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Accounting Policies of Midfield Industries Ltd. Company

Mar 31, 2012

1. Accounting Conventions:

The financial statements have been prepared under the historical cost conventions in accordance with the generally accepted accounting principles in India including the Accounting Standards notified by the Government of India and issued by the Institute of Chartered Accountants of India, as applicable, and the provisions of the Companies Act, 1956 as adopted consistently by the Company. All income and expenditure having a material bearing on the financial statements are recognized on accrual basis.

2. Use of Estimates:

The preparation of the financial statements requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities ( including contingent liabilities ) as of the date of the financial statements and the reported income and expenses during the reporting period like provision for employee benefits, provision for doubtful debts/ advances/ contingencies, allowances for slow/ nonmoving inventories, useful lives of fixed assets, provision for taxation, etc. Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. Future results may vary from these estimates.

3. Inventories:

Inventories have been valued as under:

- Raw materials, stores and spares and traded goods have been valued at cost. Cost includes freight, taxes and duties and is net of credit under VAT and CENVAT scheme, where applicable.

- Due allowance is made for slow/ nonmoving items, based on Management estimates

- Finished goods and work-in-progress have been valued at cost or net realizable value whichever is lower Cost includes all direct costs and applicable production overheads to bring the goods to the present location and condition.

- Excise duty on closing stock of finished goods has been provided in the accounts and considered for valuation of closing stock. A corresponding liability is created for the same amount.

4. Cash and Cash equivalents (for purposes of Cash flow Statement):

Cash comprises of cash on hand, amount in current accounts and deposit accounts.

Cash flows are reported using the indirect method, whereby profit/ (loss) before tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information. Depreciation and Amortization:

Depreciation on Fixed Assets including on the additions on account of revaluation has been provided on a straight-line method at the rates specified in the Schedule XIV to the Companies Act 1956.

Depreciation on the additional value due to revaluation has been charged to the Revaluation Reserve account.

5. Revenue Recognition

Revenue from the sale of goods is recognized when the significant risks and rewards of ownership have been transferred to the buyer

Revenue from Works Contracts is recognized by reference to the completion of the contract activity at the reporting date, where the contract activity extended beyond the reporting date, on the basis of percentage of completion method.

6. Expenditure:

Expenses are accounted on accrual basis and provision is made for all known losses and liabilities.

7. Tangible Fixed Assets:

Fixed Assets are stated at cost of acquisition as reduced by accumulated depreciation. Costs including financial costs up to the date of commissioning and attributable to the fixed assets are capitalized apart from taxes; freight and other incidental expenses related to the acquisition and installation of the respective fixed assets and excludes duties and taxes to the extent recoverable from tax authorities.

Fixed Assets which are revalued are stated at the amounts revalued as reduced by the depreciation.

8. Foreign Exchange Transactions:

Initial Recognition

Transactions in foreign currencies entered into by the Company are accounted at the exchange rates prevailing on the date of the transaction or at rates that closely approximate the rate at the date of the transaction.

Measurement of foreign currency monetary items at the Balance Sheet date.

Foreign currency monetary items (other than derivative contracts) of the Company at the Balance Sheet date are restated at the year-end rates.

Treatment of exchange differences

Exchange differences arising on settlement/ restatement of short-term foreign currency monetary assets and liabilities of the Company are recognised as income or expense in the Statement of Profit and Loss.

9. Investments

Long term Investments are stated at cost. Provision, if any, is made for permanent diminution in the value of investments. Current investments are stated at lower of cost or market value.

10. Employee Benefits:

a) Short Term Employee Benefits

All employee benefits payable wholly within twelve months of rendering the service are classified as short term employee benefits. Benefits such as salaries, wages and short term compensated absences etc. are recognized in the period in which the employee renders the related service.

b) Provident Fund:

The company contributes to the employee Provident Fund maintained by the Central Government under the Employees Fund Scheme. Both Employee and Company made make monthly contributions to this Provident Fund plan to a specified percentage of the employees salary.

c) Gratuity:

Provision has been made in the financial statements of the Company, in respect of gratuity on accrual basis.

11. Earnings per share:

Basic earnings per share is computed by dividing the profit after tax (including the post tax effect of extraordinary items, if any) by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit after tax (including the post tax effect of extraordinary items, if any) as adjusted for dividend, interest and other charges to expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares.

