Accounting Policies of NEPC Agro Foods Ltd. Company

Mar 31, 2014

I) Shareholders holding more than 5%of the equity share capital (face value per share is 10/- each)

ii) Basis of Accounting

a) The accounts are prepared on the basis of historical cost convention and as a going concern in accordance with the generally accepted accounting principles and as per the provisions of the Companies Act, 1956.

b) The Company follows mercantile system of accounting and recognises income and expenditure on accrual basis, except dividend income on Investments, payment of gratuity which is accounted for on cash basis consistently.

iii) Fixed Assets and Depreciation

a) Fixed assets are stated at cost less accumulated depreciation. Cost comprises of capital costs and incidental expenses attributable to bringing the asset to working condition for it''s intended use. Fixed assets acquired under finance lease are accounted as per the Accounting Standard - 19 Leases issued by The Institute of Chartered Accountants of India. Borrowing costs directly attributable to acquisition or construction of those fixed assets which necessarily take a substantial period of time to get ready for their intended use are capitalised.

b) Depreciation is provided on Straight Line Method from the date of Purchase/ Installation/ Putting to use at the rates and in the manner prescribed under the Schedule XIV to the Companies Act, 1956.

iv) Investments

a Long Term:

Long-term investments are carried at cost of acquisition. Provision is made only when in management''s opinion there is a decline, other than temporary, in the carrying value of such investments. Permanent diminution in the book values of long term investments is charged to the Profit and Loss Account. (Also refer Note II.4) b Current:

Current investments are carried at lower of cost and fair value.

v) Inventories

Inventories are valued as under:

Raw Material and Bought out Goods - At the lower of Cost or Net Realisable Value

Finished Goods - At the lower of Cost or Net Realisable Value

Other consumables - At the lower of Cost or Net Realisable Value

vii) Borrowing Costs

Borrowing costs attributable to acquisition, construction or production of qualifying fixed assets are capitalised as part of the cost of such asset. All other borrowing costs are recognised as an expense in the year in which they are incurred.

viii) Retirement Benefits

The Company has not provided for Provident Fund Plan

The Company has not created an Employees'' group gratuity fund under Group Gratuity Assurance Scheme . No other retirement benefits are considered in the accounts. (Refer point 11.8)

ix) Taxation

Income tax comprises of current tax and deferred tax charge or credit. Deferred tax assets/ Liabilities are measured by applying tax rate and tax laws that have been enacted by the Balance sheet date. Deferred tax asset arising on account of unabsorbed depreciation under tax laws is recognised only to the extent there is virtual certainty of its realisation supported by convincingevidence. Deferred Tax assets on account of other timing differences are recognised only to the extent there is reasonable certainty of its realisation. At each Balance Sheet date, the carrying amount of Deferred Taxes is reassessed based on a careful review.

x) Revenue Recognition

Revenue on sales is recognised on dispatch of goods to the Customers. The Sales is disclosed net of Excise Duty and Cess.

xi) Earnings per share

In determining earnings per share, the company considers the net profit after tax and includes the post tax effect of any extraordinary items. The number of shares used in computing basic earnings per share is the weighted average number of shares outstanding during the year. The number of shares used in computing diluted earnings per share comprises the weighted average shares considered for deriving basic earnings per share and also the weighted average number of Equity Shares, which have been subsequently allotted against share application money.

xii) Contingent Liabilities

Contingencies arising from claims, litigation, assessment, fines, penalties, etc are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. However the contingent Liabilities are disclosed by way of notes.

