Prestige Foods Ltd. कंपली की लेखा नीति

Mar 31, 2010

1. BASIS OF ACCOUNTING

The Financial Statements of the Company are prepared in accordance with the requirements of the Companies Act, 1956, including the mandatory Accounting Standards issued by the Institute of Chartered Accountants of India, under the historical cost convention, going concern concept and on the accrual system of accounting.

2. FIXED ASSETS

Normally Fixed Assets of the Company are recorded at their historical cost. Increase in value of assets on their revaluation is added to original cost and is depreciated thereafter. Gains on revaluation of assets are credited to revaluation reserve. All direct and indirect costs prior to installation of assets are capitalized. Cost of finance? raised specially for acquisition upto the date of installation of assets ,i capitalized.

3. INVESTMENTS

Investments have been classified as long term investment in accordance with the Accounting Standard 12 of the ICAI. Investments are stated at cost where applicable. Gains / losses on disposal of long term investments are recognized as Income / expenditure as the case may be. Dividends are accounted when received. Any fall in the value of investments if any, is considered to be of temporary nature and is covered by free reserves of the Company if available.

4. INVENTORY

Inventories are valued at lower of cost or market value.

5. Revenue recognition

i) Sales are accounted at the time of dispatch of goods and transaction complete.

ii) Processing charges are recognized on completion of the job.

6. DEPRECIATION

Depreciation on fixed assets is provided on straight-line method in accordance with provisions of Schedule XIV to the Companies Act, 1956 and circulars issued by Company Law Board. Depreciation on amount added to cost of assets consequent upon revaluation is charged to revaluation reserve.

7. FOREGIN CURRENCY TRANSACTIONS

Exports of the Company are recorded at their realized value. Outstanding realizable before finalization of accounts are recorded at latest available exchange rates. Investments in shares of Foreign Subsidiary are recorded at their original cost. Outstanding forward foreign exchange contracts as at close of the accounting year are adjusted in books at exchange rates prevailing at the year-end. Gains / losses on such adjustments if permanent in nature are recorded as exchange fluctuation.

8. EXCISE DUTY

Excise Duty is treated as part of production but charged only on goods cleared and also provided on the goods lying in the factory at theyearend.

9. LEASE

Lease rentals are expenses with reference to lease terms.

10. RETIREMENT BENEFITS

The Provident Fund and Superannuation Schemes are defined contribution plans for which contribution accrued during each year as perthe Scheme are expensed..

Provision for gratuity liability of employees is made on the basis of actuarial valuation as provided under the Group Gratuity Cum Life Insurance Policy taken by the Company from LIC, premium paid whereof is charged to revenue in each year. Provision for encashment of leave entitlement is made on accrual basis in accordance with revised Accounting Standard 15 of the Institute of Chartered Accountants of India.

11. PROVISION FOR TAXES ON INCOME

Provision for Income Tax is made on the basis of results of the year. Although the actual liability will be computed and paid on the basis of the results for the financial year, in accordance with Accounting Standard AS22- "Accounting for taxes on income" issued by the Institute of Chartered Accountants of India, the deferred taxes for the time difference between book and tax profit for the year is accounted for using tax rates and laws that have been enacted or substantially enacted by the Balance Sheet date. . Deferred tax assets arising from temporary time difference are recognized to the extent there is reasonable certainty that the asset can be realized in future.

12. PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Provisions involving substantial degree of estimation in measurement are 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 recognized but are disclosed in the notes. Contingent assets are neither recognized nor disclosed in the financial statements

13. BORROWING COST

Borrowing costs that are attributable to the acquisition of qualifying assets are capitalized as part of cost of such assets till such time as the asset is ready for its intended use. A qualifying asset is an asset that necessarily requires a substantial period of time to get ready for its intended use. All . other borrowing costs are recognized as an expense in the period in which they are incurred.

14. IMPAIRMENTS OF ASSETS

An asset is treated as impaired, when carrying cost of assets exceeds its recoverable amount. An impairment loss is charged to the Profit & Loss account in the year which an asset is identified as impaired. The impairment loss recognized in prior accounting periods Is reserved if there has been a change in the estimate of the recoverable amount.