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Accounting Policies of Ruchi Infrastructure Ltd. Company

Mar 31, 2015

A) Basis of Accounting

The Accounts have been prepared in accordance with the historical cost convention. The financial statements are prepared as a going concern under the historical cost convention on an accrual basis of accounting in accordance with the Generally Accepted Accounting Principles (GAAP) in India.

These financial statements have been prepared to comply in all material aspects with the Accounting Standards notified under Rule 7 of the Companies (Accounts) Rules, 2014 in respect of section 133 of the Companies Act, 2013 and other recognized accounting practices and policies.

b) Use of Estimates

The preparation and presentation of financial statements requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of financial statements and the reported amounts of revenue and expenses during the reported period. The difference between actual results and estimates are recognized in the period in which the results are known/materialize.

c) Revenue recognition

The Company follows mercantile system of the accounting and recognizes income and expenditure on accrual basis except those with significant uncertainties.

Sales revenue is recognized on transfer of the significant risks and rewards of ownership of the goods to the buyer and stated net of sales tax, VAT, trade discounts and rebates but includes excise duty.

Income from services is recognized as they are rendered based on arrangement/agreement with the concern customers.

The Export incentives are accounted for on accrual basis taking into account certainty of realization and its subsequent utilization.

Interest income is recognized on time proportion basis.

d) Fixed Assets

i) Fixed Assets

Fixed assets (Tangible and Intangible) are stated at cost of acquisition or construction, development, net of tax/duty credit availed if any, including any cost attributable for bringing the assets to its working condition for its intended use, less depreciation, amortization and impairment, if any (except freehold land).

ii) Capital Expenditure

Assets under erection/installation are shown as "Capital work in progress", Expenditure during construction period are shown as "pre-operative expenses" to be capitalized on erection/installations of the assets.

e) Depreciation and amortisation

Depreciation on fixed assets is provided in the manner specified in Schedule II to the Companies Act, 2013. Depreciation of an asset is the difference between Original cost /revalued amount and the estimated residual value, is charged to the statement of profit and loss over the useful life of an asset on written down value method. The estimated useful life of assets and estimated residual value is taken as prescribed under Schedule II to the Companies Ac, 2013.

Depreciation on addition/disposal of assets has been provided on pro rata basis with reference to date of addition/ disposal. Depreciation on assets disposed/discarded is charged upto the date on which such asset is sold.

Intangible assets - Computer software are amortized over a period of 5 years

f) Borrowing cost

Borrowing cost attributable to the acquisition and constructions of qualifying assets are capitalized as part of the cost of such asset up to the date when such asset is ready for its intended use. Other borrowing costs are charged to statement of Profit and Loss.

g) Valuation of inventories

Inventories are valued at lower of cost or net realizable value, except by-product/scrap is valued at net realizable value. Cost of inventory is arrived at by using Moving Average Price Method. Cost of inventory is generally comprises of cost of purchases, cost of conversion and other cost incurred in bringing the inventories to their present location and condition. The excise duty in respect of closing inventory of realizable by products is included as cost of the product.

k) Government Grant

Government grants and subsidies from Government are recognized when there is reasonable certainty that the grant/ subsidy will be received and all attaching conditions will be complied with. Government grants whose primary condition is that the Company should purchase, construct or otherwise acquire capital assets are presented by deducting them from the carrying value of the assets. The grant is recognized as income over the life of a depreciable asset by way of a reduced depreciation charge. Government grants in the nature of promoter's contribution like investment subsidy, where no repayment is ordinarily expected in respect thereof, are treated as capital reserve.

l) Investment

Investment are valued at cost of acquisition. In case of long term investments, no provision is made for diminution in the value of investments, where, in the opinion of the Board of Directors such diminution is temporary.

Current Investments are stated at lower of cost or market/fair value.

m) Foreign currency transaction

a) All transactions in foreign currency are recorded at the rates of the exchange prevailing on the dates when the relevant transactions took place; any gain/ loss on account of the fluctuations in the rate of exchange is recognized in the statement of Profit and Loss.

b) Monetary items in the form of loans, current assets and current liabilities in foreign currencies at the close of the year are converted in the Indian currency at the appropriate rate of exchange prevailing on the dates of the Balance Sheet. Resultant gain or loss on account of fluctuation in the rate of exchange is recognized in the statement of Profit and Loss.

c) In respect of the Forward Exchange Contracts entered into to hedge foreign currency risks, the difference between the Forward Rate and Exchange Rate at the inception of the contract is recognized as income or expense over the life of the contract. Further, the exchange difference arising on such contracts are recognized as income or expense along with the exchange difference on the underlying assets/ liabilities.

