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Accounting Policies of Thiru Arooran Sugars Ltd. Company

Mar 31, 2015

General

The accompanying Financial Statements have been prepared on the Historical Cost Convention.

Fixed Assets & Depreciation

Till last year Fixed assets other than assets of Distillery and Sugar machinery were being depreciated on Written Down Value method. From this year onwards all the fixed assets have been depreciated on Straight line method. Consequent to the notification of Schedule II of the companies Act 2013 effective 01.04.2014, the company has estimated the useful life of the fixed assets based on technical evaluation and on the basis of such evaluation the useful life of Factory Buildings and Plant and Machinery is longer than the useful life specified in Schedule II. The unamortized value of fixed assets as at 01.04.2014 has been depreciated over the remaining useful life. The unamortized value of the fixed assets whose useful life has expired by 31.03.2014, has been reduced from the surplus as at 01.04.2014.

Investments

Investments are stated at Cost. The diminution in the market value of such investments is not recognised unless such diminution is considered permanent.

Modvat credit on Capital Goods

Modvat credit on capital goods is calculated and accounted for by way of diminution in the value of the concerned capital goods.

Valuation of Inventories

* Stores and Sundry Stocks, Fertilizers and Insecticides, Bought out Raw Materials and Stock-in- process are valued at lower of cost or net realisable value.

* By products are valued at estimated realisable value.

* Tools and Implements and Crops under cultivation are valued at lower of cost or net realisable value.

* Paddy is valued at selling rates.

* Finished goods are valued at lower of cost or estimated realisable value and are inclusive of appropriate Excise Duty.

* Cost of finished goods and work in progress includes cost of conversion and other costs incurred in bringing the inventories to the present location and condition. The cost of energy from Terra Energy Limited under a barter arrangement by supply of bagasse has been considered as part of conversion and, hence, included in the value of inventory.

Foreign currency transactions

A) Transactions denominated in foreign currency are recorded at the exchange rate prevailing on the date of transaction. Any income or expense on account of exchange difference is recognised in the profit and loss account.

B) Derivative transactions are considered as off-Balance Sheet items and cash flows arising there from are recognized in the Books of Accounts as and when the settlement take place in accordance with the terms of respective contracts.

Income and Expenditure Recognition

* Income is recognised and expenditure is accounted for on their accrual.

* Under the barter agreement with the subsidiary company, Terra Energy Limited, Bagasse is supplied in exchange for Steam and Power received within the agreed norms. Consequently, no entries are passed in financial books for the value of Power and Steam received within the agreed norms and utilised for the sugar division operations of the Company. However steam is charged at cost for consumption by sugar division more than the agreed norms and for steam utilised for activities other than cane crushing operations of the Sugar division. Similar method is adopted in respect of power supplied by Terra Energy Limited.

Borrowing Costs

Borrowing costs that are attributable to the acquisition of or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial time to get ready for its intended use. All other borrowing costs are charged to revenue.

Employee Benefits

a) Short Term Employee Benefits

Short term Employee Benefits are charged at the undiscounted amount to Statement of Profit and loss in the year in which related service is rendered.

b) Defined Contribution Plan

Contribution to defined contribution schemes towards retirement benefit in the form of provident fund and superannuation fund for the year are charged to profit and loss account as incurred.

c) Defined Benefit Plan

Liabilities in respect of defined benefit plans are determined based on actuarial valuation made by an independent actuary using projected unit credit method as at the balance sheet date. Actuarial gains or losses are recognized immediately in the profit and loss account.

Terminal benefits are recognized as expenses as and when incurred.

Impairment of Fixed Assets

Consideration is given at each Balance Sheet date to determine whether there is any indication of impairment on the carrying amount of the Company's fixed assets. If any such indication exists, an asset's recoverable amount is estimated. Impairment loss is recognized whenever the carrying amount of an asset exceeds recoverable amount.




Mar 31, 2014

General

The accompanying Financial Statements have been prepared on the Historical Cost Convention.

Fixed Assets & Depreciation

Fixed Assets of the Distillery Unit and Sugar Machinery are depreciated on Straight Line Method. Other Assets are depreciated on the written down value method in accordance with the provisions of the Companies Act, 1956.

Investments

Investments are stated at Cost. The diminution in the market value of such investments is not recognised unless such diminution is considered permanent.

