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Accounting Policies of Kisan Mouldings Ltd. Company

Mar 31, 2014

1.1 Basis of preparation of Financial Statements

The financial statements have been prepared and presented under the historical cost convention in accordance with generally accepted accounting principles (GAAP) in India, the relevant provisions of The Companies Act, 1956 and the applicable Accounting Standards issued by the Institute of Chartered Accountants of India unless otherwise stated elsewhere.

During the period 2012-2013, the revised schedule notified under Companies act 1956 has become applicable to the company for preparation and presentation of the financial statement. The adoption of revised schedule -VI does not impact recognition and measurement principles followed for preparation of the financial statement. The company has also reclassified the previous year figure in accordance with requirement applicable in the current year.

1.2 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 reporting amounts of assets and liabilities and the disclosure of contingent liabilities as at the date of financial statements and reported amounts of revenues and expenses during reporting period. Actual results could differ from these estimates. Any revision to accounting estimates is recognized prospectively in current and future periods

1.3 FixedAssets

1.3.1 Own Fixed Assets

Fixed assets are stated at cost of acquisition which includes all related expenses (net of Cenvat and sales - tax set-off) less accumulated depreciation. All related expenses other than carrying cost, include finance cost till commencement of commercial production and exchange loss on the external commercial borrowing.

The company has adopted the companies (Accounting Standards) amendment rules,2009 relating to accounting Standard - 11 notified by the Government of India as on 31st March, 2009 ( as amend by notification on 29th Dec,2011) which allowed foreign exchange on long term monetary item to be capitalized to the extent they relate to acquisition of the depreciable assets.

1.3.2 Lease Fixed Assets

Operating Lease: - Rental are expensed with reference to lease term and other consideration

1.3.3 Intangible Fixed Assets

Intangible Assets (Patent, Trademark) are stated at cost of acquisition net of cenvat and sales tax less accumulated depreciation.

1.4 Depreciation

Depreciation on fixed assets except Leasehold Lands have been provided on straight line method at the rates and manner as provided in Schedule XIV of the Companies Act, 1956. Amount paid on Leasehold land has been spread over to remaining period of lease and has been written off proportionately.

1.5 Impairment of Assets

In pursuance to Accounting Standard - 28 issued by the Institute of Chartered Accountants of India, the company has assessed no impairment of assets as on 31st March, 2014, hence no provision has been made in the books of accounts.

1.6 Investments

Long term investments are stated at cost and short term investments are stated at lower of cost or market value. Provision for diminution in the value of Long Term Investment is made only if such a decline is other than temporary.

1.7 Retirement Benefits

Annual Contribution towards the gratuity liability is funded with the Life Insurance Corporation of India in accordance with their gratuity scheme. The liability in respect of Leave encashment payable to employees at the year end is provided for.

1.8 Inventories

Items of inventories are valued on the basis given below:

Raw materials

i. At factory landed cost: FIFO basis

ii. In transit: Cost

Finished goods

i. Lying at factory: Lower of cost on FIFO basis or net realizable value.

i. Lying at branches: Lower of landed cost at respective branch on FIFO basis or net realizable value.

Traded goods: At cost on FIFO basis.

Work-in-Process: At cost of such goods arrived at on FIFO basis.

Scraps (reusable): At cost of such goods arrived at on FIFO basis.

Scrap (Other): Lower of cost or net realizable value.

Stores, Spares and Packing Materials: At cost of such goods arrived at on FIFO basis.

Cost of Inventories comprises of the cost of purchases, cost of conversion and other cost including manufacturing overhead incurred in bringing them to their respective present location and condition.

1.9 Revenue Recognition

Revenue from operation includes Sales of goods adjusted for the Excise duty, value added tax, Central Sales Tax and discounts if any as per approved by the management.

Dividend income is recognized when right to receive is established. Interest income is recognized on time proportion basis into accounts the amount outstanding and rate applicable

1.10 Purchase of Raw materials, Stores &Spares and Packing materials

Purchase is net of discount, sales tax, excise duty, but includes custom duty, clearing & forwarding charges, commission on purchases, cartage inwards, & transit insurance.