n) Employee Benefits

(a) Post-employment benefit plans

i) Defined Contribution Plan - Contributions to Provident Fund and Family Pension fund are accrued in accordance with applicable statute and deposited with appropriate authorities.

ii) Defined Benefit Plan

a. The liability in respect of leave encashment is determined using actuarial valuation carried out as at Balance Sheet date. Actuarial gains and losses are recognized in full in Statement of Profit and Loss for the year in which they occur.

b. The Company has opted for scheme with Life Insurance Corporation of India to cover its liabilities towards employees' gratuity. The annual premium paid to Life Insurance Corporation of India is charged to Statement of Profit and Loss. The Company also carries out actuarial valuation of gratuity using Projected Unit Credit Method as required by Accounting Standard 15 "Employee Benefits" (Revised 2005) and difference between fair value of plan assets and liability as per actuarial valuation as at year end is recognized in Statement of Profit and Loss.

(b) Short term employee benefits

The undiscounted amount of short term employee benefits expected to be paid in exchange for services rendered by employees is recognized during the period when the employees render the services. These benefits include compensated absence also.

o) Provision, Contingent Liabilities and Contingent Asset

Provision involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is possible that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in the financial statements. Contingent assets are neither recognized nor disclosed in the financial statements.

p) Taxes on Income

Provision for Current Tax is the amount of tax payable on taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961.

Deferred tax is recognized on the timing difference, being the difference between taxable income and the accounting income for the year and quantified using the tax rates and laws enacted or substantively enacted as on the balance sheet date.

Deferred tax assets are recognized and carried forward to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax asset can be realized.

q) Segment Accounting

Segment Accounting Policies:- Following accounting policies have been followed by the company for segment reporting.

(1) The Company has disclosed business segment as the primary segment. Segments have been identified taking into account the type of products, the differing risk and returns and the internal reporting system. The various segments identified by the Company comprised as under:

Name of Segment Comprised of

Oils - Manufacturing and trading of Oils and Vanaspati

Other Commodities - Trading of other Commodities

Infrastructure - Storage, Agri Warehousing, Wind Energy

Others - Manufacturing of Soaps, other activities

By products related to each segment have been included in respective segment.

(2) Segment revenue, segment results, segment assets and segment liabilities includes respective amounts directly identified with the segment and also an allocation on reasonable basis of amounts not directly identified. The expenses which are not directly relatable to the business segment are shown as un- allocable corporate cost. Assets and liabilities that cannot be allocated between the segments are shown as un- allocable corporate assets and liabilities respectively. Inter segment revenue are recognized at sale price.

r) Leases

a) As a Lessee

Leases, where risk and reward of ownership, are significantly retained by the lessor are classified as operating leases and lease rental thereon are charged to the statement of profit and loss over the period of lease.

b) As a Lessor

Asset subject to operating leases are included in Fixed Asset, lease income is recognized in the statement of profit and loss on straight line basis over the lease term. Cost including depreciation are recognized as an expenses in the statement of profit and loss. Initial direct costs such as legal cost, brokerage cost etc. recognized immediately in the statement of profit and loss.

s) Impairment of Assets

The carrying amount of assets are reviewed at each Balance Sheet date, if there is any indication of impairment based on internal/ external factors.

An asset is impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to the statement of profit and loss in the year in which an asset is identified as impaired. An impairment loss recognized in prior period is reversed if there has been an indication that impairment loss recognized for an asset no longer exists or may have decreased.

t) Cash Flow Statement

Cash Flows are reported using indirect method, whereby Profit (loss) before extraordinary items and tax is adjusted for the effect of transactions of non-cash nature and any deferrals or accruals of the past or future cash receipts or payments. The Cash Flow from Operating, Investing and Financial activities of the Company are segregated based on the available information.


Mar 31, 2014

A) Basis of Accounting

The Accounts have been prepared in accordance with the historical cost convention. The financial statements are prepared as a going concern under the historical cost convention on an accrual basis of accounting in accordance with the Generally Accepted Accounting Principles (GAAP), Accounting Standards Issued by the Institute of Chartered Accountants of India, as applicable, and the relevant provisions of the Companies Act, 1956.

b) Use of Estimates

The preparation and presentation of financial statements requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of financial statements and the reported amounts of revenue and expenses during the reported period. The difference between actual results and estimates are recognized in the period in which the results are known / materialized.

c) Revenue recognition

The Company follows mercantile system of the accounting and recognises income and expenditure on accrual basis except those with significant uncertainties.

Sales revenue is recognised on transfer of the significant risks and rewards of ownership of the goods to the buyer and stated net of sales tax, VAT, trade discounts and rebates but includes excise duty.

