a) Basis of Accounting
The financial statements are prepared under the historical cost
convention on an accrual basis of accounting in accordance with the
Generally Accepted Accounting Principles (GAAP), Accounting Standards
Issued by the Institute of Chartered Accountants of India,as
applicable, and the relevant provisions of the CompaniesAct, 1956.
b) Use ofEstimates
The preparation of financial statements requires estimates and
assumptions to be made that affect the reported amount of assets and
liabilities on the date of the financial statements and the reported
amount of revenues and expenses during the reported period. Difference
between the actual results and the estimates are recognized in the
period in which the results are known/ materialized.
c) Revenue recognition
The Company follows mercantile system of the accounting and recognises
income and expenditure on accrual basis except those with significant
d) Fixed Assets
i) Fixed Assets
Fixed assets are stated at cost of acquisition or construction, net of
tax /duty credit availed if any, including any cost attributable for
bringing the assets toits working condition for its intended use,less
depreciation (except freehold land).
ii) Capital Expenditure
Assets under erection/installation and advance given for Capital
Expenditure are shown as Capital work in progress, Expenditure during
construction period are shown as pre-operative expenses to be
capitalized on erection/installations of the assets.
iii) Leasehold Land
CostofLease hold landisamortized over the periodoflease.
Depreciationon fixed assetsisprovidedonstraight line method atthe rates
and inthe manner specifiedinSchedule XIVtothe Companies Act, 1956.
Depreciation on assets added/disposed off during the year has been
provided on pro-rata basis with reference to the date of addition /
disposal, except for low value items costing Rs. 5,000/- or less are
written off fully in the year of purchase.
f) Intangible Assets
The cost of acquisition of trademark is amortized over a period of 10
years. The cost of software acquired for internal use are amortized
overaperiod of 3yearsor useful lifeofthe software, which ever is
g) Borrowing cost
Borrowing cost attributable to the acquisition and constructions of
assets are capitalised as part of the cost of such asset upto the date
when such assetis ready for its intended use. Other borrowing costs are
charged to Profit and Loss Account.
h) Valuation of inventories
Inventories are valued at lower of cost or net realisable value, except
scrap is valued at net realisable value. Cost of inventory is arrived
at by using Moving Average Price Method. Cost of inventory is generally
comprises of cost of purchases, cost of conversion and other cost
incurredin bringing the inventoriestotheir present location and
i) Export Incentive
The Export incentives are accounted for on accrual basis taking into
account certainty of realisation and its subsequent utilisation.
Investments are valued at cost of acquisition. In case of long term
investments, no provision is made for diminution in the
valueofinvestments, where,inthe opinionofthe BoardofDirectors such
diminution is temporary.
Current Investments are stated at lower of cost and market/fair value.
k) Foreign currency transaction
a) All transactions in foreign currency are recorded at the rates of
the exchange prevailing on the dates when the relevant transactions
took place any gain/ loss on account of the fluctuations in the rate of
exchange is recognized in the statement of Profit & Loss.
b) Monetary items in the form of loans, current assets and current
liabilities in foreign currencies at the close of the year are
converted in the Indian currency at the appropriate rate of exchange
prevailing on the dates of the Balance Sheet. Resultant gainor loss on
account of fluctuation in the rate of exchange is recognized in the
statement of Profit & Loss.
c) In respect of the Forward Exchange Contracts entered into to hedge
foreign currency risks, the difference between the Forward Rate and
Exchange Rate at the inception of the contract is recognized as income
or expense over the life of the contract. Further, the exchange
difference arising on such contracts are recognized as income or
expense along with the exchange differenceonthe underlying assets/
l) Employee Benefits.
(a) Post-employment benefit plans
i) Defined Contribution Plan - Contributions to Provident Fund and
Family Pension fund are accrued in accordance with applicable statute
and deposited with appropriate authorities.
ii) Defined Benefit Plan
a. The liability inrespectofleave encashmentisdetermined using
acturial valuation carried outasatBalance Sheet date.Acturial gains and
losses are recognizedinfullin Profit and LossAccount for the
yearinwhich they occur.
b. The Company has opted for scheme with Life Insurance Corporation of
India to cover its liabilities towards employees gratuity at Etah Unit.
The annual premium paid to Life Insurance Corporation of India is
charged to Profit and LossAccount.The Company also carried out acturial
valuation of gratuity using Projected Unit Credit Method as required by
Accounting Standard 15 Employee Benefits (Revised 2005) and
difference between fair value of plan assets and liability as per
acturial valuation as at year end is recognized in Profit and Loss
(b) Short term employee benefits
The undiscounted amount of short term employee benefits expected to be
paid in exchange for services rendered by employees is recognized
during the period when the employees render the services. These
benefits include compensated absence also.
m) Taxes on Income
Provision for Current Tax is the amount of tax payable on taxable
income for the year as determined in accordance with the provisions of
the Income Tax Act, 1961.
Deferred tax is recognised on the timing difference, being the
difference between taxable income and the accounting income for the
year and quantified using the tax rates and laws enacted or
substantively enactedason the balance sheet date.
Deferred tax assets are recognised and carried forward to the extent
that there is a reasonable certainty that sufficient future taxable
income willbeavailable against which such deferred tax asset
n) Segment Accounting
Segment Accounting Policies:-
Following accounting policies have been followed bythe Company for
(1) The Company has disclosed business segment as the primary segment.
Segments have been identified taking into account the type of products,
the differing risk and returns and the internal reporting system. The
various segments identifiedbythe Company comprisedasunder :
Name of Segment Comprised of
Dairy Products - Milk, Ghee, Milk Powder and other Dairy products.
WindPowerUnit - Wind Power Generation
Other - Trading of Coal, Agri Commodities, Edible Oil etc.
By products relatedtoeach segment have been included inrespective
(2) Segment revenue, segment results, segment assets and segment
liabilities includes respective amounts directly identified with the
segment and also an allocation on reasonable basis of amounts not
directly identified. The expenses which are not directly relatabletothe
business segment are shownasunallocable corporate cost.Assets and
liabilities that cannot be allocated between the segments are shown as
unallocable corporate assets and liabilities respectively. Intersegment
revenue are recognisedatsale price.
The carrying amount of assets are reviewed at each Balance Sheet date,
if there is any indication of impairment based on internal/ external
An assetis treatedas impaired when the carrying cost ofasset exceeds
its recoverable value. Animpairment loss ischarged to the profit and
loss account in the year in which an asset is identified as impaired.
An impairment loss recognised in prior accounting
periodisreversedifthere has beena changeinthe estimate ofrecoverable
p) Provision, Contingent Liabilities and ContingentAssets
Provision 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 an outflow of resources.
Contingent liabilities are not recognized but are disclosed inthe
financial statements. Contingent assets are neither recognized nor
disclosedin the financial statements.
q) Cash Flow Statement
Cash flows are reported using indirect method, whereby profit/(loss)
before extraordinary items and tax is adjusted for the effects of
transactions of non-cash nature and any deferrals or accruals of past
or future cash receipts or payments. The cash flow from operating,
investing and financing activitiesofthe company are segregated based
onthe available information.