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Accounting Policies of Sanwaria Agro Oils Ltd. Company

Mar 31, 2014

1. Presentation and Disclosure of Financial Statements:- From financial year 2011-2012 onwards, the revise schedule VI notified under the companies act 1956 has become applicable to the company, for preparation & presentation of its financial statements. The adoption of revised schedule VI does not impact recognition & measurement principals followed for preparation of financial statements. However it has significant impact on presentation & disclosures made in the financial statements. The company has also re-classified the previous year figure in accordance with the requirements applicable in the current year.

2. Use of Estimates:- The preparation of financial statements is in conformity with the generally accepted accounting principles (GAAP) requires estimates & assumptions to be made that affect the reportable amount of assets & liabilities on the date of financial statements and the reportable amount of revenue and expenses during the reporting period. Difference between the actual results and estimates are recognized in the year in which the results are known/ materialized.

3. Method of Accounting:- The Company maintains its accounts on accrual basis following the historical cost convention in accordance with applicable mandatory Accounting Standards issued by the Institute of Chartered Accountants of India and relevant provisions of the Companies Act, 1956.

4. Revenue Recognition:-

a) Sale:- The Company recognises sale of goods on transfer of significant risks and rewards of ownership to the customers. Sales (Gross) are inclusive of excise duty and net off trade discounts and sales return, wherever applicable.

b) Interest:- Interest is recognized on a time proportion taking into account the amount outstanding and rate applicable.

c) Dividend:- Dividends are accounted for when the right to receive the dividend payment is established.

5. Fixed Assets:

a) Land & Development are valued at cost.

b) Other fixed assets are stated at cost less accumulated depreciation.

c) Additional Depreciation on re-valued asset apportioned to revaluation reserve.

d) The cost of assets comprises its purchase price and any direct cost of bringing the assets to working condition for its intended use and revaluation thereof.

6. Depreciation:

a) The depreciation on the fixed assets has been provided on Straight Line Method on pro-rata basis in accordance with the rates prescribed as per Schedule XIV to the Companies Act, 1956.

b) Depreciation on re-valued assets is calculated on straight-line method at the rates prescribed under Schedule XIV of the Companies Act, 1956. The difference between depreciation on assets based on revaluation and that on original cost is transferred from Revaluation Reserve to profit & loss account.

7. Impairment of Assets:- The Company assesses at each Balance Sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of cash generating unit to which asset is belongs is less than its carrying amount, impairment provision is created to bring down the carrying value to its recoverable amount. The reduction is treated as an impairment loss and is recognised in Profit and Loss Account. If at Balance Sheet date there is an indication that if a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and impairment provision created earlier is reversed to bring it at the recoverable amount subject to a maximum of depreciated historical cost.

8. Investments:- Investments are classified into current and long term investment. Current investments are stated at the lower of cost and fair value. Long term investments are stated at cost. A provision for diminution is made to recognise a decline, other that temporary, in the value of long term investments.

9. Deferred Revenue Expenditure is written off over a period of 10 years for old balances and 5 years for new expenses incurred from FY 2008-2009.

10. Inventories:-

Inventories are valued as under:

i. Raw material, Stores & Spares are valued at lower of cost (on FIFO basis) or net realisable value which ever is lower.

ii. Work in Process at cost including related overheads.

iii. Finished Goods are valued at cost or estimated realisable value which ever is lower. Cost comprises material, labour and applicable overhead expenses.

The valuation is in accordance with the accounting standard issued by the Institute of Chartered Accountants of India.

11. Income Tax:- Provision for income tax is made on the basis of estimated taxable income as calculated by the management.

12. Foreign Currency Transactions:- The transactions in foreign currency are accounted for at the exchange rate prevailing at the date of the transactions. Exchange differences arising on foreign currency transactions settled during the year are recognised in Profit and Loss Account.

Monetary assets and liabilities denominated in foreign currencies as at Balance Sheet date, not covered by forward exchange contacts, are translated at the end rate. The resulted exchange differences are recognised in Profit and Loss Account. Non-monetary assets are recorded at the rates prevailing on the date of transactions.

13. Borrowing costs:- Borrowing cost that is attributable to the acquisition, construction or productions of qualifying assets are capitalises as part of the cost of such assets. All other borrowing costs are recognised as an expense in the period, which they are incurred.

14. Deferred Tax:- The company is recognising the deferred tax assets and deferred tax liability on timing difference arising between tax profits and book profits according to AS-22 "Accounting of Taxes on Income" issued by the Institute of Chartered Accountants of India at prevailing rate of Income Tax Act, 1961.

15. Earnings Per Share:- The basic earnings per share (EPS) is computed by dividing the net profit after tax for the year by the weighted average number of equity shares outstanding during the year.

