Accounting Policies of Southern Fuel Ltd. Company

Mar 31, 2014

1. BASIS OF ACCOUNTING

a. The financial statements have been prepared under the historical cost convention on Accrual Method of Accounting and on Going Concern basis. The said financial statements comply with the Companies Act 1956 (The Act) and the mandatory Accounting Standards referred to in Section 211(3c) of the Companies Act, 1956 to the extent they are applicable.

b. The accumulated losses of the company as on 31.03.2014 is Rs. 5.17 crores and the net worth of the company has been eroded. However, the financial statements have been prepared on the principles applicable to a going concern in view of the continuous financial support of the holding company.

2. USE OF ESTIMATES

The preparation of financial statements are in conformity with generally accepted accounting principles and requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Difference between actual results and estimates are recognized in the period in which the results are known/ materialized.

3. INVENTORY VALUATION

Raw Material - At Cost

Finished Goods - Cost or Market Price whichever is lower.

4. CASH FLOW STATEMENT

Cash flow statement has been prepared in accordance with the indirect method prescribed in accounting standard 3 issued by the Institute of Chartered Accountants of India.

5. DEPRECIATION

In respect of Fixed Assets, Depreciation is provided under written down value method at the appropriate rates in accordance with schedule XIV of the Companies Act, 1956.

6. REVENUE RECOGNITION

(a) The company generally follows the mercantile system of accounting and recognizes income and expenditure on an accrual basis except those with significant uncertainties.

(b) Current year there is no business transaction and hence the sale of goods is not recognized.

(c) Claims made by the company and those made on the company are recognized in the profit & loss account as and when claims are accepted.

(d) Expenses are accounted for on accrual basis.

(e) Provisions are recognized when a present legal or constructive obligation exists and the payment is probable and can be reliably estimated.

7. FIXED ASSETS

(a) Fixed assets are stated at cost inclusive of interest on borrowings attributable to acquisition of fixed assets less depreciation provided during the year.

(b) Cost comprises purchase price and all direct/ indirect costs incurred to bring the asset to its working condition for its intended use.

(c) Fixed assets taken on lease (Other than land taken on perpetual lease) are not capitalised and annual lease rentals are absorbed in the profit and loss account.

8. FOREIGN CURRENCY TRANSACTIONS

There were no foreign currency transactions made during the year under audit.

9. INVESTMENTS

(a) Long term investments are stated at cost.

(b) Current investments are carried at lower of cost and fair value as on the Balance sheet date.

(c) Provisions for diminution in value of long term investments is made, if the diminution is other than temporary.

10. EMPLOYEE BENEFITS

(a) Payments to defined contribution schemes are charged as expenses as and when incurred.

(b) Termination items are recognized as an expense as and when incurred.

(c) No Provision is considered necessary with regard to Gratuity and Super Annuations benefits as no employee has yet put in qualified period of service for the benefit.

11. BORROWING COSTS

(a) In the absence of any qualifying asset as per AS-16 the borrowing costs are charged off to revenue.

12. EARNINGS PER SHARE

The arriving at the EPS, the company's net profit after tax, computed in terms of the Indian GAAP, is divided by the number of equity shares outstanding on the last day of the reporting period. The EPS thus arrived at is known as 'Basic EPS'.

13. ACCOUNTING FOR TAXES ON INCOME

(a) Current Tax:

Provision for tax is determined in accordance with the current tax laws.

(b) Deferred Tax:

Deferred tax asset has been recognized in the accounts for the year.

14. IMPAIRMENT OF ASSETS:

(a) Impairment loss if any is provided to the extent, the carrying amount of assets exceeds their recoverable amount. Recoverable amount is higher of an asset's net selling price and its value in use. Value in use, estimated periodically, is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life.

15. PROVISIONS. CONTINGENT ASSETS AND CONTINGENT LIABILITIES



(a) 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 outflow of resources.

(b) Contingent liabilities are not recognized but are disclosed in the notes to financial statements. Contingent assets are neither recognized nor disclosed in the financial statements. Provisions, contingent assets and contingent liabilities are reviewed at each balance sheet date and adjusted to reflect the current best estimate.