Modvat credit on Capital Goods

Modvat credit on capital goods is calculated and accounted for by way of diminution in the value of the concerned capital goods.

Valuation of Inventories

* Stores and Sundry Stocks, Fertilizers and Insecticides, Bought out Raw Materials and Stock-in- process are valued at lower of cost or net realisable value.

* By products are valued at estimated realisable value.

* Tools and Implements and Crops under cultivation are valued at lower of cost or net realisable value.

* Paddy is valued at selling rates.

* Finished goods are valued at lower of cost or estimated realisable value and are inclusive of appropriate Excise Duty.

* Cost of finished goods and work in progress includes cost of conversion and other costs incurred in bringing the inventories to the present location and condition. The cost of energy from Terra Energy Limited under a barter arrangement by supply of bagasse has been considered as part of conversion and, hence, included in the value of inventory.

Foreign currency transactions

A) Transactions denominated in foreign currency are recorded at the exchange rate prevailing on the date of transaction. Any income or expense on account of exchange difference is recognised in the Profit and Loss account.

B) Derivative transactions are considered as off-Balance Sheet items and cash flows arising there from are recognized in the Books of Accounts as and when the settlement take place in accordance with the terms of respective contracts.

Income and Expenditure Recognition

* Income is recognised and expenditure is accounted for on their accrual.

* Under the barter agreement with the subsidiary company, Terra Energy Limited, Bagasse is supplied in exchange for Steam and Power received within the agreed norms. Consequently, no entries are passed in financial books for the value of Power and Steam received within the agreed norms and utilised for the sugar division operations of the Company. However steam is charged at cost for consumption by sugar division more than the agreed norms and for steam utilised for activities other than cane crushing operations of the Sugar division. Similar method is adopted in respect of power supplied by Terra Energy Limited.

Borrowing Costs

Borrowing costs that are attributable to the acquisition of or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial time to get ready for its intended use. All other borrowing costs are charged to revenue.

Employee Benefits

a) Short Term Employee Benefits

Short term Employee Benefits are charged at the undiscounted amount to Statement of Profit and Loss in the year in which related service is rendered.

b) Defined Contribution Plan

Contribution to defined contribution schemes towards retirement benefit in the form of Provident Fund and Superannuation Fund for the year are charged to Profit and Loss Account as incurred.

c) Defined Benefit Plan

Liabilities in respect of defined benefit plans are determined based on actuarial valuation made by an independent Actuary using projected unit credit method as at the Balance Sheet date. Actuarial gains or losses are recognized immediately in the Profit and Loss Account.

Terminal benefits are recognized as expenses as and when incurred.

Impairment of Fixed Assets

Consideration is given at each Balance Sheet date to determine whether there is any indication of impairment on the carrying amount of the Company''s Fixed Assets. If any such indication exists, an asset''s recoverable amount is estimated. Impairment loss is recognized whenever the carrying amount of an asset exceeds recoverable amount.


Mar 31, 2013

General

The accompanying Financial Statements have been prepared on the Historical Cost Convention.

Fixed Assets & Depreciation

Fixed Assets of the Distillery and Sugar Machinery are depreciated on Straight Line Method. Other Assets are depreciated on the written down value method in accordance with the provisions of the Companies Act,1956.

Investments

Investments are stated at Cost. The diminution in the market value of such investments is not recognised unless such diminution is considered permanent.

Modvat credit on Capital Goods

Modvat credit on capital goods is calculated and accounted for by way of diminution in the value of the concerned capital goods.

Valuation of Inventories

- Stores and Sundry Stocks, Fertilizers and Insecticides, Bought out Raw Materials and Stock-in- process are valued at lower of cost or net realisable value.

- By products are valued at estimated realisable value.

- Tools and Implements and Crops under cultivation are valued at lower of cost or net realisable value.

- Paddy is valued at selling rates.

- Finished goods are valued at lower of cost or estimated realisable value and are inclusive of appropriate Excise Duty.

- Cost of finished goods and work in progress includes cost of conversion and other costs incurred in bringing the inventories to the present location and condition. The cost of energy from Terra Energy Limited under a barter arrangement by supply of bagasse has been considered as part of conversion and, hence, included in the value of inventory.

Foreign currency transactions

A) Transactions denominated in foreign currency are recorded at the exchange rate prevailing on the date of transaction. Any income or expense on account of exchange difference is recognised in the profit and loss account.