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Mar 31, 2010

I) Basis of Accounting

a) The accounts are prepared on the basis of historical cost convention and as a going concern in accordance with the generally accepted accounting principles and as per the provisions of the Companies Act, 1956.

b)The Company follows mercantile system of accounting and recognises income and expenditure on accrual basis, except dividend income on Investments, payment of gratuity which is accounted for on cash basis consistently.

ii) Fixed Assets and Depreciation

a)Fixed assets are stated at cost less accumulated depreciation. Cost comprises of capital costs and incidental expenses attributable to bringing the asset to working condition for its intended use. Fixed assets acquired under finance lease are accounted as per the Accounting Standard - 19 Leases issued by The Institute of Chartered Accountants of India. Borrowing costs directly attributable to acquisition or construction of those fixed assets which necessarily take a substantial period of time to get ready for their intended use are capitalised.

b)Depreciation is provided on Straight Line Method from the date of Purchase/ Installation/ Putting to use at the rates and in the manner prescribed under the Schedule XIV to the Companies Act, 1956.

iii) Investments

a Long Term:

Long-term investments are caused at cost of acquisition. Provision is made only when in management''s opinion there is a decline, other than temporary, in the caning value of such investments. Permanent diminution in the book values of long term investments is charged to the Profit and Loss Account (Also refer Note II.4) b Current;

Current investments are carried at lower of cost and fair value.

iv) Inventories

Inventories are valued as under:

Raw Material and Bought out Goods - At the lower of Cost or Net Realisable Value

Finished Goods - At the lower of Cost or Net Realisable Value

Other consumables - At the lower of Cost or Net Realisable Value

v) Miscellaneous Expenditure

Preliminary/Share Issue Expenses and Defeired Revenue Expenses incurred during the year are charged to the Profit & Loss Account (Refer Note No.II. 12)

vi) Borrowing Costs

Borrowing costs attributable to acquisition, construction or production of qualifying fixed assets are capitalised as part of the cost of such asset All other borrowing costs are recognised as an expense in the year in which they are incurred.

vii) Retirement Benefits

The Company has provident fund Scheme as per Provident Fund Plan and the contributions are made on monthly basis.

The Company has created an Employees'' group gratuity fund under Group Gratuity Assurance Scheme with the Life Insurance Corporation of India. Gratuity is provided for on the basis of the premium paid on the above policy. No other retirement benefits are considered in the accounts. (Refer Note II.8)

viii) Taxation

Income tax comprises of current tax and deferred tax charge or credit Deferred tax assets/ Liabilities are measured by applying tax rate and tax laws that have been enacted by the Balance sheet date. Deferred tax asset arising on account of unabsorbed depreciation under tax laws is recognised only to the extent there is virtual certainty of its realisation supported by convincing evidence. Deferred Tax assets on account of other timing differences are recognised only to the extent there is reasonable certainty of its realisation. At each Balance Sheet date, the carrying amount of Deferred Taxes is reassessed based on a careful review.

ix) Revenue Recognition

Revenue on sales is recognised on dispatch of goods to the Customers. The Sales is disclosed net of Excise Duty and Cess.

x) Earnings ner share

In determining earnings per share, the company considers the net profit after tax and includes the post tax effect of any extraordinary items. The number of shares used in computing basic earnings per share is the weighted average number of shares outstanding during the year. The number of shares used in computing diluted earnings per share comprises the weighted average shares considered for deriving basic earnings per share and also the weighted average number of Equity Shares, which have been subsequently allotted against share application money.

xi) Contingent Liabilities

Contingencies arising from claims, litigation, assessment fines, penalties, etc are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. However the contingent Liabilities are disclosed by way of notes.

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Mar 31, 2009

I) Basis of Accounting

a) The accounts are prepared on the basis of historical cost convention and as a going concern in accordance with the generally accepted accounting principles and as per the provisions of the Companies Act, 1956.

b)The Company follows mercantile system of accounting and recognises income and expenditure on accrual basis, except dividend income on Investments, payment of gratuity which is accounted for on cash basis consistently.

ii) Fixed Assets and Depreciation

a)Fixed assets are stated at cost less accumulated depreciation. Cost comprises of capital costs and incidental expenses attributable to bringing the asset to working condition for its intended use. Fixed assets acquired under finance lease are accounted as per the Accounting Standard - 19 Leases issued by The Institute of Chartered Accountants of India. Borrowing costs directly attributable to acquisition or construction of those fixed assets which necessarily take a substantial period of time to get ready for their intended use are capitalised.

