Home  »  Company  »  Sita Shree Food Prod  »  Quotes  »  Accounting Policy
Enter the first few characters of Company and click 'Go'

Accounting Policies of Sita Shree Food Products Ltd. Company

Mar 31, 2014

A. Basis of Accounting

1. The accounts of the Company are prepared under the historical cost convention and in accordance with applicable accounting principle in India the accounting standard issued by the Institute of Chartered Accountants of India and the relevant provision of the Companies Act 1956. Accounting policies not specifically referred to are consistent with generally accepted accounting principles.

2. The Company follows mercantile system of accounting and recognizes income and expenditure on accrual basis.

3. Sales and Other Operational Activities

Revenue is recognized only when it can be reliably measured and it is reasonable to expect ultimate collection. Interest income is recognized on time proportion basis taking into account the amount outstanding and rate applicable. Thus revenue from sales is recognized at the time of dispatch of goods to customers. Sales other than manufacturing sales are recorded at the time of dispatch and raising the invoice. Sales are shown net of sales return.

b. Inventory

Items of inventories are measured at lower of cost and net realizable value after providing for obsolescence, if any. Cost of inventories comprise of cost of purchase, cost of conversion and other costs including manufacturing overheads incurred in bringing them to their respective present location and condition. Cost of raw materials, stores and spares, packing materials, trading and other products are determined on lower of cost or net realizable value.

c. Cash Flow Statements

Cash flow statement has been prepared by using Indirect Method at per AS-3 issued by the ICAI.

d. Contingencies and Events occurring after the Balance Sheet date.

Accounting for contingencies (gains and losses) arising out of contractual obligations are made only on the basis of mutual acceptances. Events occurring after the date of the Balance Sheet are considered up to the date of approval of the accounts by the Board where material.

e. Prior Period Items & Extra Ordinary Item

Income & Expenses which arises in the Current Year as a result of error or omission in the preparation of Financial Statement of one or more prior period were shown as prior period adjustment during the year in Note No 26 (7) of Notes on financial Statement.

f. Depreciation

Depreciation is provided on the basis of Straight Line method at the rates and in the manner prescribed under Schedule XIV to the Companies Act 1956. Assets of Rs. 28,39,43,178/- are still in work in progress thus depreciation is not required to be provided on the same.

g. Revenue Recognition

Revenue from sales/ weighment service is accounted for as net of taxes and the principle of revenue recognition are given below:

1) Revenue from sales is recognised upon passing of title of the goods and on transit of significant risk and rewards of ownership.

2) Dividend income is recognised on receipt basis.

3) Government Benefit Licence income is also recognized on receipt basis.

h. Fixed Assets

Fixed assets are stated at cost of acquisition, less accumulated depreciation and impairment loss, if any. All costs, including financing costs till commencement of commercial production are capitalized on appropriate basis to the Assets.

i. Foreign Currency Transactions

Company has entered into export sale during the period and thereby earning foreign exchange. Foreign currency transactions are recorded by applying an exchange rate at the time of date of transactions.

j. Investment

Current investments are carried at lower of cost and quoted, faire value, computed category wise. Long term investments are stated at cost. Provision for diminution in the value of long term investments is made only if such a decline is other than temporary.

k. Retirement Benefit

Retirement Benefits to employees for payment of Gratuity is provided for in this year for the employees liable as per Gratuity act thus the profit of current year is reduced by Rs 146971/-. Further contribution in respect of Provident Fund and ESI is made monthly and is charged to the Profit & Loss Account.

1. Borrowing Cost

Borrowing cost which are directly attributable to the acquisition/construction of fixed assets till the time such assets are ready for use are capitalization as part of the assets. Other borrowing cost are treated as revenue expenditure and charged to profit and loss account for the year.

m. Segment Reporting.