1.11 Provision for Excise Duty

Closing stock of the finished goods represent including the excise duty which same debited to the Profit & Loss Account to nullifying the effect of addition in the valuation of the finished goods as per accounting standard - 2 of the ICAI

1.12 Provision for Current Tax and Deferred Tax

Income taxes comprise of current tax, deferred tax charges and short excess provision of the earlier year. Provision for current tax is made after taking into consideration benefit admissible under the provision of Income Tax Act, 1961. Deferred tax resulting from the "timing difference" between taxable and accounting income is accounted for using the tax rate and laws that are enacted or substantively enacted as on the balance sheet date

1.13 Provisions, Contingent Liabilities and Contingent Assets

A provision is recognized when the Company has a present obligation as a result of past event and is probable that on out flow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made based on technical evaluation and past experience. These are reviewed at each balance sheet date and adjusted to reflect the current management estimates. Contingent Liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the financial statements.

1.14 Foreign Currency Transaction

The Company has adopted to account for exchange differences arising on reporting of long term foreign currency monetary item in accordance with Companies (Accounting Standards) amendment Rules, 2009 pertaining to Accounting Standards 11 (AS-11) notified by Government of India on 31st March, 2009 (as amended on 29th December, 2011). Accordingly, the effect of exchange difference on foreign currency loan of the company is accounted by addition or deduction to the cost of the assets so far it relates to depreciable capital assets.

IA. Previous year''s figures has been regrouped or recast wherever considered necessary to make them comparable with current year''s figures.

IB. The Company is in the process of appointing a full time Company Secretary by the provision of Section 383A of the Companies Act, 1956. In the absence of the Company Secretary, these financial statements have not been authenticated by a Whole Time Company Secretary as required under Section 215A of the Companies Act, 1956.

2.2 The Company has only one class of equity shares having a par value of Rs. 10 per share. Each holder of equity shares is entitled to one vote per Share. The Company declares & pays dividend in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of the Share- holders in the ensuing Annual General Meeting.

2.3 During the Year Ended 31st March, 2014 the company has recognised Rs. 0.50 (Previous Year Rs. 0.50) per share dividend as proposed for distribution to equity shareholders which is subject to approval of Shareholders in the ensuing Annual General Meeting.

2.4 Information of shareholders having holding more than 5% of Shares in the company.

There are no shareholders having holding more than 5% of Shares in the Company.

2.5 Bonus shares /Buy back /shares for consideration other than cash issued during Past Year.

66.86 lacs equity share were alloted as fully paid up without payment being effected in cash under the scheme of amalgamation in the F.Y. 2012-13.

Apart from above , there are no issue of the bonus shares/buy back of own shares issued during any previous five financial year from the reporting date.

4.1 Additional Information to Secured Long Term Borrowings

The long term portion of term loans are shown under long term borrowings and the current maturities of the long term borrowings are shown under other Current Liabilities as per disclosure requirements of the Revised Schedule VI

4.2 Details Relating to Term Loans

4.2.1 Rupee loans

Details Terms of repayment

A. Secured by way of : -

1. First charge on pari-passu basis on entire fixed assets (excluding fixed assets acquired by external commercial borrowing (ECB) term loan from ICICI Bank , office premises acquired by Housing Loan from ICICI bank) both present and future of the Company.

2. Second charge on pari-passu basis on current assets of the Company.

3. Personal Guarantee of Mr. Ramesh J. Aggarwal - Chairman, Mr. Vijay J. Aggarwal - Vice Chairman-1 & Whole Time Director, Mr. Ashok J.Aggarwal-Vice Chairman-2 & Whole Time Director, Mr.Satish J. Aggarwal - Managing Director and Mr. Sanjeev A. Aggarwal - Joint Managing Director.