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Mar 31, 2013

A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1. BASIS OF ACCOUNTING

a) The financial statements have been prepared under the historical cost convention on Accrual Method of Accounting and on Going Concern basis. The said financial statements comply with the Companies Act, 1956 (The Act) and the mandatory - Accounting Standards referred to in Section 211 (3c) of the Companies Act, 1956 to the extent they are applicable.

b) . The accumulated losses of the company as on 31.03.2013 is Rs.4.84 crores and the net worth of the company has been eroded. However the financial statements have been prepared on the principles applicable to a going concern in view of the continuous financial support of the holding company.

2. USE OF ESTIMATES

The preparation of financial statements are in conformity with generally accepted accounting principles and requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Difference between actual results and estimates are recognized in the period in which the results are known/ materialized.

3. INVENTORY VALUATION

Raw Material - At Cost

Finished Goods - Cost or Market Price whichever is lower.

4. CASH FLOW STATEMENT

Cash flow statement has been prepared in accordance with the indirect method prescribed in accounting standard 3 issued by the Institute of Chartered Accountants of India.

5. DEPRECIATION

In respect of Fixed Assets, Depreciation is provided under written down value method at the appropriate rates in accordance with schedule XIV of the Companies Act, 1956.

6. REVENUE RECOGNITION

(a) The company generally follows the mercantile system of accounting and recognizes income and expenditure on an accrual basis except those with significant uncertainties.

(b) The sale of goods is recognized only when the risks and rewards of ownership are passed on to the customers, which is generally on dispatch of goods.

(c) Sales comprise of sales of goods and services, net of discounts and sales.

(d) Claims made by the company and those made on the company are recognized in the profit & loss account as and when claims are accepted.

(e) Expenses are accounted for on accrual basis.

(f) Provisions are recognized when a present legal or constructive obligation exists and the payment is probable and can be reliably estimated.

7. FIXED ASSETS

(a) Fixed assets are stated at cost inclusive of interest on borrowings attributable to acquisition of fixed assets less depreciation provided during the year.

(b) Cost comprises purchase price and all direct/ indirect costs incurred to bring the asset to its working condition for its intended use.

(c) Fixed assets taken on lease (Other than land taken on perpetual lease) are not capitalised and annual lease rentals are absorbed in the profit and loss account.

8. FOREIGN CURRENCY TRANSACTIONS

There were no foreign currency transactions made during the year under audit.

9. INVESTMENTS

(a) Long term investments are stated at cost.

(b) Current investments are carried at lower of cost and fair value as on the Balance sheet date.

(c) Provisions for diminution in value of long term investments is made, if the diminution is other than temporary.

10. EMPLOYEE BENEFITS

(a) Payments to defined contribution schemes are charged as expenses as and when incurred.

(b) Termination items are recognized as an expense as and when incurred.

(c) No Provision is considered necessary with regard to Gratuity and Super Annuations benefits as no employee has yet put in qualified period of service for the benefit.

11. BORROWING COSTS

(a) In the absence of any qualifying asset as per AS-16 the borrowing costs are charged off to revenue.

12. EARNINGS PER SHARE

The arriving at the EPS, the company's net profit after tax; computed in terms of the Indian GAAP, is divided by the number of equity shares outstanding on the last day of the reporting period. The EPS thus arrived at is known as 'Basic EPS'.

13. ACCOUNTING FOR TAXES ON INCOME

(a) Current Tax:

Provision for tax is determined in accordance with the current tax laws.

(bl Deferred Tax:

Deferred tax asset has been recognized in the accounts for the year.

14. IMPAIRMENT OF ASSETS:

(a) Impairment loss if any is provided to the extent, the carrying amount of assets exceeds their recoverable amount. Recoverable amount is higher of an asset's net selling price and its value in use. Value in use, estimated periodically, is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life.

15. PROVISIONS, CONTINGENT ASSETS AND CONTINGENT LIABILITIES

(a) 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 outflow of resources.

