Adarsh Chemicals & Fertilisers Ltd. कंपली की लेखा नीति

Mar 31, 2000

1. BASIS OF ACCOUNTING:

i) The accounts are prepared based on historical cost except land which was revalued and on the accounting principles of going concern. (Refer note No. 2. of schedule 21.)

ii) Accounting policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles. In applying the accounting policies considerations has been given to prudence, substances over form and Materiality.

iii) The Company follows Mercantile System of accounting and recognises Income and expenditure on accrual basis.

2. FIXED ASSETS & DEPRECIATION :

pi) Fixed Assets except and: (Which was revalued) are stated at cost less depreciation. Cost includes financing cost incurred on borrowed funds used for the construction or acquisition of Fixed Assets upto the commencement of commercial production.

ii) Depreciation is provided on the Straight Line Method at the rates and in the manner prescribed in schedule XIV to the Companies Act,1956 Goodwill and Freehold land are note depreciated.

3. INVENTORIES:

Stocks of Stores and Spares and Packing Materials are valued on weighted average cost. Raw Materials are valued at cost as determined on FIFO basis. Goods in process and finished goods are valued at lower of cost or Net realisable value and for this purpose, cost is determined on absorption costing basis.

4. SALES

Sales are accounted net of trade discount. Excise duty (except on consignment sales) and Sales. Tax recovered are not included in Sales.

5. RESEARCH& DEVELOPMENT:- Revenue expenditure on Research & Development (R & D) are charged as an expense in the year of occurrence Capital expense on R&D is shown as addition to fixed assets.

6.CATALYST:

Cost of initial charge of Catalyst prior to commissioning of plant is treated as Capital while expenditure on catalyst replaced is written off over the estimated life. The portion of expenditure related to unexpired life is carried forward as deferred revenue expenditure.

7. PRELIMINARY EXPENSES :

Share issue expenses relating to the project is written off over a period of five year Commencing from the year of commissioning.

8. ACCOUNTING FOR RAW MATERIAL CONSUMPTION :

Duty free imports of raw materials under Advance Licence for imports as per the Import and Export Policy are matched with the exports made against the said licences and the benefit/obligation is accounted by making suitable adjustments in raw material consumption.

9. ACCOUNTING OF MODVAT CREDIT

Modvat credit is accounted on the basis of purchase cost of raw materials.

10. EXPENDITURE DURING CONSTRUCTION PERIOD :

Expenditure incurred on Projects under implementation is capitalised, and apportioned amongst the various assets on commencement of the Project.

11. FOREIGN EXCHANGE TRANSACTIONS:

Assets and liabilities related to foreign currency transactions remaining unsettled at the end of the year are translated at contract rates, when covered by foreign exchange contracts and at year end rate in other cases. Realisable gains and losses on foreign exchange transactions other than those relating to fixed assets are recognised in the Profit & Loss Account Realisable gain or loss-incurred to acquire fixed assets is treated as an adjustment to the carrying cost of such fixed assets.