Accounting Policies of Venus Sugar Ltd. Company

Jun 30, 2010

The Accounts of the company are prepared under the historical cost convention in accordance with the applicable Accounting Standards, except where otherwise stated. For recognition of income and expenses, accrual basis of accounting is followed (Excise Duty payable on un-cleared finished goods has been accounted for in accordance with Accounting Standard (AS -2) issued by The Institute of Chartered Accountants of India).

A. FIXED ASSETS

a) These are valued at cost less depreciation. Cost includes purchase price and other attributable expenses for bringing the assets to their present working condition for the intended use.

b) Depreciation on fixed assets is provided on straight line method in accordance with the rates as specified in Schedule XIV of the Companies Act, 1956, (As Amended). Depreciation on additions to fixed assets during the year is charged on pro rata basis for the period of use.

B. INVENTORIES: Description

i) Raw Material (Sugar Cane) is valued at Cost. ii) Finished Goods:

a) Inventories (other than By-products, Scrap and Standing crop) are valued at Lower of Cost or Net realizable value.

The cost of Inventories is computed on weighted average basis. The cost of Finished goods and Work-in-Process include cost of conversion and other cost incurred in bringing the Inventories to their present location and condition.

b) By-products (Molasses & Bagasse), Scrap and Standing Crop are valued at net realizable value. iii) Stores & spares are valued at Average cost.

iv) Loose Tools & Equipments are valued at Average cost.

C. REVENUE RECOGNITION:

a) Sale is recognized on the basis of dispatch of goods to customers.

b) Sale is taken into account including Excise Duty, & Cess.

D. Insurance claim accounted for on settlement of claim.

E. No provision has been made for taxation in view of the benefits available to the company in terms of the provisions of the Income Tax Act, 1961.

II. CONTINGENT LIABILITIES

a. Claims by or against the Company not acknowledged as debts in respect of pending cases in various Courts of law, relating to Factorys Act and Industrial Dispute Act - approx. amount Rs. 1.04 lacs.

b. Disputed Liability of Rs. 2.00 Lacs, Rs. 0.60 lacs, Rs. 42.94 Lacs & Rs.85.08 Lacs for the year 2001-02, 2002-03, 2003-04 & 2004-05 respectively for Entry Tax on Sale of Sugar.

c. Disputed Liability of Rs. 1.67 lacs for the Year 1998-99 for Trade tax on Ex- Up HSD Purchased and issued to transporters.

d. Disputed Liability of Rs. 4.55 Lacs, Rs. 6.00 Lacs, Rs. 3.64 lacs & Rs. 4.12 Lacs for the Year 2001 -02, 2002-03,2003-04 & 2004-05 for trade tax.

e. Disputed Liability of Rs. 7.73 Rs., 1.71 lacs, Rs. 95.24 lacs, Rs. 1.68 lacs and Rs. 1.74 Lacs respectively for the Years 1995-96,1996-97, 1997-98, 2004- 05 and 2005-06 for excise duty on sale, shortage & excess of molasses

f. Disputed Liability of Rs. 0.34 lacs for the year 2002-03 in respect of various challan of cane centers.

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Jun 30, 2009

The Accounts of the company are prepared under the historical cos: convention in accordance with the applicable Accounting Standards except where otherwise stated For recognition of income and expenses, accrual basis of accounting, is followed (Excise Duty payable on un-cleared finished goods has been accounted for in accordance with Accounting Standard (AS -2) issued by The Institute of Chartered Accountants of India).

A. FIXED ASSETS

a) These are valued at cost less depreciation. Cost includes purchase price and other attributable expenses for bringing the assets to their present working condition for the intended use

b) Depreciation on fixed assets is provided on straight line method in accordance with the rates as specified in Schedule XIV of the Companies Act, 1956. (As Amended). Depreciation on additions to fixed assets during the year is charged on pro rata basis for the period of use.

B. INVENTORIES:

Description

i) Raw Material (Sugar Cane) is valued at Cost.

ii) Finished Goods:

a) Inventories (other than By-products, Scrap and Standing cop) are valued at Lower of Cost or Net realizable value. The cost of Inventories is computed on weighted average basis. The cost of Finished, goods and Work-in-Process include cost of conversion and other cost incurred in bringing the Inventories to their present location and condition.

b) By-products (Molasses & Bagasse), Scrap and Standing Crop are valued at net realizable value.

iii) Stores & spares are valued at Average cost.

iv) Loose Tools & Equipments are valued at Average cost.

C. REVENUE RECOGNITION :

a) Sale is recognized on the basis of dispatch of goods to customers.

b) Sale is taken into account including Excise Duty & Cess.

D. Insurance claim accounted for on settlement of claim.

E. No provision has been made for taxation in view of the benefits available to the company in terms of the provisions of the Income Tax Act, 1961.

II. CONTINGENT LIABILITIES

a. Claims by or against the Company not acknowledged as debts in respect or pending cases in various Courts of law, relating to Factorys Act and Industrial Dispute Act - approx. amount Rs. 1.04 lacs.

b. Disputed Liability of Rs. 2.00 Lacs, Rs. 0.60 lacs, Rs. 42.94 Lacs & Rs.85.08 Lacs for the year 2001-02, 2002-03, 2003-04 & 2004-05 respectively for Entry Tax on Sale of Sugar.

c. Disputed Liability of Rs. 1.67 lacs for the Year 1998-99 for Trade tax on Ex- Up HSD Purchased and issued to transporters.

d. Disputed Liability of Rs. 4.55 Lacs, Rs. 6.00 Lacs, Rs. 3.64 lacs & Rs. 4.12 Lacs for the Year 2001-02, 2002-03, 2003-04 & 2004-05 for trade tax.

e. Disputed Liability of Rs. 7.73Rs., 1.71 lacs, Rs. 95 24 lacs. Rs. 1.68 lacs, 1.74 Lacs & Rs.3.09 Lacs respectively for the Years 1995-96,1996-97, 1997-98, 2004- 05, 2005-06 & 2006-07for excise duty on sale, shortage & excess of molasse-

f. Disputed Liability of Rs. 303.00 lacs for the cane dues of difference of SMP & SAP for the year 2002-03.

g. Disputed Liability of Rs. 0.34 lacs for the year 2002-03 in respect of various challan of cane centers.