Income from services is recognised as they are rendered based on arrangement / agreement with the concern customers.

The Export incentives are accounted for on accrual basis taking into account certainty of realisation and its subsequent

utilisation.

Interest income is recognised on time proportion basis.

d) Fixed Assets

i) Fixed Assets

Fixed assets (Tangible and Intangible) are stated at cost of acquisition or construction, development, net of tax / duty credit availed if any, including any cost attributable for bringing the assets to its working condition for its intended use, less depreciation, amortization and impairment, if any (except freehold land).

ii) Capital Expenditure

Assets under erection/installation are shown as "Capital work in progress", Expenditure during construction period are shown as "pre-operative expenses" to be capitalized on erection/installations of the assets.

e) Depreciation

Depreciation on fixed assets is provided on written down value method at the rates and in the manner specified in Schedule XIV of the Companies Act, 1956. Depreciation on assets added/disposed off during the year has been provided on pro-rata basis with reference to the date of addition / disposal, except for low value items costing Rs. 5,000/- or less are written off fully in the year of purchase. Premium on Lease hold land is amortized over the period of lease. Intangible assets - Computer software are amortized over its useful life.

f) Borrowing cost

Borrowing cost attributable to the acquisition and constructions of qualifying assets are capitalised as part of the cost of such asset up to the date when such asset is ready for its intended use. Other borrowing costs are charged to statement of Profit and Loss as an expenses in the year in which they are incurred.

g) Valuation of inventories

Inventories are valued at lower of cost or net realisable value, except by-product/scrap is valued at net realisable value. Cost of inventory is arrived at by using Moving Average Price Method. Cost of inventory of finished goods and work in progress is generally comprises of cost of purchases, cost of conversion and other cost incurred in bringing the inventories to their present location and condition. The excise duty in respect of closing inventory of realizable by products is included as cost of the product.

h) Government Grant

Government grants and subsidies from Government are recognized when there is reasonable certainty that the grant / subsidy will be received and all attaching conditions will be complied with. Government grants whose primary condition is that the Company should purchase , construct or otherwise acquire capital assets are presented by deducting them from the carrying value of the assets. The grant is recognized as income over the life of a depreciable asset by way of a reduced depreciation charge. Government grants in the nature of promotor''s contribution like investment subsidy, where no repayment is ordinarily expected in respect thereof, are treated as capital reserve.

i) Investment

Investment are valued at cost of acquisition. In case of long term investments, no provision is made for diminution in the value of investments, where, in the opinion of the Board of Directors such diminution is temporary. Current Investments are stated at lower of cost or market/fair value.

j) Foreign currency transaction

a) All transactions in foreign currency are recorded at the rates of the exchange prevailing on the dates when the relevant transactions took place; any gain/ loss on account of the fluctuations in the rate of exchange is recognized in the statement of Profit and Loss.

b) Monetary items in the form of loans, current assets and current liabilities in foreign currencies at the close of the year are converted in the Indian currency at the appropriate rate of exchange prevailing on the dates of the Balance Sheet. Resultant gain or loss on account of fluctuation in the rate of exchange is recognized in the statement of Profit and Loss .

c) In respect of the Forward Exchange Contracts entered into to hedge foreign currency risks, the difference between the Forward Rate and Exchange Rate at the inception of the contract is recognized as income or expense over the life of the contract. Further, the exchange difference arising on such contracts are recognized as income or expense along with the exchange difference on the underlying assets/ liabilities.

k) Employee Benefits.

(a) Post-employment benefit plans

i) Defined Contribution Plan - Contributions to Provident Fund and Family Pension fund are accrued in

accordance with applicable statute and deposited with appropriate authorities. ii) Defined Benefit Plan

a. The liability in respect of leave encashment is determined using actuarial valuation carried out as at Balance Sheet date. Actuarial gains and losses are recognized in full in Statement of Profit and Loss for the year in which they occur.

b. The Company has opted for scheme with Life Insurance Corporation of India to cover its liabilities towards employees gratuity. The annual premium paid to Life Insurance Corporation of India is charged to Statement of Profit and Loss. The Company also carries out actuarial valuation of gratuity using Projected Unit Credit Method as required by Accounting Standard 15 "Employee Benefits" (Revised 2005) and difference between fair value of plan assets and liability as per actuarial valuation as at year end is recognized in Statement of Profit and Loss.

(b) Short term employee benefits

The undiscounted amount of short term employee benefits expected to be paid in exchange for services rendered by employees is recognized during the period when the employees render the services. These benefits include compensated absence also.

l) Provision, Contingent Liabilities and Contingent Asset

Provision involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is possible that there will be an outflow of resources . Contingent liabilities are not recognized but are disclosed in the Financial statements. Contingent assets are neither recognized nor disclosed in the financial statements.

m) Taxes on Income

Provision for Current Tax is the amount of tax payable on taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961.