4.2.2 Foreign Currency Term Loan - ICICI Bank A) Secured by way of;

1. First charges on all fixed assests financed from using ICICI Bank ECB Term Loan.

2. Second charge on pari-passu basis on current assets of the company

3. Personal Guarantee of Mr. Vijay J. Aggarwal - Vice Chairman-1 & Whole Time Director, Mr. Ashok J. Aggarwal - Vice Chairman-2 & Whole Time Director, Mr. Satish J. Aggarwal-Managing Director and Mr. Sanjeev A. Aggarwal - Joint Managing Director.

4.2.3 Office Loan for Office Premises - ICICI Bank

A) Secured by way of hypothecation of specific office premises relates to ICICI Bank Housing Loan

B) Details Terms of repayment

4.3.1 Rupees Term Loan - NBFC A) Secured by way of;

1. First charges on the mortgage of property situated at Gala-K-1 & Gala - K-3, K Wings, Tex center, 26A ,Chandiwali Road, Off. Saki Vihar raod, Andheri - East, Mumbai having appprox market value of Rs. 2.5 Cr. which is standing in the name of the Reliance Industrial product,a partnership in which director of Kisan Mouldings ltd and their relative are partners.

2. Second charge on pari-passu basis on Fixed Assets of the Company to the extent of Rs. 6.00Cr.

3. Personal Guarantee of Mr. Vijay J. Aggarwal - Vice Chairman-1 & Whole Time Director, Mr. Ashok J. Aggarwal - Vice Chairman-2 & Whole Time Director, Mr. Satish J. Aggarwal-Managing Director and Mr. Sanjeev A. Aggarwal - Joint Managing Director.

4.4. Details Terms of Repayment of Vehicle Loans

A) Secured by way of hypothecation of specific vehicle relates to vehicle loans

5 DEFERRED TAX LIABILITY (Rs. in Lacs)

Deferred Tax Liabilities for the Period ended 31st March, 2014 has been provided on the Provisional Tax Computation of the year

7.4. Working Capital Loans A. Secured by way of

1. First pari passu charge by way of hypothecation of the Company''s entire Current Assets of the Company.

2. Second charge on pari-passu basis over entire Fixed Assets of the Company.

3. Personal Guarantee of Mr. Ramesh J. Aggarwal-Chairman, Mr. Vijay J. Aggarwal-Vice Chairman-1 & Whole Time Director, Mr. Ashok J. Aggarwal-Vice Chairman-2 & Whole Time Director, Mr.Satish J. Aggarwal - Managing Director and Mr.Sanjeev A. Aggarwal Joint Managing Director.

4. Pledge of 7.15 Lakh equity shares held by the following directors/associates/their relative persons of the company on parri-passu basis with term loan lenders.

16.1 The classification of trade receivable between ><6 month period have been taken according to the company''s standards policy of the due date i.e. 90 days for the Micro Irrigations and for rest of product 45 days outstanding from the date of invoice.

17.1 Fixed Deposits Classification between >< 12 month period have been taken from the reporting date (i.e. 01.04.2014 ) to its maturities mentioned on the Fixed deposits receipts


Mar 31, 2012

1.1 Basis of preparation of financial statements

The financial statements have been prepared and presented under the historical cost convention in accordance with generally accepted accounting principles (GAAP) in India, the relevant provisions of The Companies Act, 1956 and the applicable Accounting Standards issued by the Institute of Chartered Accountants of India unless otherwise stated elsewhere.

During the year ended March 31, 2012 the revised schedule notified under companies act 1956 has become applicable to the company for preparation and presentation of the financial statement. The adoption of revised schedule -VI does not impact recognition and measurement principles followed for preparation of the financial statement. The company has also reclassified the previous year figure in accordance with requirement applicable in the current year.

1.2 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 reporting amounts of assets and liabilities and the disclosure of contingent liabilities as at the date of financial statements and reported amounts of revenues and expenses during reporting period. Actual results could differ from these estimates. Any revision to accounting estimates is recognised prospectively in current and future periods

1.3 Fixed Assets

1.3.1 Own Fixed Assets

Fixed assets are stated at cost of acquisition which includes all related expenses (net of Cenvat and sales- tax set-off) less accumulated depreciation. All related expenses other than carrying cost, include finance cost till commencement of commercial production and exchange loss on the external commercial borrowing.