12. Taxes on Income

Income tax liability for the year is calculated in accordance with the relevant tax laws and regulations applicable to the Company. Deferred tax is recognized on timing differences, being the differences between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.


Mar 31, 2011

1. Basis for preparation of Financial Statements:

The Financial statements have been prepared under the historical cost conventions in accordance with the generally accepted accounting principles in India and the provisions of the Companies Act, 1956 as adopted consistently by the Company. All income and expenditure having a material bearing on the financial statements are recognised on accrual basis.

2. (A) Fixed Assets:

Fixed assets are recorded at historical cost of purchase and do not reflect current values. Cost includes interest and other financial charges attributable to the acquisitions of fixed assets.

B. Intangible Assets:

The IPO Expenditure incurred is amortised over the period of 10 years.

3. Investments:

Long Term Investments are stated at cost.

4. Inventories :

Inventories have been valued as under:

i) Raw materials, work-in-progress, stores and spares and finished goods have been valued at cost or net realisable value whichever is lower.

5. Foreign Exchange Transactions:

All the Foreign exchange transactions entered into during the current period are accounted at the exchange rate prevailing on the date of contract/documentation. Foreign Exchange fluctuations on transactions entered into during the period and received/paid during the period are accounted in the current financial year. The out standing accounts in foreign currency are restated at the end of the year at the foreign currency rate prevailing on that date and any fluctuation on the same is recognised and accounted at the end of the period

6. Revenue Recognition:

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership have been transferred to the buyer.

Revenue from Works Contracts is recognised by reference to the completion of the contract activity at the reporting date, where the contract activity extended beyond the reporting date, on the basis of percentage of the completion method.

7. Employee Benefits:

i) Provident Fund:

The Company contributes to the Employee Provident Fund maintained by the Central Government under the Employees Fund Scheme. Both Employee and Company made make monthly contributions to this Provident Fund plan to a specified percentage of the employees' salary.

ii) Gratuity:

Provision has been made in the financial statements of the Company, in respect of gratuity on accrual basis.

8. Borrowing Costs:

Borrowing costs that are directly attributable or constructions of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowings costs are charged to Profit and Loss Account.

9. Provision for Current & Deferred Tax:

Current tax is determined as the amount of tax payable in respect of taxable income for the year. Deferred tax assets and liabilities are recognised, subject to consideration of prudence, on "timing differences", being the difference between taxable incomes and accounting income, that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets arising on account of unabsorbed depreciation or carry forward of losses under tax laws are recognised only to the extent that there is virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax assets can be realised. Deferred tax assets on account of other timing differences are recognised to the extent that there is a reasonable certainty of its realisaton

10. Provisions, Contingent Liabilities and Contingent Assets:

Provisions involving substantial degree if estimation in measurement is recognised when there is a 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 the notes. Contingent Assets are neither recognised nor disclosed in the financial statements






Mar 31, 2010

1. Accounting Conventions;

The Financial statements have been prepared under the historical cost conventions in accordance with the generally accepted accounting principles in India and the provisions of the Companies Act, 1956 as adopted consistently by the company. All income and expenditure having a material bearing on the financial statements are recognized on accrual basis.

2. Revenue Recognition:

Revenue from the sale of goods is recognized when the significant risks and rewards of ownership have been transferred to the buyer.

Revenue from Works' Contracts is recognized by reference to the completion of the contract activity at the reporting date, where the contract activity extended beyond the reporting date, on the basis of percentage of tile completion method.

3. Expenditure;

Expenses are accounted on accrual basis and provision is made for all known losses and liabilities.

4. Fixed Assets:

Fixed assets are stated at cost of acquisition as reduced by accumulated depreciation. All costs including financial costs up to the date of commissioning and attributable to the fixed assets are capitalized apart from taxes, freight and other incidental expenses related to the acquisition and installation of the respective fixed assets. Fixed assets which are revalued are stated at the amounts revalued are reduced by the depreciation.

5. Depreciation:

Depreciation on Fixed Assets including on the additions on account of revaluation has been provided on a straight-line method at the rates specified in the Schedule XTV to the Companies Act, 1956.

Depreciation on the additional value due to revaluation has been charged to the Revaluation reserve account. -

6. Investments:

Long term Investments are stated at cost. Provision, if any, is made for permanent diminution in the value of investments. Current investments are stated at lower of cost or market value.