Deferred tax is recognised on the timing difference, being the difference between taxable income and the accounting income for the year and quantified using the tax rates and laws enacted or substantively enacted as on the balance sheet date.

Deferred tax assets are recognised and carried forward to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax asset can be realized.

n) Segment Accounting

Segment Accounting Policies :- Following accounting policies have been followed by the company for segment reporting.

(1) The Company has disclosed business segment as the primary segment. Segments have been identified taking into account the type of products, the differing risk and returns and the internal reporting system. The various segments identified by the Company comprised as under :

Name of Segment Comprised of

Oils – Manufacturing and trading of Oils and Vanaspati

Other Commodities – Trading of other commodity

Infrastructure – Storage, Agri Warehousing, Wind Energy

Others – Manufacturing of Soaps, other.

By products related to each segment have been included in respective segment.

(2) Segment revenue, segment results, segment assets and segment liabilities includes respective amounts directly identified with the segment and also an allocation on reasonable basis of amounts not directly identified. The expenses which are not directly relatable to the business segment are shown as un-allocable corporate cost. Assets and liabilities that cannot be allocated between the segments are shown as un-allocable corporate assets and liabilities respectively. Inter segment revenue are recognised at sale price.

o) Impairment of Assets

The carrying amount of assets are reviewed at each Balance Sheet date, if there is any indication of impairment based on internal/ external factors.

An asset is impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to the statement of profit and loss in the year in which an asset is identified as impaired. An impairment loss recognized in prior period is reversed if there has been an indication that impairment loss recognised for an asset no longer exists or may have decreased.

p) Leases

a) As a Lessee

Leases, where risk and reward of ownership, are significantly retained by the lessor are classified as operating leases and lease rental thereon are charged to the statement of profit and loss over the period of lease.

b) As a Lessor

Assets subject to operating leases are included in fixed assets, lease income is recognized in the statement of profit and loss on straight line basis over the lease term. Cost including depreciation are recognized as an expenses in the statement of profit and loss. Initial direct costs such as legal cost, brokerage cost etc. recognized immediately in the statement of profit and loss account.

q) Cash Flow Statement

Cash Flows are reported using indirect method, whereby Profit ( loss ) before extraordinary items and tax is adjusted for the effect of transactions of non cash nature and any deferrals or accruals of the past or future cash receipts or payments. The Cash Flow from Operating , Investing and Financial activities of the Company are segregated based on the available information.


Mar 31, 2013

A) Basis of Accounting

The financial statements are prepared as a going concern under the historical cost convention on an accrual basis of accounting in accordance with the Generally Accepted Accounting Principles (GAAP), Accounting Standards Issued by the Institute of Chartered Accountants of India, as applicable, and the relevant provisions of the Companies Act, 1956.

b) Use of Estimates

The preparation and presentation of financial statements requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of financial statements and the reported amounts of revenue and expenses during the reported period. The difference between actual results and estimates are recognized in the period in which the results are known / materialize.

c) Revenue recognition

The Company follows mercantile system of the accounting and recognises income and expenditure on accrual basis except those with significant uncertainties.

Sales revenue is recognised on transfer of the significant risks and rewards of ownership of the goods to the buyer and stated net of sales tax, VAT, trade discounts and rebates but includes excise duty.

Income from services is recognised as they are rendered based on arrangement / agreement with the concern customers.

The Export incentives are accounted for on accrual basis taking into account certainty of realisation and its subsequent utilisation.

Interest income is recognised on time proportion basis.

d) Fixed Assets

i) Fixed Assets

Fixed assets (Tangible and Intangible) are stated at cost of acquisition or construction, development, net of tax /duty credit availed if any, including any cost attributable for bringing the assets to its working condition for its intended use, less depreciation, amortization and impairment, if any (except freehold land).

ii) Capital Expenditure

Assets under erection/installation are shown as "Capital work in progress", Expenditure during construction period are shown as "pre-operative expenses" to be capitalized on erection/installations of the assets.

e) Depreciation

Depreciation on fixed assets is provided on written down value method at the rates and in the manner specified in Schedule XIV of the Companies Act, 1956. Depreciation on assets added/disposed off during the year has been provided on pro-rata basis with reference to the date of addition / disposal, except for low value items costing Rs. 5,000/- or less are written off fully in the year of purchase. Premium on Lease hold land is amortized over the period of lease.

