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Khaitan (India)
BSE: 590068|NSE: KHAITANLTD|ISIN: INE731C01018|SECTOR: Trading
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Accounting Policy Year : Mar '14
a) Basis of preparation of Financial Statements
 
 The Financial Statements are prepared in accordance with generally
 accepted Accounting Standards in India and the provisions of the
 Companies Act, 1956.
 
 b) Basis of Accounting
 
 The accrual basis of accounting is followed unless otherwise stated.
 
 c) Tangible Fixed Assets
 
 Fixed Assets (excluding Revalued Assets) are stated at cost including
 cost of installation and other incidental expenses.  Assets of Rs.
 5,000/- and below have been fully depreciated during the year of
 purchase.
 
 d) Depreciation & Amortisation
 
 Depreciation on Fixed Assets, acquired after 31.08.1970, has been
 calculated on Straight Line Method under Section 205(2)(b) of the
 Companies Act, 1956 while other assets have been depreciated on Written
 Down Value Method under Section 205(2)(a) of the said Act.
 
 e) Investments
 
 Investments are stated at cost. Provision for diminution in value of
 investment is not made if they are long term in nature.  Investments,
 which are readily releasable and intended to be held for not more than
 one year from the date of investment made, are classified as Current
 Investments. All investments other than long term investments are
 classified as Current Investments. Current Investments are valued at
 lower of Cost or Fair Value.
 
 f) Inventories
 
 Inventories are valued on FIFO basis as under:- i) Stores, Spares &
 Others : At cost exclusive of CENVAT receivable ii) Finished Goods : At
 lower of cost or market value iii)Stock-in-Process:
 
 -Sugar and Molasses: At lower of estimated cost or realisable value
 -Planted Trees, having maturity of above 18 months, are taken at
 estimated realisable value.
 
 g) Cash and Bank Balance
 
 Cash and Bank Balance comprises of cash on hand, balances with banks in
 current accounts and demand deposits with banks.  
 
 h) Foreign ExchangeTransaction
 
 Transactions in foreign currencies are recognised at the prevailing
 exchange rates on the transaction dates. Realised gains and losses on
 settlement of foreign currency transactions are recognized in the
 Profit & Loss Account. Foreign currency monetary items at the year-end
 are reported at the year-end exchange rate, and the resultant exchange
 difference is recognised in the Profit & Loss Account.
 
 In respect of transactions covered by Forward Exchange Contracts, the
 difference between the contract rate and spot rate on the date of
 transaction is amortised over the life of contract.
 
 i) Contingent Assets & Liabilities
 
 Contingent Liabilities are shown by way of Notes to the Accounts in
 respect of obligations where, based on the evidence available, their
 existence at the Balance Sheet date is considered not probable.
 
 Contingent Assets are neither recognised nor disclosed in the financial
 statements.  
 
 j) Impairment of Assets
 
 Impairment of losses, if any is recognised in accordance with the
 accounting standard issued in this regard by the Institute of Chartered
 Accountants of India.
 
 k) Segmental Reporting
 
 The company''s operating business are organised and managed as per
 location of the client. Common cost is allocated to the cost based on
 the Revenue Mix. Unallocated cost is disclosed separately. The company
 prepares its segment information in conformity with the accounting
 policy adapted for preparing and presenting the financial statement of
 the Company as a whole.  
 
 l) Earning Per Share
 
 Basic earning per share is calculated by dividing the net profit or
 loss for the period attributable to equity shareholders.  m) Revenue
 Recognition Sales are shown inclusive of excise duty and net of
 returns. Dividend Income is recognised when right to receive is
 established.
 
 n) Employees Benefits
 
 Contribution of Employer''s Share to Employee''s Provident Fund are
 worked on accrual basis and charged to Profit & Loss Account. The
 Company also provides for gratuity and leave encashment based on
 acturial valuation made by an independent actuary as per As-15.
 
 o) Leases
 
 Lease rentals on operating leases are charged on a monthly basis to
 Accounts.
 
 Assets taken on Finance Lease have been capitalised during the year of
 Agreement and charged off in accordance with the applicable rate of
 depreciation.
 
 p) Borrowing cost
 
 Borrowing costs in relation to a qualifying asset and capitalised as
 part of the cost of a qualifying asset when it is probable that they
 will result in future economic benefits to the enterprise and the costs
 can be measured reliably. Other borrowing costs are recognised as an
 expense in the period in which they are incurred.  
 
 q) Taxation
 
 Provision for tax is made on the taxable income for the year in
 accordance with the applicable provisions of the Income Tax Act, 1961.
 Deferred tax is recognised subject to consideration of prudence in
 respect of deferred tax assets, on timing differences, being the
 difference between taxable income and accounting income that originate
 in one period and are capable of reversal in one or more subsequent
 periods.
 
 r) Provisions
 
 Provisions are recognised in respect of obligations where, based on the
 evidence available, their existence at the Balance Sheet date.  
 
 s) Excise Duty, under expenditure, represents payments made/to be made
 during the year on goods cleared/to be cleared.  Payment of services
 where service tax is charged and credit for the same is taken as
 accounted net of service tax.
 
 t) The expenses incurred on sugarcane and on trees are accumulated
 under the caption Standing Sugarcane and Planted Trees (excluding
 planted trees having maturity of over 18 months) respectively and
 charged to statement of Profit & Loss in the year of harvesting.
 
 Details of Security
 
 1.  Working Capital Term loan from IDBI was secured by Hypothecation of
 Stock, Book Debts, Standing Corps, all Moveable Properties and Mortgage
 of 2067.21 acres of Company''s Agriculture Land and second charge on
 Fixed Assets of Sugar Division and guarantee of its one director,
 overdrafts against pledge of Fixed Deposit Receipts.
 
 2.  Loan from Sugar Development Fund is secured by charge on specified
 assets and guaranteed by a director of the Company.
 
 Terms of Repayment of Secured Term Loans
 
 1. Loan from Sugar development fund for Rs. 287.55 lacs sanctioned on
 31-03-1992 to be disbursed in 3 installments upto 31-03-1995. However,
 only one instalment of Rs. 132.19 lacs was disbursed. Initially rate of
 interest was 9% p.a. and penal interest was 2.5% above normal rate of
 interest. The interest rate was later revised to 4.5%. There was a
 moratorium of 3 years and Repayment of Principal was to be made in 4
 equal annual instalments after expiry of moratorium period and interest
 on loan was payable annually. At present amount due on principal
 account is Rs.8563117 (Previous Year Rs.8563117) and Rs.23407350.70
 (Previous Year Rs.21759260) towards interest. The Company has sent a
 proposal to Sugar Development Fund for concession/waiver of interest
 which is pending. Inerest on loan of Rs.1648081 for the year (Previous
 Year Rs.1554793) has been provided as per agreement.
 
 The Company has defaulted in repayment of loan and interest in respect
 of the following :
 
 1.  Term Loan from IDBI was to be paid in monthly instalment of Rs.10
 lacs. Although the full amount has been paid but the same has not been
 paid on due dates either in F.Y 2013-14; 2012-13 and 2011-12 and hence
 over and above the interest, compound interest and penalty on principal
 amount has been imposed.
 
 2.  The loan from Sugar Development Fund of Rs. 132.19 lacs was
 repayable in 4 annual instalments by 1999. There is a continuous
 default now. Principal amount of Rs. 46,56,883 has been paid and
 balance amount due is Rs. 8563117 as on 31-03-2014 (F. Y.  2013-14) and
 interest due is Rs.23,407,350.70 as on 31.03.2014.
Source : Dion Global Solutions Limited
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