The company has adopted the companies (Accounting Standards) amendment rules,2009 relating to accounting Standard -11 notified by the government of India as on 31 st March, 2009 (as amend by notification on 29th Dec,2011) which allowed foreign exchange on long term monetary item to be capitalized to the extent they relate to acquisition of the depreciable assets.

1.3.2 Lease Fixed Assets

Operating Lease:- Rental are expensed with reference to lease term and other consideration

1.3.3 Intangible Fixed Assets

Intangible Assets (Patent, Trademark) are stated at cost of acquisition net of cenvat and sales tax less accumulated depreciation.

1.4 Depreciation

Depreciation on fixed assets except Leasehold Lands have been provided on straight line method at the rates and manner as provided in Schedule XIV of the Companies Act, 1956. Amount paid on Leasehold land has been spread over to remaining period of lease and has been written off proportionately.

1.5 Impairment of Assets

In pursuance to Accounting Standard -28 issued by the Institute of Chartered Accountants of India, the company has assessed no impairment of assets as on 31st March, 2012, hence no provision has been made in the books of accounts.

1.6 Investments

Long term investments are stated at cost and short term investments are stated at lower of cost or market value. Provision for diminution in the value of Long Term Investment is made only if such a decline is other than temporary.

1.7 Retirement Benefits

Annual Contribution towards the gratuity liability is funded with the Life Insurance Corporation of India in accordance with their gratuity scheme. The liability in respect of Leave encashment payable to employees at the year end is provided for.

1.8 Inventories

Items of inventories are valued on the basis given below:

- Raw materials

I. At factory landed cost: FIFO basis

ii. In transit: Cost

- - Finished goods

I. Lying atfactory: Lowerofcoston FIFO basis or net realizable value.

ii. Lying at branches: Lower of landed cost at respective branch on FIFO basis or net realizable value.

- Traded goods: At cost on FIFO basis.

- Work-in-Process: At cost of such goods arrived at on FIFO basis.

- Scraps (reusable): At cost of such goods arrived at on FIFO basis.

- Scrap (Other): Lower of cost ornet realizable value.

- Stores, Spares and Packing Materials: At cost of such goods arrived at on FI FO basis.

Cost of Inventories comprises of the cost of purchases, cost of conversion and other cost including manufacturing overhead incurred in bringing them to their respective present location and condition.

1.9 Revenue Recognition

Revenue from operation includes Sales of goods adjusted forthe Excise duty, value added tax, central Sales Tax and discounts if any as per approved by the management.

Dividend income is recognised when right to receive is established. Interest income is recognised on time proportion basis into accounts the amount outstanding and rate applicable

1.10 Purchase of raw materials, stores, spares and packing materials

Purchase is net of discount, VAT, excise duty, but includes custom duty, clearing & forwarding charges, commission on purchases, cartage inwards, interest on LC & transit insurance.

1.11 Excise Duty

Excise duty represents finished goods dispatched through Personal Ledger Account (PLA) and out of Cenvat on capital goods Account (RG23C-Part II) but net of unutilized amount in raw material cenvat Account (RG23A-Part II).

1.12 Provision for Current tax and Deferred tax

Income taxes comprise of current tax, deferred tax charges and short excess provision of the last year. Provision for current tax is made after taking into consideration benefit admissible under the provision of income tax act, 1961. Deferred tax resulting from the "timing difference" between taxable and accounting income is accounted for using the tax rate and laws that are enacted or substantively enacted as on the balance sheet date

1.13 Provisions, Contingent Liabilities and Contingent Assets

A provision is recognized when the Company has a present obligation as a result of past event and is probable that on out flow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made based on technical evaluation and past experience. These are reviewed at each balance sheet date and adjusted to reflect the current management estimates. Contingent Liabilities are not recognised but are disclosed in the notes. Contingent Assets are neither recognised nor disclosed in the financial statements.