b)Depreciation is provided on Straight Line Method from the date of Purchase/ Installation/ Putting to use at the rates and in the manner prescribed under the Schedule XIV to the Companies Act, 1956.

iii) Investments

a Long Term:

Long-term investments are carried at cost of acquisition. Provision is made only when in managements opinion there is a decline, other than temporary, in the carrying value of such investments. Permanent diminution in the book values of long term investments is charged to the Profit and Loss Account. (Also refer Note II.4)

b Current:

Current investments are carried at lower of cost and fair value.

iv) Inventories

Inventories are valued as under:

Raw Material and Bought out Goods - At the lower of Cost or Net Realisable Value

Finished Goods - At the lower of Cost or Net Realisable Value

Other consumables - At the lower of Cost or Net Realisable Value

v) Miscellaneous Expenditure

Preliminary/Share Issue Expenses and Deferred Revenue Expenses incurred during the year are charged to the Profit & Loss Account. (Refer Note No.II. 12)

vi) Borrowing Costs

Borrowing costs attributable to acquisition, construction or production of qualifying fixed assets are capitalised as part of the cost of such asset. All other borrowing costs are recognised as an expense in the year in which they are incurred.

vii) Retirement Benefits

The Company has provident fund Scheme as per Provident Fund Plan and the contributions are made on monthly basis.

The Company has created an Employees group gratuity fund under Group Gratuity Assurance Scheme with the Life Insurance Corporation of India. Gratuity is provided for on the basis of the premium paid on the above policy. No other retirement benefits are considered in the accounts. (Refer Note 11.8)

viii) Taxation

Income tax comprises of current tax and deferred tax charge or credit. Deferred tax assets/ Liabilities are measured by applying tax rate and tax laws that have been enacted by the Balance sheet date. Deferred tax asset arising on account of unabsorbed depreciation under tax laws is recognised only to the extent there is virtual certainty of its realisation supported by convincing evidence. Deferred Tax assets on account of other timing differences are recognised only to the extent there is reasonable certainty of its realisation. At each Balance Sheet date, the carrying amount of Deferred Taxes is reassessed based on a careful review.

ix) Revenue Recognition

Revenue on sales is recognised on dispatch of goods to the Customers. The Sales is disclosed net of Excise Duty and Cess.

x) Earnings per share

In determining earnings per share, the company considers the net profit after tax and includes the post tax effect of any extraordinary items. The number of shares used in computing basic earnings per share is the weighted average number of shares outstanding during the year. The number of shares used in computing diluted earnings per share comprises the weighted average shares considered for deriving basic earnings per share and also the weighted average number of Equity Shares, which have been subsequently allotted against share application money.

xi) Contingent Liabilities

Contingencies arising from claims, litigation, assessment, fines, penalties, etc are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. However the contingent Liabilities are disclosed by way of notes.

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Oct 31, 2001

Accounting Conventions and Concepts

a. The Company generally follows the Mercantile System of Accounting recognizing both Income and Expenditure on accrual basis.

b. The accounts are prepared on historical cost basis and as a going concern. Accounting policies not specifically referred to otherwise are consistent with generally accepted accounting principles. .

c. FIXED ASSETS:

Fixed Assets are stated at cost of acquisition less depreciation. The depreciation on Fixed Assets are provided at the rates specified in Schedule XIV of the Companies Act 1956, under Straight Line method on prorata basis.

d. Raw materials are valued at cost. The cost includes incidental expenses such as freight, transport, interest including other relevant overheads. Finished goods are valued at market value or cost whichever is lower. The cost is ascertained on the basis of absorption costing method, including labour and relevant over heads.

e. Revenue expenditure on R & D is charged against the profit in the period in which it is incurred.