(b) Contingent liabilities are not recognized but are disclosed in the notes to financial statements. Contingent assets are neither recognized nor disclosed in the financial statements. Provisions, contingent assets and contingent liabilities are reviewed at each balance sheet date and adjusted to reflect the current best estimate.

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Mar 31, 2012

1. BASIS OF ACCOUNTING

The financial statements have been prepared under the historical cost convention on Accrual Method of Accounting and on Going Concern basis. The said financial statements comply with the Companies Act, 1956 (The Act) and the mandatory Accounting Standards referred to in Section 211(3c) of the Companies Act, 1956 to the extent they are applicable.

2. USE OF ESTIMATES

The preparation of financial statements are in conformity with generally accepted accounting principles and requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Difference between actual results and estimates are recognized in the period in which the results are known/ materialized.

3. INVENTORY VALUATION

Raw Material - At Cost

Finished Goods - Cost or Market Price whichever is lower.

4. CASH FLOW STATEMENT

Cash flow statement has been prepared in accordance with the indirect method prescribed in accounting standard 3 issued by the Institute of Chartered Accountants of India.

5. DEPRECIATION

In respect of Fixed Assets, Depreciation is provided under written down value method at the appropriate rates in accordance with schedule XIV of the Companies Act, 1956.

6. REVENUE RECOGNITION

(a) The company generally follows the mercantile system of accounting and recognizes income and expenditure on an accrual basis except those with significant uncertainties.

(b) The sale of goods is recognized only when the risks and rewards of ownership are passed on to the customers, which is generally on dispatch of goods.

(c) Sales comprise of sales of goods and services, net of discounts and sales.

(d) Claims made by the company and those made on the company are recognized in the profit & loss account as and when claims are accepted.

(e) Expenses are accounted for on accrual basis.

(f) Provisions are recognized when a present legal or constructive obligation exists and the payment is probable and can be reliably estimated.

7. FIXED ASSETS

(a) Fixed assets are stated at cost inclusive of interest on borrowings attributable to acquisition of fixed assets less depreciation provided during the year.

(b) Cost comprises purchase price and all direct/ indirect costs incurred to bring the asset to its working condition for its intended use.

(c) Fixed assets taken on lease (Other than land taken on perpetual lease) are not capitalised and annual lease rentals are absorbed in the profit and loss account.

8. FOREIGN CURRENCY TRANSACTIONS

There were no foreign currency transactions made during the year under audit.

9. INVESTMENTS

(a) Long term investments are stated at cost.

(b) Current investments are carried at lower of cost and fair value as on the Balance sheet date.

(c) Provisions for diminution in value of long term investments is made, if the diminution is other than temporary.

10. EMPLOYEE BENEFITS

(a) Payments to defined contribution schemes are charged as expenses as and when incurred.

(b) Termination items are recognized as an expense as and when incurred.

(c) No Provision is considered necessary with regard to Gratuity and Super Annuations benefits as no employee has yet put in qualified period of service for the benefit.

11.BORROWING COSTS

(a) In the absence of any qualifying asset as per AS-16 the borrowing costs are charged off to revenue.

12. EARNINGS PER SHARE

The arriving at the EPS, the company''s net profit after tax, computed in terms of the Indian GAAP, is divided by the number of equity shares outstanding on the last day of the reporting period. The EPS thus arrived at is known as ''Basic EPS''.

13. ACCOUNTING FOR TAXES ON INCOME

(a) Current Tax:

Provision for tax is determined in accordance with the current tax laws.

(b) Deferred Tax:

Deferred tax asset has been recognized in the accounts for the year.

14. IMPAIRMENT OF ASSETS:

(a) Impairment loss if any is provided to the extent, the carrying amount of assets exceeds their recoverable amount. Recoverable amount is higher of an asset''s net selling price and its value in use. Value in use, estimated periodically, is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life.

15. PROVISIONS, CONTINGENT ASSETS AND CONTINGENT LIABILITIES

(a) 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 outflow of resources.

(b) Contingent liabilities are not recognized but are disclosed in the notes to financial statements. Contingent assets are neither recognized nor disclosed in the financial statements. Provisions, contingent assets and contingent liabilities are reviewed at each balance sheet date and adjusted to reflect the current best estimate.

