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Company Information

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FARMAX INDIA LTD.

02 July 2018 | 12:00

Industry >> Food Processing & Packaging

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ISIN No INE890I01035 BSE Code / NSE Code 590094 / FARMAXIND Book Value (Rs.) -0.22 Face Value 1.00
Bookclosure 30/09/2016 52Week High 0 EPS 0.00 P/E 0.00
Market Cap. 2.67 Cr. 52Week Low 0 P/BV / Div Yield (%) 0.00 / 0.00 Market Lot 1.00
Security Type Other

ACCOUNTING POLICY

You can view the entire text of Accounting Policy of the company for the latest year.
Year End :2015-03 
Basis for preparation of accounts

The accounts have been prepared to comply in all material aspects with applicable accounting principles in India, the applicable Accounting Standards notified under Section 211(3c) of the Companies Act, 1956 and the relevant provisions thereof. All assets and liabilities have been classified as current or non-current as per the Company's normal operating cycle and other criteria set out in Revised Schedule VI to the Companies Act, 1956. Based on the nature of products and the time between acquisition of assets for processing and their realization in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current / non-current classification of assets and liabilities.

Use of Estimates:

The preparation of financial statements in conformity with GAAP requires estimates and assumptions that affect the reported amounts of Assets and Liabilities, revenues and expenses, and related disclosures of contingent liabilities in the financial statements and accompanying notes. Estimates are used for, but not limited to valuation of investments, collect ability of receivables, sales returns, incentive discount offers, valuation of inventory, depreciable lives of fixed assets and valuation of acquired intangibles and goodwill, income taxes, stock based compensation and contingencies. Actual results could differ materially from those estimates.

Fixed Assets and Depreciation

I) Fixed assets are stated at cost less accumulated depreciation and accumulated impairment losses, if any. Subsequent expenditures related to an item of fixed asset are added to its book value only if they increase the future benefits from the existing asset beyond its previously assessed standard of performance. Items of fixed assets that have been retired from active use and are held for disposal are stated at the lower of their book value and net realizable value and are shown separately in the financial statements under Other Current Assets if any. Any expected loss is recognized immediately in the profit and loss account. Losses arising from the retirement of, and gains or losses arising from disposal of fixed assets which are carried at cost are recognized in the profit and loss account if any. ii) Depreciation has been provided under the written down value method at the rates prescribed under Schedule XIV of the Companies Act, 1956. In respect of assets added / assets sold during the year, pro- rata depreciation has been provided at the rates prescribed under Schedule XIV. Depreciation in respect of assets acquired during the year whose cost does not exceed Rs. 5,000/- has been provided at 100%.

Revenue Recognition

i. Sales are recognized when the substantial risks and rewards of ownership in the goods are transferred to the buyer, upon supply of goods, and are recorded net of trade discounts, rebates, sales taxes and excise duties.

ii. Income from services rendered is recognized as the service is performed and is booked based on agreements / arrangements with the concerned parties.

Interest income on Deposits is recognized during the time proportion method, based on interest rates implicit in the transaction.

Expenditure

Expenses are accounted on accrual basis and the Provisions are made for all expected losses and liabilities.

Investments

Investments are classified into current and long term investments. Current investments are stated at the lower of cost and fair value. Long term investments are stated at cost. A provision for diminution is made to recognize a decline, other than temporary, in the value of long term investments. Investments that are readily realizable and are intended to be held for not more than one year from the date, on which such investments are made, are classified as current investments. All other investments are classified as long term investments.

Employee benefits

Disclosure is made as per the requirements of the standard and the same is furnished below:

1. Defined contribution plan

Contribution to provident fund is in the nature of defined contribution plan and is made to EPFO.

2. Defined Benefit Plan

The company doesn't have policy of contribution to Gratuity and Leave encashment. Hence no provision is made in the books.

Foreign Exchange Transactions

a) Foreign currency transactions arising during the year are recorded as per the prescribed foreign exchange rates prevailing on the date of the transaction.

b) Monetary assets and liabilities related to foreign currency transactions remaining unsettled at the end of the year are stated at the contract rates and / or at the transaction Schedule :

Earnings per share

A basic earnings per share is calculated by dividing the net profit for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period and for all periods presented is adjusted for events, such as bonus shares, other than the conversion of potential equity shares that have changed the number of equity shares outstanding, without a corresponding change in resources. For the purpose of calculating diluted earnings per share, the net profit for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares if any.

Inventories

Inventories are valued at the lower of cost, computed on a weighted average basis, and estimated net realizable value, after providing for cost of obsolescence and other anticipated losses, wherever considered necessary. Finished goods and work-in-progress include costs of conversion and other costs incurred in bringing the inventories to their present location and condition.

Impairment of Assets:

At each balance sheet date, the carrying amount of assets is tested for impairment so as to determine

a) The provision for impairment loss, if any, required or

b) The reversal, if any, required for impairment loss recognized in previous periods.

Impairment loss is recognized if the carrying amount an asset exceeds its recoverable amount

Borrowing Costs:

Borrowing Costs that are directly attributable to long term project management and development activities are capitalized as part of the projects cost when the activities that are necessary to prepare the asset for its intended use or sale are in progress. Other borrowing costs are recognized as expenses in profit and loss account in the period in which they are occur.

Income Taxes

Current tax is determined as the amount of tax payable in respect of taxable income for the year. Deferred tax is recognized , subject to the consideration of prudence, on timing differences being differences between taxable income and accounting income, that originate in one period and are capable of reversal in one or more subsequent periods.

Deferred tax assets are not recognized on unabsorbed depreciation and losses unless there is a virtual certainty that sufficient taxable profits will be available against which such deferred tax assets can be realized

Cash and Cash Equivalents

Cash and cash equivalents include cash in hand, demand deposits with banks, other short-term highly liquid investments with original maturities of three months or less.

Leases

Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments under such leases are charged to profit and loss account on a straight line basis over the lease term.

Provisions and Contingent Liabilities

A provision is recognized when there is a present obligation as a result of a past event, it is probable that an outflow of resources will be required to settle the obligation and in respect of which reliable estimate can be made. Provision is not discounted to its present value and is determined based on the best estimate required to settle the obligation at the year end date. These are reviewed at each year end date and adjusted to reflect the best current estimate.

Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non occurrence of one or more uncertain future events not wholly within the control of the company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made.