Accounting Policies of Milk Specialities Ltd. Company

Mar 31, 2012

A. Basis of Preparation of Financial Statements

The Financial statements are prepared under the historical cost convention, in accordance with the generally accepted principles in India and the provisions of the Companies Act, 1956.

B. Use of Estimates

The preparation of financial statements requires estimates and assumptions to be made thal affect the reported amount of assets and liabilities on the date of the financial statements anc the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognised in the period in which the results are known/materialised.

C. Fixed Assets *

Fixed Assets are started at cost. Depreciation is provided on straight Line Method in accordance with the provisions of Schedule XIV to The Companies Act, 1956 exept that no depreciation is provided on freehold land. Depreciation is charged on pro-rata basis on assets Capitalised Sold/ Disposed off/ Dismantled during the year.

D. Impairment of Assets

An asset is treated as impaired when the carrying cost of asset exceeds its recoverable cost as impairment loss is charged to the Profit and Loss Account in the year in which impairment is identified.

E. Inventories

Raw Material, Work in Progress and Consumable, Packing Material Store/ Spares (including Capital Stores) are valued at or under cost. Finished products are valued at cost or market value whichever is lower.

F. Revenue Recognisation

Revenue is recognised only when it can be reliably measured and it is reasonable to expect ultimate collection.

G. System of Accounting

The accounts have been prepared on the basis of Mercantile System. All retirement benefits including leave encashment & gruatuity etc. is accounted for in the books on actual payment basis.

H. Provisions, Contigent Liabilities and Contigent Assets.

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contigent Liabilities are not recognised but are disclosed in the notes. Contingent assets are neither recognised nor disclosed in the financial statements.

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Mar 31, 2010

1. FIXED ASSETS

Fixed assets are stated at Cost. Depreciation is provided on straight Line Method in accordance with the provisions of Schedule XIV to The Companies Act, 1956 except that no depreciation is provided on freehold land. Depreciation is charged on pro-rata basis on assets Capitalized/Sold/Disposed off/Dismantled during the year.

2. INVENTORIES

Raw Material, Work in Progress and Consumable, Packing Material Stores/ Spares (including Capital Stores) are valued at or under cost. Finished products are valued at cost or market value whichever is lower.

3. SYSTEM OF ACCOUNTING

The accounts have been prepared on the basis of Mercantile System. All retirement benefits including leave encashment & gratuity etc. is accounted for in the books on actual payment basis.

4. IMPAIRMENT OF ASSETS

An asset is treated as Impaired when the carrying cost of the asset exceeds its recoverable cost as impairment loss and is charged to profit and loss account in the year which impairment is identified.