1.14 Foreign currency Transaction

The Company has elected to account for exchange differences arising on reporting of long term foreign currency monetary item in accordance with Companies (accounting Standards) amendment Rules ,2009 pertaining to accounting standards 11 (AS-11) notified by government of India on 31st march 2009 (as amended on 29th December,2011). Accordingly, the effect of exchange difference on foreign currency loan of the company is accounted by addition or deduction to the cost of the assets so far it relates to depreciable capital assets.


Mar 31, 2011

1.1 Basis of preparation of financial statements

The financial statements have been prepared and presented under the historical cost convention in accordance with generally accepted accounting principles (GAAP) in India, the relevant provisions of The Companies Act, 1956 and the applicable Accounting Standards issued by the Institute of Chartered Accountants of India unless otherwise stated elsewhere.

The Company recognises income and expenditure on an accrual basis except those with significant uncertainties such as unsettled rebate and discounts, claims receivables, interest from customers. The accounting policies have been consistently applied by the company and are consistent with those used in the previous year except valuation of Inventory lying as finished goods and work in process from average cost method to FIFO method resulting into increase in valuation of inventory by Rs. 293.17 Lacs.

1.2 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 reporting amounts of assets and liabilities and the disclosure of contingent liabilities as at the date of financial statements and reported amounts of revenues and expenses during reporting period. Actual results could differ from these estimates. Any revision to accounting estimates is recognised prospectively in current and future periods

1.3 Fixed Assets

Fixed assets are stated at cost of acquisition which includes all related expenses (net of Cenvat and sales- tax set-off) and borrowing cost up to acquisition and installation of the fixed assets. Intangible Assets (Patent, Trademark) are capitalized at the historical cost of acquisition.

Cenvat benefits attributable to acquisition of fixed assets are netted off against the cost of fixed assets in accordance with the guidance note issued by The Institute of Chartered Accountants of India.

Interest and Foreign exchange gain or loss capitalised as per accounting standards issued by The Institute of Chartered Accountants of India.

1.4 Depreciation

Depreciation on fixed assets except Leasehold Lands have been provided on straight line method at the rates and manner as provided in Schedule XIV of the Companies Act, 1956. Amount paid on Leasehold land has been spread over to remaining period of lease and has been written off proportionately.

1.5 Investments

Long term investments are stated at cost and short term investments are stated at lower of cost or market value.

1.6 Retirement Benefits

Annual Contribution towards the gratuity liability is funded with the Life Insurance Corporation of India in accordance with their gratuity scheme. The liability in respect of Leave encashment payable to employees at the year end is provided for.

1.7 Inventories

Items of inventories are valued on the basis given below:

- Raw materials

i. At factory landed cost: FIFO basis ii. In transit: Cost

- Finished goods

i. Lying at factory: Lower of cost on FIFO basis or net realizable value.

ii. Lying at branches: Lower of landed cost at respective branch on FIFO basis or net realizable value.

- Traded goods: At cost on FIFO basis.

- Work-in-Process: At cost of such goods arrived at on FIFO basis.

- Scraps (reusable): At cost of such goods arrived at on FIFO basis.

- Scrap (Other): Lower of cost or net realizable value.

- Stores, Spares and Packing Materials: At cost of such goods arrived at on FIFO basis.

1.8 Revenue Recognition- Sales

Sales includes excise duty, value added tax but net of discounts as approved by the management.

1.9 Purchase of raw materials, stores, spares and packing materials

Purchase is net of discount, sales tax, excise duty, but includes custom duty, clearing & forwarding charges, commission on purchases, cartage inwards, interest on LC & transit insurance.

1.10 Excise Duty

Excise duty represents finished goods dispatched through Personal Ledger Account (PLA) and out of Cenvat on capital goods Account (RG23C-Part II) but net of unutilized amount in raw material cenvat Account (RG23A-Part II).

