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Moneycontrol.com India | Accounting Policy > Food Processing > Accounting Policy followed by Ravalagaon Sugar Farm - BSE: 507300, NSE: RAVALSUGAR
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Ravalagaon Sugar Farm

BSE: 507300|NSE: RAVALSUGAR|ISIN: INE615A01017|SECTOR: Food Processing
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Ravalagaon Sugar Farm is not traded in the last 30 days
Mar 15
Accounting Policy Year : Mar '16

1 Significant Accounting Policies :

a. Basis of Accounting:

The financial statements are prepared in accordance with generally accepted accounting principles in India. The financial statements have been prepared in all material respects in accordance with the accounting standards as specified under Section 133 of the Companies Act 2013 read with Rule 7 of the Companies (Accounts) rules, 2014. Financial statements are prepared on historical cost basis and as a going concern. The Company follows the mercantile system of accounting and recognizes income and expenditure on accrual basis. The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

b. Use of Estimates:

The preparation of financial statements requires management to make certain estimates and assumptions that affect the amounts reported in the financial statements and notes thereto. Differences between actual results and estimates are recognized in the period in which they materialize.

c. Fixed Assets:

Fixed Assets are stated at cost less accumulated depreciation. The cost of assets comprises of purchase price and directly attributable cost of bringing the assets to working condition for its intended use including borrowing cost and incidental expenditure during construction incurred up to the date of commissioning.

d. Depreciation:

i Depreciation on Fixed Assets is charged in the accounts on the Straight Line Method in accordance with the Schedule II of the Companies Act, 2013.

ii Depreciation in respect of each individual item of asset costing up to Rs. 5000/- is provided @ 100% in the year of purchase.

iii Software is amortized over 3 years from the date of implementation.

e. Investments:

Long Term Investments are valued at costs. Provision for diminution in value of investments is made if, in the opinion of the management, the diminution is of a permanent nature.

Current Investments are valued at lower of cost or fair value.

f. Inventories:

i Stores, spares, packing materials, loose tools and raw materials are valued at cost or net realizable value whichever is lower, by applying the First In First Out (FIFO) Method.

ii Finished goods are valued at Cost or Net Realizable Value whichever is lower.

iii Work in progress / process is valued at lower of cost or net realizable value.

iv Estimated quantities of saleable by-products i.e. Molasses, Bagasse and Treated Dry Press mud are valued at estimated Net Realizable Value.

g. Revenue Recognition:

i The company recognizes revenue from sale of products upon dispatch/delivery of the goods coupled with transfer of title to the customers.

ii Revenue from service is recognized on rendering of services to customers.

iii Interest Income is recognized on time proportion basis.

iv Dividend Income is recognized, at the time when they are declared.

h. Foreign Currency Transaction:

i Foreign currency transactions are accounted at the rates prevailing on the date of transaction.

ii Monetary Assets and Liabilities denominated in foreign currencies are translated at the exchange rate prevailing on the Balance Sheet date. Any gains or losses arising due to exchange differences at the time of translation or settlement are accounted for in the Profit and Loss Account.

i. Employee Benefits:

i Short Term employee benefits are recognized as an expense at the undiscounted amount in the Profit and Loss Account for the year in which the related service is rendered.

ii In respect of Post employment benefits viz. Gratuity, the Company has a master policy with LIC under Group Gratuity Scheme for its employees. The company provides / contributes to LIC Group Gratuity Scheme for future payments of retirement gratuity to the employees as determined by Management.

iii Other Long term benefits viz. Leave Encashment are recognized as an expense in the Profit and Loss Account for the year in which the employee has rendered service. The expense is recognized at the present value of the amounts payable determined using actuarial valuation techniques. Actuarial gains and losses are charged to the Profit and Loss Account.

iv Company’s contribution paid / payable to defined contribution schemes such as Provident Fund, Superannuation are charged to Profit and Loss Account.

j. Taxation:

Provision for current tax is made after taking into consideration benefits admissible under the provisions of Income Tax Act, 1961. Deferred Tax resulting from “timing difference” between book and taxable profit is accounted for using the tax rates and laws that have been enacted or substantively enacted as on the Balance Sheet date. The deferred tax asset is recognized and carried forward only to the extent there is reasonable certainty / virtual certainty, as the case may be, that the asset will be realized against future taxable profits.

k. Impairment of Assets:

At each Balance sheet date, the management reviews the carrying amount of its assets and goodwill included in each Cash generating Unit to determine whether there is any indication that those assets were impaired. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of impairment loss. Recoverable amount of an asset is the higher of an asset’s net selling price and value in use. In assessing value in use, the estimated future cash flows from the continuing use of the asset and from its disposal are discounted to their present value using a pre-tax discount rate that reflects the current market assessments of time value and the risks specific to the asset. Reversal of impairment loss is recognized immediately as income in the profit and loss account.

l. Operating Lease Granted:

Lease arrangements where the risk and rewards incident to the ownership of an asset substantially vest with the lessor, are recognized as operating lease. Lease rentals under operating lease are recognized in profit and loss account on a straight-line basis.

m. Accounting for Provisions, 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 an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the Notes to Accounts. Contingent assets are neither recognized nor disclosed in the financial statements.

n. Earnings per Share:

The Basic & Diluted Earnings Per Share (“EPS”) is computed by dividing the net profit after tax for the year by weighted average number of equity shares outstanding during the year.

o. Cane Price:

Purchase of sugarcane for the season is accounted for on an estimated basis as per the Sugarcane price policy announced by the Company. The difference in price is adjusted in the books of accounts in the year the final price is determined by the Company, as and when it crystallizes, and in certain cases at a fixed price as agreed upon.

There is no change in the shares outstanding at the beginning and at the end of the reporting period & immediately preceding reporting period Terms Rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs.50 per share. Each holder of equity share is entitled to one vote per share. The Company declares and pays dividends in Indian Rupees.

The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholder.

Source : Dion Global Solutions Limited
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