Intangible assets - Computer software are amortized over its useful life.

f) Borrowing cost

Borrowing cost attributable to the acquisition and constructions of qualifying assets are capitalised as part of the cost of such asset up to the date when such asset is ready for its intended use. Other borrowing costs are charged to statement of Profit and Loss.

g) Valuation of inventories

Inventories are valued at lower of cost or net realisable value, except by-product/scrap is valued at net realisable value. Cost of inventory is arrived at by using Moving Average Price Method. Cost of inventory of finished goods and work-in- progress generally comprises of cost of purchases, cost of conversion and other cost incurred in bringing the inventories to their present location and condition. The excise duty in respect of closing inventory of realisable by products is included as cost of the product.

k) Government Grant

Government grants and subsidies from Government are recognised when there is reasonable certainity that the grant / subsidy will be received and all attaching conditions will be complied with. Government grants whose primary condition is that the Company should purchase, construct or otherwise acquire capital assets are presented by deducting them from the carrying value of the assets. The grant is recognized as income over the life of a depreciable asset by way of a reduced depreciation charge. Government grants in the nature of promotor''s contribution like investment subsidy, where no repayment is ordinarily expected in respect thereof, are treated as capital reserve.

l) Investment

Investment are valued at cost of acquisition. In case of long term investments, no provision is made for diminution in the value of investments, where, in the opinion of the Board of Directors such diminution is temporary.

Current Investments are stated at lower of cost or market/fair value.

m) Foreign currency transaction

a) All transactions in foreign currency are recorded at the rates of the exchange prevailing on the dates when the relevant transactions took place; any gain/ loss on account of the fluctuations in the rate of exchange is recognized in the statement of Profit and Loss.

b) Monetary items in the form of loans, current assets and current liabilities in foreign currencies at the close of the year are converted in the Indian currency at the appropriate rate of exchange prevailing on the dates of the Balance Sheet. Resultant gain or loss on account of fluctuation in the rate of exchange is recognized in the statement of Profit and Loss.

c) In respect of the Forward Exchange Contracts entered into to hedge foreign currency risks, the difference between the Forward Rate and Exchange Rate at the inception of the contract is recognized as income or expense over the life of the contract. Further, the exchange difference arising on such contracts are recognized as income or expense along with the exchange difference on the underlying assets/ liabilities.

n) Employee Benefits

a) Post-employment benefit plans

i) Defined Contribution Plan - Contributions to Provident Fund and Family Pension fund are accrued in accordance

with applicable statute and deposited with appropriate authorities. ii) Defined Benefit Plan

a. The liability in respect of leave encashment is determined using actuarial valuation carried out as at Balance Sheet date. Actuarial gains and losses are recognized in full in Statement of Profit and Loss for the year in which they occur.

b. The Company has opted for scheme with Life Insurance Corporation of India to cover its liabilities towards employees gratuity. The annual premium paid to Life Insurance Corporation of India is charged to Statement of Profit and Loss. The Company also carries out actuarial valuation of gratuity using Projected Unit Credit Method as required by Accounting Standard 15 "Employee Benefits" (Revised 2005) and difference between fair value of plan assets and liability as per actuarial valuation as at year end is recognized in Statement of Profit and Loss.

b) Short term employee benefits

The undiscounted amount of short term employee benefits expected to be paid in exchange for services rendered by employees is recognized during the period when the employees render the services. These benefits include compensated absence also.

o) Provision, Contingent Liabilities and Contingent Asset

Provision involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is possible that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in the Financial statements. Contingent assets are neither recognized nor disclosed in the financial statements.

p) Taxes on Income

Provision for Current Tax is the amount of tax payable on taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961.

Deferred tax is recognised on the timing difference, being the difference between taxable income and the accounting income for the year and quantified using the tax rates and laws enacted or substantively enacted as on the balance sheet date.

Deferred tax assets are recognised and carried forward to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax asset can be realized.

q) Segment Accounting

Segment Accounting Policies :- Following accounting policies have been followed by the company for segment reporting.

(1) The Company has disclosed business segment as the primary segment. Segments have been identified taking into account the type of products, the differing risk and returns and the internal reporting system. The various segments identified by the Company comprised as under :

Name of Segment Comprised of

Oils – Manufacturing and trading of Oils and Vanaspati

Infrastructure – Storage, Agri Warehousing, Wind Energy

Others – Manufacturing of Soaps and trading of other commodity

By-products related to each segment have been included in respective segment.

(2) Segment revenue, segment results, segment assets and segment liabilities includes respective amounts directly identified with the segment and also an allocation on reasonable basis of amounts not directly identified. The expenses which are not directly relatable to the business segment are shown as un-allocable corporate cost. Assets and liabilities that cannot be allocated between the segments are shown as un-allocable corporate assets and liabilities respectively. Inter segment revenue are recognised at sale price.

r) Impairment of Assets

The carrying amount of assets are reviewed at each Balance Sheet date, if there is any indication of impairment based on internal/ external factors.

