Indu Nissan Oxo Chemicals Industries Ltd. कंपली की लेखा नीति

Mar 31, 2014

ACCOUNTING CONCEPTS:

The Company follows mercantile system of accounting, and recognises income and expenses on accrual basis that are of significant nature. The financial statement have been prepared to comply in all material respect with the mandatory Accounting standards issued by the Ministry of Corporate Affairs, in accordance with Indian Generally Accepted Accounting Policies and as per the provision of the Companies Act, 1956 unless otherwise stated.

FIXED ASSETS:

Fixed Assets are carried at cost, except certain assets revalued in the year 1996-97 referred to in the note No. 4 below, inclusive of inward freight, duties, taxes, interest and expenses up to putting the assets in use, less accumulated depreciation (except freehold land).

DEPRECIATION:

(i) The Company provides depreciation in respect of Plant & Machinery on Straight line method and other assets on written down value method from the date of Acquisition.(ii) Freehold land being non depreciable, is carried at original cost.(iii) Assets costing less than Rs. 5,000/- each have been fully depreciated in the year of acquisition.(iv) Depreciation on all other assets for the year has been provided at the rates prescribed in schedule XIV to the Companies Act, 1956 as revised by Notification No. GSR 758(E) dated 16.12.1993 of the Department of Company Affairs.

INVESTMENTS:

A current investment is an investment that is by its nature readily realizable and is intended to be held for not more than one year from the date on which such investment is made. A long term investment is an investment other than a current investment. An investment property is an investment in land or buildings that are not intended to be occupied substantially for use by, or in the operations of, the investing enterprise. Long term investments and are stated at cost. The carrying amount for current investments is the lower of cost and fair value.

BORROWING COSTS:

Borrowing costs that are attributable to the acquisition or construction of qualifying assets, the assets that take substantial period of time to get ready for intended use, are capitalised as part of the cost of such assets.

INTANGIBLE ASSET:

An asset is treated as intangible asset if it is an identifiable non-monetary asset, without physical substance, held for use in the production or supply of goods or services, for rental to others, or for administrative purposes. Intangible Assets are stated at cost of acquisition less accumulated amortization.

INVENTORIES:

These are valued as under (i) Raw material - At cost.(ii) Stores & Spares and Packing Material: At net realizable value. (iii) Catalyst: At cost subject to useful life based on technical evaluation.(iv) Semi-finished products: At lower of cost or net realizable price of finished goods after deducting the estimated expenses of conversion (v) Finished Products: At cost or net realizable value, whichever is lower.(vi) By products: At realizable / replacement value, being cost of by products not determined. The Company follows the accounting practice whereby the excise duty payable on the finished goods and products is accounted for only on clearance of goods from the bonded warehouse. Accordingly, no provision is being made for excise duty payable on finished goods, by products and semi - finished goods not cleared from the bonded warehouse at the close of the accounting year. However, non-provision of this liability does not affect profit/loss for the year.

FOREIGN EXCHANGE TRANSACTIONS:

Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing at the time of the transaction. Monetary items denominated in foreign currencies at the year end are restated at year end rates. Non Monetary foreign currency items are carried at cost. Any income or expense on account of exchange difference either on settlement or on translation is recognized in the Statement of Profit and Loss.

CASH FLOW STATEMENT:

Cash flows are reported using the indirect method, whereby the net profit before tax is adjusted for the effects of transactions of a non-cash nature and any deferrals or accruals of the past or future cash receipts or payments. The cash flows from regular revenue generating, investing & financing activities of the company are segregated.

REVENUE RECONGNITION:

(i) Sales: There is no sales during the year.(ii) Lease rentals: The income from finance lease is recognized as per the contracted terms.

RETIREMENT BENEFITS:

The Company does not have defined employee retirement policy as the employee strength does not exceed the statutory minimum.

IMPAIRMENT OF ASSETS:

An asset is treated as impaired when the carrying cost of the Asset exceeds its recoverable value. An impairment loss is charged to the Statement of Statement of Profit and Loss in the year in which an asset is identified as impaired. The Impairment loss recognized in prior accounting periods is increased / reversed where there has been change in the estimate of recoverable amount The recoverable value is the higher of the net selling price and value in use.

USE OF ESTIMATES:

The preparation of financial statements requires management to make estimates and assumption that affect the reported amounts of assets and liabilities on the date of financial statements, the reported amount of revenues and expenses and the disclosures relating to contingent liabilities as on the date of financial statements. Actual results could differ from those of estimates. Any revision in accounting estimates is recognized in accordance with the respective accounting standard.

EARNINGS PER SHARE:

The Company reports basic and diluted earnings per share in accordance with AS-20 "Earnings Per Share". Basic earnings per share are computed by dividing the net profit or loss for the period by the weighted average number of Equity Shares outstanding during the period. Diluted earnings per share is computed by dividing the net profit or loss for the period by the weighted average number of Equity Shares outstanding during the period as adjusted for the effects of all dilutive potential equity shares.

PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:

Contingent liabilities as defined in AS-29 "Provisions, Contingent Liabilities and Contingent Assets" are disclosed by way of notes to accounts. Provision is made if it becomes probable that an outflow of future economic benefits will be required for an item previously dealt with as a contingent liability.

LEASES: .

Assets leased by the Company in its capacity as lessee, where the Company has substantially all the risks and rewards of ownership are classified as finance lease. Such a lease is capitalised at the Inception of the lease at lower of the fair value or the present value of the minimum lease payments and a liability is recognised for an equivalent amount. Each lease rental paid is allocated between the liability and the interest cost so as to obtain a constant periodic rate of interest on the outstanding liability for each year. Lease arrangements where the risks and rewards incidental to ownership of an asset substantially vest with the lessor, are recognised as operating leases. Lease rentals under operating leases are recognised in the statement of profit and loss on a straight-line basis unless another systematic basis is more representative of the time pattern in which benefit derived from the use of the leased asset is diminished.

TAXES ON INCOME:

Tax expenses comprise both current & deferred taxes. Current tax is determined as the tax payable in respect of taxable income for the year. Deferred tax for the year is recognised on timing difference; being difference between taxable incomes and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets and liabilities are measured assuming the tax rates and tax laws that have been enacted or substantially enacted by the Balance Sheet date. Deferred tax assets are recognised and carried forward only if there is a reasonable / virtual certainty of realisation.

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Mar 31, 2010

(a) Accounting Convention:

The accounts are prepared, subject to Note 2(b) under historical cost convention on accrual basis except in case of significant uncertainties.

(b) Fixed Assets:

Fixed Assets are carried at cost, except certain assets revalued in the year 1996-97 referred to in the note No.4 below, inclusive of inward freight, duties, taxes, interest and expenses upto putting the assets in use, less accumulated depreciation (except freehold land).

(c) Investments: Investments are in the nature of long term and are stated at cost.

(d) Inventories: These are valued as under:

(i) Raw material -At cost.

(ii) Stores & Spares and Packing Material: At market value.

(iii) Catalyst: At cost subject to useful life based on technical evaluation.

(iv) Semi-finished products: At lower of cost or market price of finished goods after deducting the estimated expenses of conversion

(v) Finished Products: At cost or market value, whichever is lower.

(vi) By products: At realisable/replacement value, being cost of by products not determined.

The Company follows the accounting practice whereby the excise duty payable on the finished goods & products is accounted for only on clearance of goods from the bonded warehouse. Accordingly, no provision is being made for excise duty payable on finished goods, by products and semi - finished goods not cleared from the bonded warehouse at the close of the accounting year. However, non-provision of this liability does not affect profit/loss for the year.

(e) Revenue Recognition:

(i) Sales:

Sales comprise sale of goods and are stated net of excise duty.

(ii) Lease rentals:

The income from finance lease is continued to be recognised as per the contracted terms as per consistent accounting policy in view of the following:

The Company has entered into finance lease transactions i.e. purchase and lease back of the assets with Rajasthan State Electricity Board (RSEB) dated 30.9.95 and 30.3.96. As per the terms of the agreements there was a Deferred Payment arrangement (DPA) payable in installments towards payment of purchase consideration by the Company to RSEB, and the lease rentals are being receivable from RSEB over a period from 1995-2004. The Company had defaulted in payment of installments of DPA payable to RSEB and RSEB has withheld the lease amount payable by them to the Company.

The company has received a notice from Rajasthan Rajya Vidyut Prasaran Nigam Ltd. (Formerly known as RSEB) raising a demand of Rs.715.90 Lacs and interest @ 20% p.a based on monthly rests. The company has raised a claim for lease rental receivable of Rs.408 lacs on RSEB after adjusting all balance purchase price of leased assets. The company has filed a suit in the Rajasthan High court for recovery of Lease Rentals from R.S.E.B of Rs.964.92 Lacs including Interest @20%p.a., after adjusting the DPA amount. The company does not expect any liability on this account.

(f) Foreign Currencies Transactions:

The transactions involving foreign currencies are accounted at the exchange rate applicable on the relevant date and the outstandings as on the balance sheet date are accounted at the closing rate except in respect of one of the creditors wherein the Company has entered into an arrangement whereby the liability in terms of US Dollars payable to the said creditors as on 31.3.2000 has been converted in terms of Rupee. (Please refer Note No.5 below). All exchange differences arising from foreign currency transactions on current assets and liabilities are adjusted to the profit and loss account and relating to Fixed Assets are being capitalised.

(g) Depreciation:

(i) The Company provides depreciation in respect of Plant & Machinery on Straight line method and other assets on written down value method from the date of Acquisition.

(ii) Freehold land being non depreciable, is carried at original cost.

(iii) Assets costing less than Rs.5,000/- each have been fully depreciated in the year of acquisition.

(iv) Depreciation on all other assets for the year has been provided at the rates prescribed in schedule XIV to the Companies Act, 1956 as revised by Notification No. GSR 758(E) dated 16.12.1993 of the Department of Company Affairs.