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Mar 31, 2011

1. BASIS OF ACCOUNTING

The finincail statement have been prepared under the historical cost conventions on Accrual method of a Accounting and on Going concern basis. The said financial statements comply with the Compinies Act,1956 ( the act) and the mandatory Accounting Standards refferd to in section 211 (3c) of the Companies Act,1956 to the extent they are applicable.

2. USE OF ESTIMATES

The preparation of financial statements are in conformity with generally accepted accounting principles and requires estimates and assumptions to be made that affect the reported amounts of assets and liablities on the date of the financial statements and the reported amount of revenues and expenses during the reportig Period.Difference between actual results and estimates are recognised in the period in which the results are Known / materialized.

3. INVENTORY VALUATION

Raw Material - At Cost

Finished - cost or market price which ever is lower.

4. CASH FLOW STATEMENTS

Cash flow statements has been prepared in accordance with the indirect method prescribed in accounting standard 3 issued by the Institue of Chartered Accountants of India.

5. DEPRECTION

In respect of Fixed assets,Depriciation is provided under Written down Value method at the appropriate rates in accordance with Schedule XIV of the Companies Act,1956.

6. REVENUE RECOGNITION

(a) The company generally follows the mervantile system of accounting and recognizes income and expenditure or an accural basis execpt those with significant uncertainties.

(b) The scale of goods is reginised only when the risks and rewards of ownwrship are passed on to the customers, which is generally on dispatch of goods.

(c) Sales comprise of sales of goods and services,net of discounts and sales.

(d) Claims made by the company and those made on the company are recognized in the profit & loss account as and when Claims are accepted.

(e) Expenses are accounted for on basis.

(f) Provisions are recognized when a present legal or constractive obligations exists and the payment is probable and can be reliablity estimated.

7. FIXED ASSESTS

(a) Fixed assests are started at as cost inclisive of interest on borrowing attributable to acquisitions of fixed assets less depreciation provided during the year.

(b) Cost comprises purchase price and all direct / indirect costs incurred to bring the assets to its working condition for its intended use.

(c) Fixed assets taken on lease (other than land taken on perpetual lease) are not capitalised and annual lease rentals are absorbed in the profit and loss account.

8. FOREIGN CURRENCY TRANSACTIONS

There were no foriegn currency transactions made during the year in the audit.

9.INVESTMENTS

(a) Long term investments are stated at cost.

(b) Current investments are carried at lower of cost and fair value as on the Balance sheet date.

(c) Provisions for diminution in value of long term investments is made, if the diminution is other than temporary.

10.RETIREMENT BENEFITS

(a) payments to define contribution scheme are charged as expenses as and when incurred.

(b) Terminations items are recognised as an expenses as and when incurred.

(c) No provision is considered necessary with regard to Gratuity and super Annuations benefits as no employee qualified period of service for the benefit

11. BORROWING COSTS

(a) iIn the absence of any qualifying assets as per AS-16 the borrowing costs of charge off revenue.

12. EARNING OF SHARES

The arriving at the EPS,the company's net profit after tax,computed in terms of indian GAAP,is divide by equtity shares outstanding on the last day of the reporting period,The EPS thus arrived at is Known as 'EPS'.

13. ACCOUNTING FOR TAX ON INCOME

(a) Current Tax:

Provisions of tax is determined in accordance with the current tax laws.

(b) Deferred Tax:

Deffered tax assets has been recognised in the accounts for the year.

14.IMPAIRMENT OF ASSETS:

(a) Imairment loss if any is provided to the extent,the carrying amount of assets exceeds their recoverable amount.Recoverable amount is higher of an asset's net selling price and its value in use.Value in use is estimated periodically,is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life.

15.PROVISION,CONTINGENT ASSETS AND CONTINGENT LIABILITIES

(a) Provision 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 outflow of resoures.

(b) Contingent liabilities are not recognised but are disclosed in the notes to financial statements.Contingent assest are neither recognized nor disclosure in the financial statements. Provisions, contingent assets contingent liabilities are reviewed at each balance sheet dfate adjusted to reflect the current best estimate.

