Accounting Policies of Hanjer Fibres Ltd. Company

Mar 31, 2012

A) GENERAL

The financial statements have been prepared on the basis of going concern, under the historic cost - convention on accrual basis, to comply in all material aspects with applicable accounting principles in India, the Accounting Standards issued by the Institute of Chartered Accountants of India &nd the relevant provisions of the Companies Act, 1956. The Unit has discontinued its operation from Octobcr 2008. ,

b) FIXED ASSETS

Fixed assets are carried at cost less depreciation. Expenditure which are of a capital nature capitalised at a cost which comprises of purchase price, levies (except CENVAT) and any directly attributable cost of bringing the assets to its working condition for the intended use. Borrowing costs are capitalised during the period of construction of qualifying assets.

c) DEPRECIATION

Depreciation is provided on straight-line basis at the rates prescribes by schedule XIV to the Companies Act, 1956. These rates are applied to the original cost and depreciation has been provided on pro-rata basis with reference to the month of addition/installation /reduction of assets during the year.

d) INVESTMENTS

Investments are valued at cost. -

e) INVENTORIES

Raw materials are valued at lower of cost and net realisable value.

Work in progress is carried at cost. .....

Finished goods are valued at lower of cost and net realisable value.

Packing materials and Stores and Spares are valued at tost.

- FOREIGN CURRENCY TRANSACTIONS

No foreign currency transactions.

First charge on all the movable and immovable assets of the company, present and future subject to prior charge on specified movables in favour of the company's bankers for working facilities, ranking pari passu in favour of MCB/Reliance Asset Reconstruction Company Limited/Typhoon Financial Services Limited for their term loan / term overdraft.

As per the provisions of the Income Tax Act, 1961 the Company has unabsorbed depreciation. As a conservative business policy, the Company has not recognized the same as Deferred Tax Assets

The company has secured an order of the Honourable High Court for arbitration proceedings to be commenced within time limit specified in the said order for the balance disputed insurance claim of Rs. 7,000,000/-. The insurance company's appeal in the matter heard by the larger Bench and decided in favour of the Company. Moreover, there are several Supreme Court judgements to support the contention of the company in the matter. Hence, the company is confident of recovering the balance claim amount with interest.

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Mar 31, 2011

A) GENERAL:

The financial statements have been prepared on the basis of going concern, under the historic cost convention on accrual basis, to comply in all material aspects with applicable accounting principles in India, the Accounting Standards issued by the Institute of Chartered Accountants of India and the relevant provisions of the Companies Act, 1956. the Unit has discontinued its operation from October 2008.

b) FIXED ASSETS:

Fixed assets are carried at cost less depreciation. Expenditure which are of a capital nature capitalised at a cost which comprises of purchase price, levies (except CENVAT) and any directly attributable cost of bringing the assets to its working condition for the intended use. Borrowing costs are capitalised during the period of construction of qualifying assets.

c) DEPRECIATION:

Depreciation is provided on straight-line basis at the rates prescribed by schedule XIV to the Companies Act, 1956. These rates are applied to the original cost and depreciation has been provided on pro-rata basis with reference to the month of addition/installation /reduction of assets during the year.

d) INVESTMENTS:

Investments are valued at cost.

e) INVENTORIES:

Raw materials are valued at lower of cost and net realisable value. Work in progress is carried at cost.

Finished goods are valued at lower of cost and net realisable value. Packing materials and Stores and Spares are valued at cost.

f) FOREIGN CURRENCY TRANSACTIONS: No foreign currency transactions.

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Mar 31, 2010

A) GENERAL:

The financial statements have been prepared on the basis of going concern, under the historic cost convention on accrual basis, to comply in all material aspects with applicable accounting principles in India, the Accounting Standards issued by the Institute of Chartered Accountants of India and the relevant provisions of the Companies Act, 1956. Die Unit has discontinued its operation from October 2008.

b) FIXED ASSETS:

Fixed assets are carried at cost less depreciation. Expenditure which are of a capital nature capitalised at a cost which comprises of purchase price, levies (except CENVAT) and any directly attributable cost of bringing the assets to its working condition for the intended use. Borrowing costs are capitalised during the period of construction of qualifying assets.

c) DEPRECIATION:

Depreciation is provided on straight-line basis at the rates prescribed by schedule XTV to the Companies Act, 1956. These rates are applied to the original cost and depreciation has been provided on pro-rata basis with reference to the month of addition/installation /reduction of assets during the year.

d) INVESTMENTS: Investments are valued at cost.

e) INVENTORIES:

Raw materials are valued at lower of cost and net realisable value. Work in progress is carried at cost.

Finished goods are valued at lower of cost and net realisable value. Packing materials and Stores and Spares are valued at cost.

f) FOREIGN CURRENCY TRANSACTIONS:

No foreign currency transactions.