The company has identified its primary reportable segments under AS-17 and necessary disclosure is separately made in notes of accounts. The accounting policies adopted for segment report are in line with the accounting policies of the company with the following additional policies for segment reporting:

Revenue and expenses have been identified to a segment on the basis of relationship to operating activities of the segment .Revenue and expenses which relate to enterprise as a whole and are not allocable to a segment on reasonable basis have been disclosed as "Un allocable". Segment assets and segment liabilities represent assets and liabilities in respective segments. Investments tax related assets and other assets and liabilities that can not be allocated to a segment on a reasonable basis have been disclosed as "Un allocable".

n. Related party disclosure.

Related party disclosure as per AS-18 issued by the ICAI is made and disclosed separately in notes to accounts.

o. Earning per Share.

E.P.S. has been calculated on weighted average of total number of share as per AS-20 issued by the ICAI.

p. Provision for Current & Deferred Tax

Tax expenses for the year comprises of current tax and deferred tax. Provision for current tax is made on the basis of provision of Income Tax Act. Deferred tax Liability of Rs. 14511677/- created during the year and total closing balance of deferred tax liability is Rs. 43114141/-

q. Impairment of Assets

The company has a policy of assessing the impairment of intangible assets every year in accordance with AS-28 impairment of assets prescribed by the ICAI. This is done through comparing its carrying amount as per books of accounts with its recoverable value. During the year there was no impairment in the value of the assets; hence no provision is required as per AS-28.

r. Provision of Contingent Liabilities and Contingent Assets

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

s. Other Income

Other Income for the year ended 31st March 2014 includes dividend on investments, Interest on Bank Fixed deposits. Interest on advances, Commodity Profit & Other Income.


Mar 31, 2012

A. Basis of Accounting

1. The accounts of the Company are prepared under the historical cost convention and in accordance with applicable accounting principle in India the accounting standard issued by the Institute of Chartered Accountants of India and the relevant provision of the Companies Act 1956. Accounting policies not specifically referred to are consistent with generally accepted accounting principles.

2. The Company follows mercantile system of accounting and recognizes income and expenditure on accrual basis.

3. Sales and Other Operational Activities

Revenue is recognized only when it can be reliably measured and it is reasonable to expect ultimate collection. Interest income is recognized on time proportion basis taking into account the amount outstanding and rate applicable. Thus revenue from sales is recognized at the time of dispatch of goods to customers. Sales other than manufacturing sales are recorded at the time of dispatch and raising the invoice. Sales are shown net of sales return.

b. Inventory

Items of inventories are measured at lower of cost and net realizable value after providing for obsolescence, if any. Cost of inventories comprise of cost of purchase, cost of conversion and other costs including manufacturing overheads incurred in bringing them to their respective present location and condition. Cost of raw materials, stores and spares, packing materials, trading and other products are determined on lower of cost or net realizable value.

c. Cash Flow Statements

Cash flow statement has been prepared by using Indirect Method at per AS-3 issued by the ICAI.

d. Contingencies and Events occurring after the Balance Sheet date.

Accounting for contingencies (gains and losses) arising out of contractual obligations are made only on the basis of mutual acceptances. Events occurring after the date of the Balance Sheet are considered up to the date of approval of the accounts by the Board where material.

e. Prior Period Items & Extra Ordinary Item

Income & Expenses which arises in the Current Year as a result of error or omission in the preparation of Financial Statement of one or more prior period were shown as prior period adjustment during the year in Note No. 25(d) of Notes on financial Statement.

f. Depreciation

Depreciation is provided on the basis of Straight Line method at the rates and in the manner prescribed under Schedule XIV to the Companies Act 1956. Assets of Rs.155713821/- are still in work in progress thus depreciation is not required to be provided on the same.

g. Revenue Recognition

Revenue from sales/ weighment service is accounted for as net of taxes and the principle of revenue recognition are given below:

1) Revenue from sales is recognised upon passing of title of the goods and on transit of significant risk and rewards of ownership.

2) Dividend income is recognised on receipt basis.