16. Provisions, Contingent Liabilities and Contingent Assets:-

Provisions are recognised for liabilities that can be measured only by using a substantial degree of estimation, if :

a) The company has present obligation as a result of a past event,

b) A probable outflow of resources is expected to settle the obligation and

c) The amount of obligation can be reliably estimated

Reimbursement expected in respect of expenditure required to settle a provision is recognised only when it is virtually certain that reimbursement will be received.

Contingent Liability is disclosed in the case of :

a) A present obligation arising from past event, when it is not probable that an outflow of resources will be required to settle the obligation

b) A possible obligation, unless the probability of outflow of resources is remote.

Contingent Assets are neither recognised nor disclosed. Provisions, Contingent Liabilities and Contingent Assets are reviewed at each Balance Sheet Date.


Mar 31, 2013

1. Presentation and Disclosure of Financial Statements:- From financial year 2011-2012 onwards, the revise schedule VI notified under the companies act 1956 has become applicable to the company, for preparation & presentation of its financial statements. The adoption of revised schedule VI does not impact recognition & measurement principals followed for preparation of financial statements. However it has significant impact on presentation & disclosures made in the financial statements. The company has also re-classified the previous year figure in accordance with the requirements applicable in the current year.

2. Use of Estimates:- The preparation of financial statements is in conformity with the generally accepted accounting principles (GAAP) requires estimates & assumptions to be made that affect the reportable amount of assets & liabilities on the date of financial statements and the reportable amount of revenue and expenses during the reporting period. Difference between the actual results and estimates are recognized in the year in which the results are known/ materialized.

3. Method of Accounting: The Company maintains its accounts on accrual basis following the historical cost convention in accordance with applicable mandatory Accounting Standards issued by the Institute of Chartered Accountants ofIndia and relevant provisions ofthe Companies Act, 1956.

4. Revenue Recognition:

a) Sale:- The Company recognises sale of goods on transfer of significant risks and rewards of ownership to the customers. Sales (Gross) are inclusive of excise duty and net off trade discounts and sales return, wherever applicable.

b) Interest:- Interest is recognized on a time proportion taking into account the amount outstanding and rate applicable.

c) Dividend:- Dividends are accounted for when the right to receive the dividend payment is established.

5. Fixed Assets:

a) Land & Development are valued at cost.

b) Other fixed assets are stated at cost less accumulated depreciation.

c) Additional Depreciation on re-valued asset apportioned to revaluation reserve.

d) The cost of assets comprises its purchase price and any direct cost of bringing the assets to working condition for its intended use and revaluation thereof.

6. Depreciation:

a) The depreciation on the fixed assets has been provided on Straight Line Method on pro-rata basis in accordance with the rates prescribed as per Schedule XIV to the Companies Act, 1956.

b) Depreciation on re-valued assets is calculated on straight-line method at the rates prescribed under Schedule XIV ofthe Companies Act, 1956. The difference between depreciation on assets based on revaluation and that on original cost is transferred from Revaluation Reserve to profit & loss account.

7. Impairment of Assets: The Company assesses at each Balance Sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of cash generating unit to which asset is belongs is less than its carrying amount, impairment provision is created to bring down the carrying value to its recoverable amount. The reduction is treated as an impairment loss and is recognised in Profit and Loss Account. If at Balance Sheet date there is an indication that if a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and impairment provision created earlier is reversed to bring it at the recoverable amount subject to a maximum of depreciated historical cost.

8. Investments: Investments are classified into current and long term investment. Current investments are stated at the lower of cost and fair value. Long term investments are stated at cost. A provision for diminution is made to recognise a decline, other that temporary, in the value oflong term investments.

9. Deferred Revenue Expenditure is written off over a period of 10 years for old balances and 5 years for new expenses incurred from FY 2008-2009.

10. Inventories:-

Inventories are valued as under:

i. Raw material, Stores & Spares are valued at lower of cost (on FIFO basis) or net realisable value which ever is lower.

ii. Work in Process at cost including related overheads.

iii. Finished Goods are valued at cost or estimated realisable value which ever is lower. Cost comprises material, labour and applicable overhead expenses.

The valuation is in accordance with the accounting standard issued by the Institute of Chartered Accountants of India.

11. Income Tax: Provision for income tax is made on the basis of estimated taxable income as calculated by the management.

12. Foreign Currency Transactions: The transactions in foreign currency are accounted for at the exchange rate prevailing at the date ofthe transactions. Exchange differences arising on foreign currency transactions settled during the year are recognised in Profit and Loss Account.

Monetary assets and liabilities denominated in foreign currencies as at Balance Sheet date, not covered by forward exchange contacts, are translated at the end rate. The resulted exchange differences are recognised in Profit and Loss Account. Non-monetary assets are recorded at the rates prevailing on the date of transactions.