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Mar 31, 2010

1. BASIS OF ACCOUNTING

The financial statements have been prepared under the historical cost convention on Accrual Method of Accounting and on Going Concern basis. The said financial statements comply with the Companies Act, 1956 (The Act) and the mandatory Accounting Standards referred to in Section 211(3c) of the Companies Act, 1956 to the extent they are applicable.

2. USE OF ESTIMATES

The preparation of financial statements are in conformity with generally accepted accounting principles and requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Difference between actual results and estimates are recognized in the period in which the results are known/ materialized.

3. INVENTORY VALUATION

Raw Material - At Cost

Finished Goods - Cost or Market Price whichever is lower.

4. CASH FLOW STATEMENT

Cash flow statement has been prepared in accordance with the indirect method prescribed in accounting standard 3 issued by the Institute of Chartered Accountants of India.

5. DEPRECIATION

In respect of Fixed Assets, Depreciation is provided under written down value method at the appropriate rates in accordance with schedule XIV of the Companies Act, 1956.

6. REVENUE RECOGNITION

(a) The company generally follows the mercantile system of accounting and recognizes income and expenditure on an accrual basis except those with significant uncertainties.

(b) The sale of goods is recognized only when the risks and rewards of ownership are passed on to the customers, which is generally on despatch of goods.

(c) Sales comprise of sales of goods and services, net of discounts and sales.

(d) Claims made by the company and those made on the company are recognized in the profit & loss account as and when claims are accepted.

(e) Expenses are accounted for on accrual basis.

(f) Provisions are recognized when a present legal or constructive obligation exists and the payment is probable and can be reliably estimated.

7. FIXED ASSETS

(a) Fixed assets are stated at cost inclusive of interest on borrowings attributable to acquisition of fixed assets less depreciation provided during the year.

(b) Cost comprises purchase price and all direct / indirect costs incurred to bring the asset to its working condition for its intended use.

(c) Fixed assets taken on lease (Other than land taken on perpetual lease) are not capitalised and annual lease rentals are absorbed in the profit and loss account.

8. FOREIGN CURRENCY TRANSACTIONS

There were no foreign currency transactions made during the year under audit.

9. INVESTMENTS

(a) Long term investments are stated at cost.

(b) Current investments are carried at lower of cost and fair value as on the Balance sheet date.

(c) Provisions for diminution in value of long term investments is made, if the diminution is other than temporary

10. RETIREMENT BENEFITS

(a) Payments to defined contribution schemes are charged as expenses as and when incurred.

(b) Termination items are recognized as an expense as and when incurred.

(c) No Provision is considered necessary with regard to Gratuity and Super Annuations benefits as no employee has yet put in qualified period of service for the benefit.

11. BORROWING COSTS

(a) In the absence of any qualifying asset as per AS-16 the borrowing costs are charged off to revenue.

12. EARNINGS PER SHARE

The arriving at the EPS, the companys net profit after tax, computed in terms of the Indian GAAP, is divided by the number of equity shares outstanding on the last day of the reporting period. The EPS thus arrived at is known as Basic EPS.

13. ACCOUNTING FOR TAXES ON INCOME

(a) Current Tax:

Provision for tax is determined in accordance with the current tax laws.

(b) Deferred Tax:

Deferred tax is recognized for all timing differevces. Deferred tax assets are recognized when considered prudent.

14. IMPAIRMENT OF ASSETS:

(a) Impairment loss if any, is provided to the extent, the carrying amount of assets exceeds their recoverable amount. Recoverable amount is higher of an assets net selling price and its value in use. Value in use, estimated periodically, is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life.

15. PROVISIONS, CONTINGENT ASSETS AND CONTINGENT LIABILITIES

(a) 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 outflow of resources.

(b) Contingent liabilities are not recognized but are disclosed in the notes to financial statements. Contingent assets are neither recognized nor disclosed in the financial statements. Provisions, contingent assets and contingent liabilities are reviewed at each balance sheet date and adjusted to reflect the current best estimate.