3) Government Benefit Licence income is also recognized on receipt basis.

h. Fixed Assets

Fixed assets are stated at cost of acquisition, less accumulated depreciation and impairment loss, if any. All costs, including financing costs till commencement of commercial

i. Foreign Currency Transactions

Company has entered into export sale during the period and thereby earning foreign exchange. Foreign currency transactions are recorded by applying an exchange rate at the time of date of transactions.

j. Investment

Current investments are carried at lower of cost and quoted, faire value, computed category wise. Long term investments are stated at cost. Provision for diminution in the value of long term investments is made only if such a decline is other than temporary.

k. Retirement Benefit

Retirement Benefits to employees for payment of Gratuity is provided for in this year for the employees liable as per Gratuity act thus the profit of current year is reduced by Rs 65481/- . Further contribution in respect of Provident Fund and ESI is made monthly and is charged to the Profit & Loss Account.

l. Borrowing Cost

Borrowing cost which are directly attributable to the acquisition/construction of fixed assets till the time such assets are ready for use are capitalization as part of the assets. Other borrowing cost are treated as revenue expenditure and charged to profit and loss account for the year.

m. Segment Reporting.

The company has identified its primary reportable segments under AS-17 and necessary disclosure is separately made in notes of accounts. The accounting policies adopted for segment report are in line with the accounting policies of the company with the following additional policies for segment reporting:

Revenue and expenses have been identified to a segment on the basis of relationship to operating activities of the segment .Revenue and expenses which relate to enterprise as a whole and are not allocable to a segment on reasonable basis have been disclosed as "Un allocable". Segment assets and segment liabilities represent assets and liabilities in respective segments. Investments tax related assets and other assets and liabilities that can not be allocated to a segment on a reasonable basis have been disclosed as "Un allocable".

n. Related party disclosure.

Related party disclosure as per AS-18 issued by the ICAI is made and disclosed separately in notes to accounts.

o. Earning per Share.

E.P.S. has been calculated on weighted average of total number of share (which is same in whole year) as per AS-20 issued by the ICAI. There are no securities which will be converted in Equity share so diluted and basic EPS are the same.

p. Provision for Current & Deferred Tax

Tax expenses for the year comprises of current tax and deferred tax. Provision for current tax is made on the basis of provision of Income Tax Act. Deferred tax asset is not recognized for future tax consequences of timing differences because there is virtual convincing evidence for future taxable income. It is measured using enacted tax rates and tax laws applicable to taxable income of the current year. Deferred tax asset is recognized and carried forward only to the extent that there is a virtual certainty that the asset will be realized in future.

q. Impairment of Assets

The company has a policy of assessing the impairment of intangible assets every year in accordance with AS-28 impairment of assets prescribed by the ICAI. This is done through comparing its carrying amount as per books of accounts with its recoverable value. During the year there was no impairment in the value of the assets; hence no provision is required as per AS-28.

r. Provision Contingent Liabilities and Contingent Assets

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

s. Other Income

Other Income for the year ended 31st March 2012 includes dividend on investments Interest on Bank Fixed deposits and interest on advances etc.


Mar 31, 2010

A. Basis of Accounting

1. The accounts of the Company are prepared under the historical cost convention and in accordance with applicable accounting principle in India the accounting standard issued by the Institute of Chartered Accountants of India and the relevant provision of the Companies Act 1956. Accounting policies not specifically referred to are consistent with generally accepted accounting principles.

2. The Company follows mercantile system of accounting and recognizes income and expenditure on accrual basis.

3. Sales and Other Operational Activities

Revenue from sales is recognized at the time of dispatch of goods to customers. Sales other than manufacturing sales are shown as trading sales separately. Sales are shown net of sales return.

b. Valuation of Inventory

1. Closing stock of semi finished goods is valued at cost of material plus conversion cost to the stage of completion. Finished goods are valued at cost or net realizable value which ever is lower.

2. Closing stock of packing material stores and raw material are valued at cost or net realizable value which ever is less.

c. Cash Flow Statements

Cash flow statement has been prepared by using Indirect Method at per AS-3 issued by the ICAI.

d. Contingencies and Events occurring after the Balance Sheet date.