B) Derivative transactions are considered as off-Balance Sheet items and cash flows arising there from are recognized in the Books of Accounts as and when the settlement take place in accordance with the terms of respective contracts.

Income and Expenditure Recognition

- Income is recognised and expenditure is accounted for on their accrual.

- Under the barter agreement with the subsidiary company, Terra Energy Limited, Bagasse is supplied in exchange for Steam and Power received within the agreed norms. Consequently, no entries are passed in financial books for the value of Power and Steam received within the agreed norms and utilised for the sugar division operations of the Company. However steam is charged at cost for consumption by sugar division more than the agreed norms and for steam utilised for activities other than cane crushing operations of the Sugar division. Similar method is adopted in respect of power supplied by Terra Energy Limited.

Borrowing Costs

Borrowing costs that are attributable to the acquisition of or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial time to get ready for its intended use. All other borrowing costs are charged to revenue.

Employee Benefits

a) Short Term Employee Benefits

Short term Employee Benefits are charged at the undiscounted amount to Statement of Profit and Loss in the year in which related service is rendered.

b) Defined Contribution Plan

Contribution to defined contribution schemes towards retirement benefit in the form of Provident Fund and Superannuation Fund for the year are charged to Profit and Loss Account as incurred.

c) Defined Benefit Plan

Liabilities in respect of defined benefit plans are determined based on actuarial valuation made by an independent actuary using projected unit credit method as at the Balance Sheet date. Actuarial gains or losses are recognized immediately in the Profit and Loss Account.

Terminal benefits are recognized as expenses as and when incurred.

Impairment of Fixed Assets

Consideration is given at each Balance Sheet date to determine whether there is any indication of impairment on the carrying amount of the Company''s Fixed Assets. If any such indication exists, an asset''s recoverable amount is estimated. Impairment loss is recognized whenever the carrying amount of an asset exceeds recoverable amount.


Mar 31, 2012

1. Defined Contribution Plans

Contribution of Rs.15.77 million to defined contribution plans is recognized as expense and included in the employees cost in the Profit and Loss Account.

General

The accompanying Financial Statements have been prepared on the Historical Cost Convention.

Fixed Assets & Depreciation

Fixed Assets of the Distillery and Sugar Machinery are depreciated on Straight Line Method. Other Assets are depreciated on the Written Down Value method in accordance with the provisions of the Companies Act,1956.

Investments

Investments are stated at Cost. The diminution in the market value of such investments is not recognised unless such diminution is considered permanent.

Modvat credit on Capital Quads

Modvat credit on capital goods is calculated and accounted for by way of diminution in the value of the concerned capital goods. Valuation of Inventories

- Stores and Sundry Stocks, Fertilizers and Insecticides, Bought out Raw Materials and Stock-in-process are valued at lower of cost or net realisable value

- By-products are valued at estimated realisable value

- Tools and Implements and Crops under cultivation are valued at lower of cost or net realisable value

- Paddy is valued at selling rates

- Finished goods are valued at lower of cost or estimated realisable value and are inclusive of appropriate Excise Duty

- Cost of finished goods and work in progress includes cost of conversion and other costs incurred in bringing the inventories to the present location and condition. The cost of energy from Terra Energy Limited under a Barter arrangement by supply of bagasse has been considered as part of conversion and, hence, included in the value of inventory

Foreign currency transactions

A) Transactions denominated in foreign currency are recorded at the exchange rate prevailing on the date of transaction. Any income or expense on account of exchange difference is recognised in the Profit and Loss Account.

B) Derivative transactions are considered as off-Balance Sheet items and cash flows arising there from are recognized in the Books of Accounts as and when the settlement take place in accordance with the terms of respective contracts.

Income and Expenditure Recognition

- Income is recognised and expenditure is accounted for on their accrual.

- Under the barter agreement with the subsidiary company, Terra Energy Limited, Bagasse is supplied in exchange for Steam and Power received within the agreed norms. Consequently, no entries are passed in financial books for the value of Power and Steam received within the agreed norms and utilised for the Sugar Division operations of the Company. However steam is charged at cost for consumption by Sugar Division more than the agreed norms and for steam utilised for activities other than cane crushing operations of the Sugar Division. Similar method is adopted in respect of power supplied by Terra Energy Limited.

Borrowing Costs

Borrowing costs that are attributable to the acquisition of or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial time to get ready for its intended use. All other borrowing costs are charged to revenue.

