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Accounting Policies of Sarang Chemicals Ltd. Company

Mar 31, 2010

1. Accounting Standards

1.1 AS-1 Disclosure of accounting policies

The accounts are maintained on accrual basis as a going concern.

1.2 AS-2 Valuation of inventories

There being no inventory, not applicable.

1.3 As-3 Cash flow statements

The cash flow statement is prepared under "Indirect method" and the same is annexed.

1.4 AS - 5 There being no prior period item, not applicable

1.5 AS - 6 There being no fixed assets, the matter relating to depreciation not applicable

1.6 AS - 9 Revenue recognition I Provision for Expenses

1.6.1 The income of the company is the Profit from the sale of Shares (investments) purchased in earlier year/s.

The Company had investments in shares of various Companies. During the year also further amounts have been invested in shares of various Companies, as per Schedule No.4. All such companies are unlisted and no dividend has been declared and received by the Company, there is no revenue / income.

1.6.2 The Company has taken the Loan from a Co-op Bank as shown in Schedule -2. Due to non payment of Loan amount and interest there on, the said I6an account has been treated as N.P. Account and hence no Interest has been charged by the bank after 31.03.08 and accordingly the company has also not provided the interest payable on the said loan for the year.

However, during the year the said bank has sold the property of ex-director, which was the security with the bank. The Bank has credited a sum of Rs. 30,600/- proportionately, as the said property was also the co-security for other loans.

1.6.3 The revenue and expenditure are accounted on a going concern basis.

1.7 AS - 10 Accounting for fixed assets

There being no fixed assets this matter is not applicable

1.8 AS - 11 Accounting for effects in foreign exchange rates

There being no business relating to the transaction in foreign exchange, not applicable fixed assets this matter is not applicable.

1.9 AS - 13 Accounting for investments

Investments are valued at cost which has been actually paid (cost and the share premium) to the respective companies. In the opinion of the management the said Investments have been made with an intention to get the benefit from the dividend as well-as increase in value of those shares. As all such Investments are in the shares of those respective companies, which are un-listed, and thus it is not possible to workout the market value or the book value based on the value of assets of the company.

1.10 AS-15 Accounting for retirement benefits

Retirement benefits will be provided on cash basis. However the matter relating to « provident fund & E.S.I, are not applicable in the current financial yeaf.

1.11 AS - 16 Borrowing cost

The company has borrowed Secured Loan from a Co-op Bank. With regard to Provision for interest on such Loan, please refer to para 1.6.3.

1.12 AS- 18 Related party disclosure

There are no transaction requiring Disclosure under the Standard issued by the Institute of Chartered Accountants of India.

1.13 AS- 19 Leases

This matter is not applicable.

1.14 AS -20 Earnings per share -

The Face value of the share is Re. 1/- and the Earning per share is calculated on the same. There is no issue which will dilute the earning on the share. The EPS is negligible compare to its Share capital so the same is not disclosed.

1.15 AS-21 Consolidated financial statements

There being no subsidy, this matter is not applicable.

116 AS-22 Accounting for taxes on income

Current tax is determined as the amount of tax payable as per the provisions of Income Tax Act, 1961.

1.17 AS-26 Accounting for intangible assets

During the year the company, the company has, as per the practice followed by Ihe company, 1 /10 of such expenditure has been debited to profit & loss account.

1.18 AS-29 Contingent Liability & Contingent Assets ;-

As on 31-03-2010 Rs. NIL (P.Y. Rs. NIL)

2. Loans and advances - Rs. 9,52,68,500 /- includes: -

2.1 Loans to companies:

2.1.1 Rs. 78,48,000/- Amounts given up to last year;

2.1.2 Rs. 3,72,00,500/- Amounts given during the year.

2.2 Loans to others :

2.2.1 Rs. 3,45,000/- Amounts given up to last year;

2.1.2 Rs. 5,02,20,000/- Amounts given during the year.

All the above loan amounts have been given for the business purpose/outstanding for business transaction only, and hence they are non-bearing interest. The repayment schedules have not been fixed up & they all are subject to balance confirmations. In the opinion of management they are good of recovery.


Mar 31, 2009

1. Accounting Standards

(a)AS - 1 Disclosure of accounting policies

The accounts are maintained on accrual basis as a going concern.

(b)AS-2 Valuation of inventories

There being no inventory, not applicable.

(c)AS - 3 Cash flow statements

The cash flow statement is prepared under "Indirect method" and the same is annexed.

(d)AS - 5 There being no prior period item, not applicable

(e)AS - 6 There being no fixed assets, the matter relating to depreciation not applicable

(f)AS - 9 Revenue recognition / Provision for Expenses

1. The income of the company is the Profit from the Trading of Shares in which the Company has dealt with during the year.

2. The Company has during the year invested the funds in Shares of various Companies, who are unlisted and no dividend has been declared and received by the Company, there is revenue income. The same will be accounted as & when received.

3. The Company has taken the Loan from a Co-op Bank as shown in Schedule -2. Due to non payment of Loan amount and interest there on, the said loan account has been treated as N.P. Account and hence no Interest has been charges by the bank after 31.03.08 and accordingly the company has also not provided the interest payable on the said loan for the period from 1.06.2008 to 31.03.2009.

The revenue and expenditure are accounted on a going concern basis.

(g)AS - 10 Accounting for fixed assets

There being no fixed assets this matter is not applicable

(h)AS - 11 Accounting for effects in foreign exchange rates

There being no business relating to the transaction in foreign exchange, not applicable fixed assets this matter is not applicable.

(i)AS - 13 Accounting for investments

Investments are valued at cost which has been actually paid ( cost and the share premium) to the respective company. In the opinion by the management the said Investments have been made with an intention to get the benefit from the dividend as well as increase in value of those shares. As all such Investments are in the shares of those respective companies, which are un- listed, and thus it is not possible to workout the market value or the book value based on the value of assets of the company.

(k)AS-15 Accounting for retirement benefits

Retirement benefits will be provided on cash basis. However the matter relating to provident fund & E.S.I, are not applicable in the current financial year.

(l)AS - 16 Borrowing cost

The company has borrowed Secured Loan from a Co-op Bank. With regard to Provision for interest on such Loan please refer to para (iii-c) any money this matter is not applicable

(m)AS - 17 Segment reporting

The company operates in only one segment viz., Bio fertilizers. Hence the Accounting Standard on Segment reporting (AS - 17) is not applicable.

(n)AS - 18 Related party disclosure

There are no transaction requiring Disclosure under the Standard issued by the Institute of Chartered Accountants of India.

(o)AS-19 Leases

This matter is not applicable.

(p)AS - 20 Earnings per share

The Face value of the share is Re. 1 /- and the Earning per share is calculated on the same. There is no issue which will dilute the earning on the share. The EPS is negligible compare to its Share capital so the same is not disclosed.

(q)AS - 21 Consolidated financial statements

There being no subsidy, this matter is not applicable.

(r)AS - 22 Accounting for taxes on income

Current tax is determined as the amount of tax payable in respect of taxable income for the period. Considering the negligible amount of deferred tax liability and asset the same is not provided.

(s)AS - 26 Accounting for intangible assets

During the year the company, the company has spent sum of Rs. 432831 for the increase in paid up share capital, Which have been debited to preliminary expenses, and as per the practice followed by the company, 1/10 of such expenditure has been debited to profit & loss account.

AS -29 Provision, contingent Liability & Contingent Assets ;- As on 31-03-2009 Rs. NIL(P.Y. Rs. NIL)

 
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