1.11 Taxation

Income taxes comprise of current tax and deferred tax charges or credit. The deferred tax liability is calculated by applying tax rate and tax laws that have been enacted at the Balance Sheet date.

1.12 Provisions

A provision is recognized when the Company has a present obligation as a result of past event and is probable that on out flow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made based on technical evaluation and past experience. These are reviewed at each balance sheet date and adjusted to reflect the current management estimates.


Mar 31, 2010

1.1 Basis of preparation of financial statements

The financial statements have been prepared and presented under the historical cost convention in accordance with generally accepted accounting principles (GAAP) in India, the relevant provisions of The Companies Act, 1956 and the applicable Accounting Standards issued by the Institute of Chartered Accountants of India unless otherwise stated elsewhere.

The Company recognises income and expenditure on an accrual basis except those with significant uncertainties such as unsettled rebate and discounts, claims receivables, interest from customers. The accounting policies have been consistently applied by the company and are consistent with those used in the previous year.

1.2 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 reporting amounts of assets and liabilities and the disclosure of contingent liabilities as at the date of financial statements and reported amounts of revenues and expenses during reporting period. Actual results could differ from these estimates. Any revision to accounting estimates is recognised prospectively in current and future periods

1.3 Fixed Assets

Fixed assets are stated at cost of acquisition which includes all related expenses (net of Cenvat and sales- tax set- off) and borrowing cost up to acquisition and installation of the fixed assets. Intangible Assets (Patent, Trademark) are capitalized at the historical cost of acquisition.

Cenvat benefits attributable to acquisition of fixed assets are netted off against the cost of fixed assets in accordance with the guidance note issued by The Institute of Chartered Accountants of India.

Interest and Foreign exchange gain or loss capitalised as per accounting standards issued by The Institute of Chartered Accountants of India.

1.4 Depreciation

Depreciation on fixed assets except Leasehold Lands have been provided on straight line method at the rates and manner as provided in Schedule XIV of the Companies Act, 1956. Amount paid on Leasehold Land has been spread over to remaining period of lease and has been written off proportionately.

1.5 Investments

Long term investments are stated at cost and short term investments are stated at lower of cost of market value.

1.6 Retirement Benefits

Annual Contribution towards the gratuity liability is funded with the Life Insurance Corporation of India in accordance with their gratuity scheme. The liability in respect of Leave encashment payable to employees at the year end is provided for.

1.7 Inventories

Items of inventories are valued on the basis given below:

- Raw materials

i. At factory landed cost: FIFO basis ii. In transit: Cost

- Finished goods

i. Lying at factory: Lower of average estimated cost or net realisable value.

ii. Lying at branches: Lower of landed cost at respective branch or net realisable value.

- Traded goods: At cost on FIFO basis.

- Work-in-Process: At estimated average cost.

- Scraps (reusable): At estimated average cost.

- Scrap (Other): Lower of cost or net realisable value.

- Stores, Spares and Packing Materials: At cost of such goods arrived at on FIFO basis.

1.8 Revenue Recognition- Sales

Sales includes excise duty, value added tax but net of discounts as approved by the management.

1.9 Purchase of raw materials, stores, spares and packing materials

Purchase is net of discount, sales tax, excise duty, but includes custom duty, clearing & forwarding charges, commission on purchases, cartage inwards & transit insurance.

1.10 Excise Duty

Excise duty represents finished goods dispatched through Personal Ledger Account (PLA) and out of Cenvat on capital goods Account (RG23C-Part II) but net of unutilised amount in raw material cenvat Account (RG23A-Part II).

1.11 Taxation

Income taxes comprise of current tax and deferred tax charges or credit. The deferred tax liability is calculated by applying tax rate and tax laws that have been enacted at the Balance Sheet date.

1.12 Provisions

A provision is recognised when the Company has a present obligation as a result of past event and is probable that on out flow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made based on technical evaluation and past experience. These are reviewed at each balance sheet date and adjusted to reflect the current management estimates.

 
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