1. Basis of Preparation : The Financial Statements of Coromandel Agro
Products & Oils Limited have been prepared and presented under the
historical cost convention on the accrual basis of accounting in
accordance with the accounting principles generally accepted in India
(GAAP) and comply with the mandatory Accounting Standards(AS) issued by
the Institute of Chartered Accountants of lndia to the extent
applicable and with the relevant provisions of the Companies Act, 1956.
2. Use of Estimates : The preparation of the financial statements in
conformity with GAAP requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent liabilities on the date of the financial
statements and reported amounts of revenues and expenses for the year.
Actual results could differ from these estimates. Any revision to
accounting estimates is recognized prospectively in the current and
3. Fixed Assets : Tangible assets i.e., Land, Buildings, Plant and
Machinery are stated at revalued cost less depreciation. Other fixed
assets are stated at cost less depreciation. Depreciation has been
provided as per the amendment to Schedule XIV vide Notification dated
16-12-1993 of the Companies Act, 1956 on straight line basis as per the
provisions of Section 205(2)(b). Lease hold land is amortised over the
period of lease. Depreciation on additions due to revaluation of fixed
assets is provided based on the estimated residual life of the assets
as per approved valuer report. This amount of depreciation for each
year attributable to the revalued assets is transferred from Assets
Revaluation Reserve to Credit of Profit and Loss Account.
4. Investments : Investments are stated at cost.
5. Provision for Retirement Benefits : Company has taken the L.I.C.
Group Gratuity and Superannuation Policies to cover the liability
arising out of employees going to retire. Liability under Gratuity is
determined on actuarial valuation done by L.I.C. of India
6. Inventories : The inventories comprising raw materials, stores &
spares and finished goods are valued at cost or net realisable value,
whichever is less. The term cost comprises of purchase price including
duties and taxes, freight inwards and other expenditure directly
attributable to the acquisition excluding refundable duties and taxes.
The costs is computed on weighted average basis.
7. Foreign Currency Transactions : Foreign Currency Transactions are
recorded using the exchange rates prevailing on the dates of the
respective transactions. Exchange differences arising on Foreign
Currency Transactions settled during the year are recognized in the
Profit & Loss Account.
8. Revenue recognition of income and expenditure : All Income and
Expenditure are accounted on accrual basis, except where stated
9. Provisions and Contingencies : A provision is made in the books of
account when there is a present obligation as a result of past event
that probably required an outflow of resources and a reasonable
estimate can be made of the obligation.
A disclosure for a contingent liability is made when there is a
possible obligation or present obligation that arises from past events
and the outflow of resources embedding economic benefit is not
A contingent liability or a provision at the Balance Sheet date is not
disclosed or recognized unless the possibility of any outflow in
settlement is remote.
10. Deferred Income-Taxes : Deferred Tax charge or credit reflects
that tax effects of timing differences between accounting income and
taxable income for the period. The deferred tax charge or credit and
the corresponding deferred tax liability or asset are recognized using
the tax rates that have been enacted or substantial enacted by the
balance sheet date. Deferred tax assets are recognized only to the
extent there is reasonable certainty that the assets can be realized in
future, however, where there is unabsorbed depreciation or carry
forward losses, deferred tax assets are recognized only if there is
virtual certainty of realization of such assets. Deferred tax assets
are reviewed at each balance sheet date and written down or written up
to reflect the amount that is reasonable/virtual certainty (as the case
may be) to be realized.
11. Impairment of Assets: An Asset is treated as impaired when the
carrying of cost of Assets exceeds its receivable value. An impairment
loss is charged for when the asset is identified as impaired. The
impairment loss received in prior accounting period is reversed if
there has been a change in the estimate of recoverable amount.