An asset is impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to the statement of profit and loss in the year in which an asset is identified as impaired. An impairment loss recognized in prior period is reversed if there has been an indication that impairment loss recognised for an asset no longer exists or may have decreased.

s) Cash Flow Statement

Cash Flows are reported using indirect method, whereby Profit (loss) before extraordinary items and tax is adjusted for the effect of transactions of non-cash nature and any deferrals or accruals of the past or future cash receipts or payments. The Cash Flow from Operating, Investing and Financial activities of the Company are segregated based on the available information.


Mar 31, 2012

A) Accounting Convention

The Accounts have been prepared in accordance with the historical cost convention.

b) Use of Estimates

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

c) Revenue recognition

The Company follows mercantile system of the accounting and recognises income and expenditure on accrual basis except those with significant uncertainties.

d) Fixed Assets

i) Fixed Assets

Fixed assets are stated at cost of acquisition or construction, net of tax / duty credit availed if any, including any cost attributable for bringing the assets to its working condition for its intended use, less depreciation (except freehold land).

ii) Capital Expenditure

Assets under erection/installation and advance given for Capital Expenditure are shown as "Capital work in progress", Expenditure during construction period are shown as "pre-operative expenses" to be capitalized on erection/ installations of the assets.

iii) Leasehold Land

Cost of Lease hold land is amortized over the period of lease.

e) Depreciation

Depreciation on fixed assets is provided on written down value method at the rates and in the manner specified in Schedule XIV of the Companies Act, 1956. Depreciation on assets added/disposed off during the year has been provided on pro-rata basis with reference to the date of addition / disposal, except for low value items costing Rs.5,000/- or less are written off fully in the year of purchase.

f) Expenses on issue of Shares

Expenses on issue of shares are charged to profit and loss account.

g) Borrowing cost

Borrowing cost attributable to the acquisition and constructions of assets are capitalised as part of the cost of such asset up to the date when such asset is ready for its intended use. Other borrowing costs are charged to Profit and Loss Account.

h) Premium on Foreign Currency Convertible Bonds (FCCBs)

As a prudent accounting policy, premium payable on the FCCBs even though contingent upon non conversion of the FCCBs into Equity Shares, is proportionately charged to the profit and loss account on pro-rata basis over the life of the FCCBs and the corresponding amount is included in the outstanding amount of FCCBs shown under Unsecured Loans. In the event of conversion of FCCBs into Equity Shares the proportionate amount is written back on pro-rata basis.

i) Valuation of inventories

Inventories are valued at lower of cost or net realisable value, except by-product/scrap is valued at net realisable value. Cost of inventory is arrived at by using Moving Average Price Method. Cost of inventory is generally comprises of cost of purchases, cost of conversion and other cost incurred in bringing the inventories to their present location and condition.

j) Export Incentive

The Export incentives are accounted for on accrual basis taking into account certainty of realisation and its subsequent utilisation.

k) Government Grant

Government grants whose primary condition is that the Company should purchase, construct or otherwise acquire capital assets are presented by deducting them from the carrying value of the assets. The grant is recognized as income over the life of a depreciable asset by way of a reduced depreciation charge. Government grants in the nature of promotor's contribution like investment subsidy, where no repayment is ordinarily expected in respect thereof, are treated as capital reserve.

l) Investment

Investment are valued at cost of acquisition. In case of long term investments, no provision is made for diminution in the value of investments, where, in the opinion of the Board of Directors such diminution is temporary.

Current Investments are stated at lower of cost or market / fair value.

m) Foreign currency transaction

a) All transactions in foreign currency are recorded at the rates of the exchange prevailing on the dates when the relevant transactions took place; any gain / loss on account of the fluctuations in the rate of exchange is recognized in the statement of Profit & Loss.

b) Monetary items in the form of loans, current assets and current liabilities in foreign currencies at the close of the year are converted in the Indian currency at the appropriate rate of exchange prevailing on the dates of the Balance Sheet. Resultant gain or loss on account of fluctuation in the rate of exchange is recognized in the statement of Profit & Loss.

c) In respect of the Forward Exchange Contracts entered into to hedge foreign currency risks, the difference between the Forward Rate and Exchange Rate at the inception of the contract is recognized as income or expense over the life of the contract. Further, the exchange difference arising on such contracts are recognized as income or expense along with the exchange difference on the underlying assets / liabilities.

n) Employee Benefits

(a) Post-employment benefit plans

i) Defined Contribution Plan - Contributions to Provident Fund and Family Pension fund are accrued in accordance with applicable statute and deposited with appropriate authorities.