Employee Benefits

a) Short Term Employee Benefits

Short term Employee Benefits are charged at the undiscounted amount to Profit and Loss Account in the year in which related service is rendered.

b) Defined Contribution Plan

Contribution to defined contribution schemes towards retirement benefit in the form of Provident Fund and Superannuation Fund for the year are charged to Profit and Loss Account as incurred.

c) Defined Benefit Plan

Liabilities in respect of defined benefit plans are determined based on actuarial valuation made by an independent actuary using projected unit credit method as at the Balance Sheet date. Actuarial gains or losses are recognized immediately in the Profit and Loss Account.

Terminal benefits are recognized as expenses as and when incurred.

Impairment of Fixed Assets

Consideration is given at each Balance Sheet date to determine whether there is any indication of impairment on the carrying amount of the Company's Fixed Assets. If any such indication exists, an asset's recoverable amount is estimated. An impairment loss is recognized whenever the carrying amount of an asset exceeds recoverable amount.


Dec 31, 2010

General

The accompanying Financial Statements have been prepared on the Historical Cost Convention.

Fixed Assets & Depreciation

Fixed Assets of the Distillery and Sugar machinery are depreciated on Straight Line Method. Other Assets are depreciated on the Written Down Value method in accordance with the provisions of the Companies Act,1956.

Investments

Investments are stated at Cost. The diminution in the market value of such investments is not recognised unless such diminution is considered permanent.

Modvat credit on Capital Qoods

Modvat credit on capital goods is calculated and accounted for by way of diminution in the value of the concerned capital goods.

Valuation of Inventories

- Stores and Sundry Stocks, Fertilizers and Insecticides, Bought out Raw Materials and Stock-in-process are valued at lower of cost or net realisable value.

- By products are valued at estimated realisable value.

- Tools and Implements and Crops under cultivation are valued at lower of cost or net realisable value.

- Paddy is valued at selling rates.

- Finished goods are valued at lower of cost or estimated realisable value and are inclusive of appropriate Excise Duty.

- Cost of finished goods and work in progress includes cost of conversion and other costs incurred in bringing the inventories to the present location and condition. The cost of energy from Terra Energy Limited under a barter arrangement by supply of bagasse has been considered as part of conversion and, hence, included in the value of inventory.

Foreign currency transactions

a) Transactions denominated in foreign currency are recorded at the exchange rate prevailing on the date of transaction .Any income or expense on account of exchange difference is recognised in the profit and loss account.

b) Derivative transactions are considered as off-Balance Sheet items and cash flows arising there from are recognized in the Books of Accounts as and when the settlement take place in accordance with the terms of respective contracts.

Income and Expenditure Recognition

- Income is recognised and expenditure is accounted for on their accrual.

- Under the barter agreement with the subsidiary company, Terra Energy Limited, Bagasse is supplied in exchange for Steam and Power received within the agreed norms. Consequently, no entries are passed in financial books for the value of Power and Steam received within the agreed norms and utilised for the sugar division operations of the Company. However steam is charged at cost for consumption by sugar division more than the agreed norms and for steam utilised for activities other than cane crushing operations of the Sugar division. Similar method is adopted in respect of power supplied by Terra Energy Limited.

Borrowing Costs

Borrowing costs that are attributable to the acquisition of or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial time to get ready for its intended use. All other borrowing costs are charged to revenue.

Employee Benefits

a) Short Term Employee Benefits

Short term Employee Benefits are charged at the undiscounted amount to Profit and loss account in the year in which related service is rendered.

b) Defined Contribution Plan

Contribution to defined contribution schemes towards retirement benefit in the form of Provident Fund and Superannuation Fund for the year are charged to Profit and Loss Account as incurred.

c) Defined Benefit Plan

Liabilities in respect of defined benefit plans are determined based on actuarial valuation made by an independent actuary using projected unit credit method as at the balance sheet date. Actuarial gains or losses are recognized immediately in the profit and loss account.

Terminal benefits are recognized as expenses as and when incurred.

Impairment of Fixed Assets

Consideration is given at each Balance Sheet date to determine whether there is any indication of impairment on the carrying amount of the Companys fixed assets. If any such indication exists, an assets recoverable amount is estimated. An impairment loss is recognized whenever the carrying amount of an asset exceeds recoverable amount.

 
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