of deferred tax assets, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

o) Provisions are recognised in respect of obligations where, based on the evidence available, their existence at the Balance Sheet date.

Contingent Liabilities are shown by way of Notes to the Accounts in respect of obligations where, based on the evidence available, their existence at the Balance Sheet date is considered not probable.

Contingent assets are neither recognised nor disclosed in the financial statements.

p) Payment for services where service tax is charged and credit for the same is taken as accounted net of service tax.

 
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