ii) Defined Benefit Plan:

a. The liability in respect of leave encashment is determined using actuarial valuation carried out as at Balance Sheet date. Actuarial gains and losses are recognized in full in Profit and Loss Account for the year in which they occur.

b. The Company has opted for scheme with Life Insurance Corporation of India to cover its liabilities towards employees gratuity. The annual premium paid to Life Insurance Corporation of India is charged to Profit and Loss Account. The Company also carries out actuarial valuation of gratuity using Projected Unit Credit Method as required by Accounting Standard 15 "Employee Benefits" (Revised 2005) and difference between fair value of plan assets and liability as per actuarial valuation as at year end is recognized in Profit and Loss Account.

(b) Short term employee benefits

The undiscounted amount of short term employee benefits expected to be paid in exchange for services rendered by employees is recognized during the period when the employees render the services. These benefits include compensated absence also.

o) Provision, Contingent Liabilities and Contingent Asset

Provision involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is possible that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in the Financial statements. Contingent assets are neither recognized nor disclosed in the financial statements.

p) Taxes on Income

Provision for Current Tax is the amount of tax payable on taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961.

Deferred tax is recognised on the timing difference, being the difference between taxable income and the accounting income for the year and quantified using the tax rates and laws enacted or substantively enacted as on the balance sheet date.

Deferred tax assets are recognised and carried forward to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax asset can be realized.

q) Segment Accounting

Segment Accounting Policies :-

Following accounting policies have been followed by the company for segment reporting.

(1) The Company has disclosed business segment as the primary segment. Segments have been identified taking into account the type of products, the differing risk and returns and the internal reporting system. The various segments identified by the Company comprised as under:

Name of Segment Comprised of Oils - Crude Oils, Refined Oils, Vanaspati

Infrastructure - Storage, Agri Warehousing, Wind Energy

Other - Soaps

By products related to each segment have been included in respective segment.

(2) Segment revenue, segment results, segment assets and segment liabilities includes respective amounts directly identified with the segment and also an allocation on reasonable basis of amounts not directly identified. The expenses which are not directly relatable to the business segment are shown as unallocable corporate cost. Assets and liabilities that cannot be allocated between the segments are shown as unallocable corporate assets and liabilities respectively. Inter segment revenue are recognised at sale price.

r) Impairment of Assets

The carrying amount of assets are reviewed at each Balance Sheet date, if there is any indication of impairment based on internal/external factors.

An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to the profit and loss account in the year in which an asset is identified as impaired. An impairment loss recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

s) Cash Flow Statement

Cash Flows are reported using indirect method, whereby Profit (loss) before extraordinary items and tax is adjusted for the effect of transactions of non cash nature and any deferrals or accruals of the past or future cash receipts or payments. The Cash Flow from Operating, Investing and Financial activities of the Company are segregated based on the available information.


Mar 31, 2011

A) Accounting Convention

The Accounts have been prepared in accordance with the historical cost convention.

b) Use of Estimates

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

c) Revenue recognition

The Company follows mercantile system of the accounting and recognises income and expenditure on accrual basis except those with significant uncertainties.

d) Fixed Assets

i) Fixed Assets

Fixed assets are stated at cost of acquisition or construction, net of tax/duty credit availed if any, including any cost attributable for bringing the assets to its working condition for its intended use, less depreciation (except freehold land).

ii) Capital Expenditure

Assets under erection/installation and advance given for capital expenditure are shown as "Capital work in progress".

Expenditure during construction period are shown as "pre-operative expenses" to be capitalized on erection/ installations of the assets.

iii) Leasehold Land

Cost of Lease hold land is amortized over the period of lease.

e) Depreciation

Depreciation on fixed assets is provided on written down value method at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956. Depreciation on assets added/disposed off during the year has been provided on pro-rata basis with reference to the date of addition/disposal, except for low value items costing Rs.5,000/- or less are written off fully in the year of purchase.

f) Expenses on issue of Shares

Expenses on issue of shares are charged to profit and loss account.

g) Expenses on issue of Foreign Currency Convertible Bonds

Expenses on issue of Foreign Currency Convertible Bonds are charged to profit and loss account over the life of the Bonds.

h) Borrowing cost

Borrowing cost attributable to the acquisition and constructions of assets are capitalised as part of the cost of such asset up to the date when such asset is ready for its intended use. Other borrowing costs are charged to Profit and Loss Account.

i) Premium on Foreign Currency Convertible Bonds (FCCBs)

As a prudent accounting policy, premium payable on the FCCBs even though contingent upon non conversion of the FCCBs into Equity Shares, is proportionately charged to the profit and loss account on pro-rata basis over the life of the FCCBs and the corresponding amount is included in the outstanding amount of FCCBs shown under Unsecured Loans. In the event of conversion of FCCBs into Equity Shares the proportionate amount will be written back on pro-rata basis.

j) Valuation of inventories

Inventories are valued at lower of cost or net realisable value, except by-product is valued at net realisable value. Cost of inventory is arrived at by using Moving Average Price Method. Cost of inventory is generally comprises of cost of purchases, cost of conversion and other cost incurred in bringing the inventories to their present location and condition.

k) Export Incentive

The Export incentives are accounted for on accrual basis taking into account certainty of realisation and its subsequent utilisation.