7. Inventories:

Inventories have been valued as under:

i) Raw materials, work-in-progress and stores and spares have been valued at cost

ii) Finished goods has been valued at cost or net realizable value whichever is lower

8. Sale Tax Deferment Loan:

The sales tax collected on domestic sales of Company's products form eligible units is treated as interest free sales tax loan from Govt. of A.P. in accordance with the State Govt. incentive Scheme. The amount credited to the loan account is based on the amounts collected as sales tax.

9. Employee Benefits:

- The company is providing gratuity liability to those who have completed the minimum required services under the provision of gratuity Act. Company's contribution towards provident fund and pension fund are charged to profit ad loss account

Leave encashment is accounted on payment basis and charged to profit and loss account

10. Excise Duty:

Excise duty closing stock of finished goods has been provided in the accounts and considered for valuation of closing stock. A corresponding liability is created for the same amount.

11. Miscellaneous Expenditure:

IPO Expenses have been charged to Profit & Loss Account.

12. Income Tax:

Income tax liability for the year is calculated in accordance with the relevant tax laws and regulations applicable to the company.

The deferred tax for the timing difference between book profits and tax profits for the year is accounted for, using the tax rates and laws that have been substantially enacted as of Balance Sheet date.


Mar 31, 2009

1. Accounting Conventions:

The Financial statements have been prepared under the historical cost conventions i accordance with the generally accepted accounting principles in India and the provisions of the Companies Act, 1956 as adopted consistently by the company. All income and expenditure having a material bearing on the financial statements are recognized on accrual basis.

2. Revenue Recognition:

Revenue from the sale of goods is recognized when the significant risks and rewards of ownership have been transferred to the buyer.

Revenue from Works Contracts is recognized by reference to the completion of the contract activity at the reporting date, where the contract activity extended beyond the reporting date, on the basis of percentage of the completion method.

3. Expenditure:

Expenses are accounted on accrual basis and provision is made for all known losses and liabilities.

4. Fixed Assets:

Fixed assets are stated at cost of acquisition as reduced by accumulated deprecia- tion. All costs including financial costs up to the date of commissioning and attribut- able to the fixed assets are capitalized apart from taxes, freight and other incidental expenses related to the acquisition and installation of the respective fixed assets. "ixed assets which are revalued are stated at the amounts revalued are reduced by ine depreciation.

5. Depreciation:

Depreciation on Fixed Assets including on the additions on account of revaluation has been provided on a straight-line method at the rates specified in the Schedule XIV to the Companies Act, 1956.

Depreciation on the additional value due to revaluation has been charged to the Revaluation reserve account.

6. Investments:

Long term Investments are stated at cost. Provision, if any, is made for permanent diminution in the value of investments. Current investments are stated at lower of cost or market value.

7. Inventories:

Inventories have been valued as under:

i) Raw materials, work-in-progress and stores and spares have been valued at cost.

ii) Finished goods has been valued at cost or net realizable value whichever is lower

8. Sale Tax Deferment Loan:

The sales tax collected on domestic sales of Companys products form eligible units is treated as interest free sales tax loan from Govt, of A. P. in accordance with the State Govt. incentive Scheme. The amount credited to the loan account is based on the amounts col- lected as sales tax.

9. Employee Benefits:

The company is providing gratuity liability to those who have completed the minimum re- quired services under the provision of gratuity Act.

Companys contribution towards provident fund and pension fund are charged to profit ad loss account. Leave encashment is accounted on payment basis and charged to profit and loss account.

10. Foreign Exchange Transactions:

All the Foreign exchange transactions entered into during the current period are accounted at the exchange rate prevailing on the date of contract/documentation. Foreign Exchange fluctuations on transactions entered into during the period and received/paid during the period are accounted in the current financial year. The out standing accounts in foreign currency are restated at the end of the year at the foreign currency rate prevailing on that date and any fluctuation on the same is recognized and accounted at the end of the period.

11. Excise Duty:

Excise duty closing stock of finished goods has been provided in the accounts and consid- ered for valuation of closing stock. A corresponding liability is created for the same amount.

12. Miscellaneous Expenditure:

IPO Expenses have been charged to Profit & Loss Account.

13. Income Tax:

Income tax liability for the year is calculated in accordance with the relevant tax laws and regulations applicable to the company.

The deferred tax for the timing difference between book profits and tax profits for the year is accounted for, using the tax rates and laws that have been substantially enacted as of Bal- ance Sheet date.

 
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