Accounting for contingencies (gains and losses) arising out of contractual obligations are made only on the basis of mutual acceptances. Events occurring after the date of the Balance Sheet are considered up to the date of approval of the accounts by the Board where material.

e. Prior Period Items & Extra Ordinary Item

Income & Expenses which arises in the Current Year as a result of error or omission in the preparation of Financial Statement of one or more prior period were shown as prior period adjustment during the year. Delay payment of Statutory Liabilities Rs.65520/- and other expenses of Rs.375263/- related to prior period are shown under the prior period items.

f. Depreciation

Depreciation is provided on the basis of Straight Line method at the rates and in the manner prescribed under Schedule XIV to the Companies Act 1956. Assets of Rs.33128518/- are still in work in progress thus depreciation is not required to be provided on the same.

g. Revenue Recognition

Revenue from sales/ weighment service is accounted for as net of taxes and the principle of revenue recognition are given below:

1) Revenue from sales is recognised upon passing of title of the goods and on transit of significant risk and rewards of ownership.

2) Dividend income is recognised on receipt basis.

3) Government Benefit Licence income is also recognized on receipt basis.

h. Fixed Assets s

Fixed assets are stated at cost of acquisition or construction. They are stated at historical cost less accumulated depreciation.

i. Foreign Currency Transactions

Company has entered into export sale during the period and thereby earning foreign exchange. Foreign currency transactions are recorded by applying an exchange rate at the time of date of transactions.

j. Investment

Investments are long term investment and same are stated at their acquisition cost.

k. Retirement Benefit

Retirement Benefits to employees for payment of Gratuity is provided for in this year for the employees liable as per Gratuity act thus the profit of current year is reduced by Rs 57116/-. Further contribution in respect of Provident Fund and ESI is made monthly and is charged to the Profit & Loss Account.

l. Borrowing Cost

Borrowing cost which are directly attributable to the acquisition/construction of fixed assets till the time such assets are ready for use are capitalization as part of the assets. Other borrowing cost are treated as revenue expenditure and charged to profit and loss account for the year.

m. Segment Reporting.

The company has identified its primary reportable segments under AS-17 and necessary disclosure is separately made in notes of accounts. The accounting policies adopted for segment report are in line with the accounting policies of the company with the following additional policies for segment reporting: Revenue and expenses have been identified to a segment on the basis of relationship to operating activities of the segment .Revenue and expenses which relate to enterprise as a whole and are not allocable to a segment on reasonable basis have been disclosed as "Un allocable". Segment assets and segment liabilities represents assets and liabilities in respective segments. Investments tax related assets and other assets and liabilities that cannot be allocated to a segment on a reasonable basis have been disclosed as "Un allocable".

n. Related party disclosure.

Related party disclosure as per AS-18 issued by the ICAI is made and disclosed separately in notes to accounts.

o. Earning per Share.

E.P.S. has been calculated on weighted average of total number of share (which is same in whole year) as per AS-20 issued by the ICAI. There are no securities which will be converted in Equity share so diluted and basic EPS are the same.

p. Income Tax

Tax expenses for the year comprises of current tax and deferred tax. Provision for current tax is made on the basis of provision of Income Tax Act. Deferred tax asset is not recognized for future tax consequences of timing differences because there is virtual convincing evidence for future taxable income. It is measured using enacted tax rates and tax laws applicable to taxable income of the current year.

q. Miscellaneous Expenditure

Miscellaneous Expenditure to the extent not written off pertaining to public issue expenses is of Rs 244867121- which shall be amortized over a period of 5 years after the commencement of new project. A sum of Rs. 1575000/- in the current year has been transferred to Deposit a/c from miscellaneous expenditure, which is originally the part of deposit with BSE and had been transferred to miscellaneous expenditure in previous year.

r. Impairment of Assets

The company has a policy of assessing the impairment of intangible assets every year in accordance with AS-28 impairment of assets prescribed by the ICAI. This is done through comparing its carrying amount as per books of accounts with its recoverable value. During the year there was no impairment in the value ofthe assets;hencenoprovisionisrequiredasperAS-28.

s. Provision Contingent Liabilities and Contingent Assets

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

t. Other Income

Other Income for the year ended 31st March 2010 includes dividend on investments Interest on Bank Fixed deposits and interest on advances etc.

 
Subscribe now to get personal finance updates in your inbox!