I) Government Grant

Government grant are recognized when there is reasonable assurance that the same will be received. Capital grant relating to specific assets are reduced from the gross value of fixed assets and revenue grants are recognized in the Profit and Loss Account.

m) Investment

Investment are valued at cost of acquisition. In case of long term investments, no provision is made for diminution in the value of investments, where, in the opinion of the Board of Directors such diminution is temporary.

Current Investments are stated at lower of cost and market/fair value.

n) Foreign currency transaction

a) All transactions in foreign currency are recorded at the rates of the exchange prevailing on the dates when the relevant transactions took place; any gain/ loss on account of the fluctuations in the rate of exchange is recognized in the Profit & Loss Account. In case of the sale and purchase the same is included in the respective heads.

b) Monetary items in the form of loans, current assets and current liabilities in foreign currencies at the close of the year are converted in the Indian currency at the appropriate rate of exchange prevailing on the dates of the Balance Sheet. Resultant gain or loss on account of fluctuation in the rate of exchange is recognized in the Profit & Loss Account.

c) In respect of the Forward Exchange Contracts entered into to hedge foreign currency risks, the difference between the Forward Rate and Exchange Rate at the inception of the contract is recognized as income or expense over the life of the contract. Further, the exchange difference arising on such contracts are recognized as income or expense along with the exchange difference on the underlying assets/ liabilities.

o) Employee Benefits

(a) Post-employment benefit plans

i) Defined Contribution Plan - Contributions to Provident Fund and Family Pension fund are accrued in accordance with applicable statute and deposited with appropriate authorities.

ii) Defined Benefit Plan

a. The liability in respect of leave encashment is determined using actuarial valuation carried out as at Balance Sheet date. Actuarial gains and losses are recognized in full in Profit and Loss Account for the year in which they occur.

b. The Company has opted for scheme with Life Insurance Corporation of India to cover its liabilities towards employees gratuity. The annual premium paid to Life Insurance Corporation of India is charged to Profit and Loss Account. The Company also carried out actuarial valuation of gratuity using Projected Unit Credit Method as required by Accounting Standard 15 "Employee Benefits" (Revised 2005) and difference between fair value of plan assets and liability as per actuarial valuation as at year end is recognized in the Profit and Loss Account.

(b) Short term employee benefits

The undiscounted amount of short term employee benefits expected to be paid in exchange for services rendered by employees is recognized during the period when the employees render the services. These benefits include compensated absence also.

p) Contingent Liabilities

Contingent Liabilities not provided for in the accounts are disclosed by way of notes.

q) Taxes on Income

Provision for Current Tax is the amount of tax payable on taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961.

Deferred tax is recognised on the timing difference, being the difference between taxable income and the accounting income for the year and quantified using the tax rates and laws enacted or substantively enacted as on the balance sheet date.

Deferred tax assets are recognised and carried forward to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax asset can be realized.

r) Segment Accounting

Segment Accounting Policies :

Following accounting policies have been followed by the company for segment reporting.

(1) The Company has disclosed business segment as the Primary Segment. Segments have been identified taking into account the type of products, the differing risk and returns and the internal reporting system. The various segments identified by the Company comprised as under:

Name of Segment Comprised of Oils - Crude Oils, Refined Oils, Vanaspati

Infrastructure - Storage, Agri Warehousing, Wind Energy

Other - Soap

By products related to each segment have been included in respective segment.

(2) Segment revenue, segment results, segment assets and segment liabilities includes respective amounts directly identified with the segment and also an allocation on reasonable basis of amounts not directly identified. The expenses which are not directly relatable to the business segment are shown as unallocable corporate cost. Assets and liabilities that cannot be allocated between the segments are shown as unallocable corporate assets and liabilities respectively. Inter segment revenue are recognised at sale price.

s) Impairment of Assets

The carrying amount of assets are reviewed at each Balance Sheet date, if there is any indication of impairment based on internal/external factors.

An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to the profit and loss account in the year in which an asset is identified as impaired. An impairment loss recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.











 
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