13. Borrowing costs: Borrowing cost that is attributable to the acquisition, construction or productions of qualifying assets are capitalises as part of the cost of such assets. All other borrowing costs are recognised as an expense in the period, which they are incurred.

14. Deferred Tax: The company is recognising the deferred tax assets and deferred tax liability on timing difference arising between tax profits and book profits according to AS-22 "Accounting of Taxes on Income" issued by the Institute of Chartered Accountants of India at prevailing rate of Income Tax Act, 1961.

15. Earnings Per Share: The basic earnings per share (EPS) is computed by dividing the net profit after tax for the year by the weighted average number of equity shares outstanding during the year.

16. Provisions, Contingent Liabilities and Contingent Assets:

Provisions are recognised for liabilities that can be measured only by using a substantial degree of estimation, if :

a) The company has present obligation as a result of a past event,

b) A probable outflow of resources is expected to settle the obligation and

c) The amount of obligation can be reliably estimated

Reimbursement expected in respect of expenditure required to settle a provision is recognised only when it is virtually certain that reimbursement will be received.

Contingent Liability is disclosed in the case of :

a) A present obligation arising from past event, when it is not probable that an outflow of resources will be required to settle the obligation

b) A possible obligation, unless the probability of outflow of resources is remote.

Contingent Assets are neither recognised nor disclosed. Provisions, Contingent Liabilities and Contingent Assets are reviewed at each Balance Sheet Date.


Mar 31, 2010

1. Method of Accounting: The Company maintains its accounts on accrual basis following the historical COS) convention in accordance with applicable mandatory Accounting Standards issued by the Institute of Chartered Accountants of India and relevant provisions of the Companies Act. 1956.

2. Revenue Recognition: The Company recognises sale on completion of sale of goods. Sales comprise amounts invoiced for goods sold net of returns and discounts, rebates and sales tax.

3. Fixed Assets:

i. Land & Development are valued at cost.

ii. Other fixed assets are stated at cost less accumulated depreciation. iii. Additional Depreciation on re-valued asset apportioned to revaluation reserve.

iv. The cos; of assets comprises its purchase price and any direct cost of bringing the assets to working condition for sis intended use and revaluation thereof.

4. Depreciation:

a) The depreciation on the fixed assets has been provided on Straight Line Method on pro-rata basis in accordance With the rates prescribed as per Schedule XIV to the Companies Act. 1956.

b) Depreciation on re-valued assets is calculated on straight-line method at the rates prescribed under Schedule XIV of the Companies Act. 1956. The difference between depreciation on assets based on revaluation and that on original cost is transferred from Revaluation Reserve to profit & loss account.

5. Investments: Investments are valued at cost.

6. Deferred Revenue fixpenditure is written off over a period of 10 years for old balances and 5 years for new expenses incurred from FY 2008-2009.

7. Inventories are valued as under:

i. Raw material. Stores & Spares are valued at lower of cost (on FIFO basis) or net realisable value which ever is lower.

ii. Work in Process at cost including related overheads.

iii. Finished Goods are valued at cost or estimated realisable value which ever is lower.

The valuation is in accordance with the accounting standard issued by the Institute of Chartered Accountants of India.

8. Income Tax: Provision for income tax is made on the basis of estimated taxable income as calculated by the management.

9. Foreign Currency Transactions: All foreign currency transactions are accounted at the rates prevailing on the date of transactions. The profit/ loss on account of difference in the exchange rate on the day of sale and receipt are charged to Profit and Loss Account for the period.

10. Excise Duty: Excise Duty paid on goods manufactured by the company and remaining in inventory, is included as part of valuation of finished goods.

11. Borrowing costs: Borrowing cost that is attributable to the acquisition, construction or productions of qualifying assets are capitalises as part of the cost of such assets. All other borrowing costs are recognised as an expense in the period, which they are incurred.

12. Deferred Tax: The company is recognising the deferred tax assets and deferred tax liability on timing difference arising between tax profits and book profits according to AS-22 "Accounting of Taxes on Income" issued by the Institute of Chartered Accountants of India at prevailing rate of Income Tax Act. 1961.

13. Provisions, Contingent Liabilities and Contingent Assets:

Provisions are recognised for liabilities that can be measured only by using a substantial degree of estimation, if:

a) The company has present obligation as a result of a past event,

b) Aprobable outflow of resources is expected to settle the obligation and

c) The amount of obligation can be reliably estimated

Reimbursement expected in respect of expenditure required to settle a provision is recognised only when it is virtually certain that reimbursement will be received.

Contingent Liability is disclosed in the case of;

a) A present obligation arising from past event, when it is not probable that an outflow of resources will be required to settle the obligation

b) Apossible obligation, unless the probability of outflow of resources is remote.

Contingent Assets are neither recognised nor disclosed

Provisions, Contingent Liabilities and Contingent Assets are reviewed at each Balance Sheet Date.

 
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