Accounting Policies of Indo Bonito Multinational Ltd. Company

Mar 31, 2013

(1) Basis of Preparation of financial statements:-

(i) The financial statements have been prepared under the historical cost convention and in accordance with the generally accepted accounting principles.

(ii) Accounting policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles.

(2) Inflation :

Assets and liabilities are recorded on historical cost to the Company. The costs are not adjusted to reflect the changing value in the purchasing power of money.

(3) Accounting of Income/Expenditure:- All income and expenditure items having a material bearing on the financial statements are recognized on accrual basis except as stated otherwise. However, Dividend Income if any is accounted for on receipt basis. Sales are inclusive of sales tax and revenue is recognized on accrual basis. Sales are inclusive of service charges. In case of export sales, the bills are discounted and the amount realized in rupees is credited to sales account.

(4) Fixed Assets:- Fixed Assets have been carried at historical cost, inclusive of incidental expenses, interest, less accumulated depreciation.

(5) Depreciation:- Depreciation has been provided on Straight Line Method on pro-rate basis at the Rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956.

(6) Inventories :

i) Finished goods are valued at lower of cost or market price.

ii) Raw materials, stores and spare parts are valued at cost.

iii) Cost of inventory is generally on actual acquisition cost based on FIFO method.

(7) Investments:- Investments are valued at cost.

(8) Gratuity/Retirement Benefits:- The Company accounts for gratuity and leave encashment on cash basis. Also none of the employees have completed 5 years of service.

(9) Miscellaneous Expenditure:- Preliminary expenses, public issue expenses and expenses for increasing the Authorised Capital is written off over a period of ten years.

(10) Deferred Tax:- Deferred Tax Asset that was not recognised on consideration of prudence, may be recognised subsequently to the extent that reasonable or virtual certainty has been achieved and also that there will be future taxable income against which it can be realised.

(B) NOTES ON ACCOUNTS:- (1) Previous year''s figures are regrouped, recast and rearranged wherever necessary to make them comparable with those of the current year.

(2) Balances of Sundry Debtors, Sundry Creditors are subject to confirmation, reconciliation and consequent adjustments if any.

(3) In the opinion of the Board, unless otherwise stated in the Balance Sheet and schedules attached thereto, the current assets and loans and advances as stated in the Balance Sheet are approximately of the value realizable in the ordinary course of business and provision for all known liabilities for the year has been made in the books of account of the Company.

(4) Additional information as required under Para-III of Part II of Schedule VI to the Companies Act, 1956 (as certified by the directors and relied by the Auditors).

a) Particulars of Capacity :

1) Licensed Capacity : 285000MT – Dry Mix Plaster – Leased Unit

2) Installed Capacity : 285000MT – Dry Mix Plaster – Leased Unit

3) Licensed Capacity : Not Applicable

4) Installed Capacity : 40000 Blocks Or 80000 Pavers per day based on three shifts working – Bangalore – Leased Unit

However the lease in respect of Dry Mix Plaster unit was cancelled in Dec 2010 and Blocks and Pavers unit w.e.f June 2011.

b) Quantitative details for the year are as under :

During the current year company has dealt in wide range of products i.e. ceramic tiles, building materials, blocks and pavers. Hence quantitative information is not provided in the current year.

c) Value of import calculated on CIF basis by the Company during the year in respect of raw materials, trading goods, components, spare parts and capital goods Rs. Nil (Previous year Rs Nil).

d) Value of all imported/indigenous raw materials, traded goods, stores and spare parts and components consumed (including through canalized agencies) :

i) Raw Materials Rs. Nil (Previous year Rs. Nil)

ii) Stores & Components – Nil (Previous year Rs. Nil)

iii) Traded Goods Rs. Nil (Previous year Rs. Nil)

e) Purchase of traded goods during the year Rs 18,15,93,101/- (Previous year Rs. 4,67,22,903/- )

f) Expenditure/Advances in foreign currency Rs. Nil (Previous year Rs. Nil )

g) FOB value of deemed Export Rs Nil (Previous year Rs. Nil )

(5) Contingent liabilities include

a) Contractual obligations of the company as per the agreements with its sundry debtors Rs Nil (Previous Year Rs Nil)

b) Disputed Income Tax Demand Rs. 34.17 crores (Previous Year Rs. 34.17 crores).

c) Claims not acknowledged as debts Rs 53 crores ( Previous Year Rs 53 crores)

(6) There are no dues outstanding for more than 30 days in respect of transactions with small scale industrial undertakings.

(7) Deferred Taxation :

Deferred Tax Asset that was not recognised on consideration of prudence, may be recognised subsequently to the extent that reasonable or virtual certainty has been achieved and also that there will be future taxable income against which it can be realised.

(8) Interest and financial charges include bank charges, service charges, and bill discounting charges payable and interest on unsecured loans, car loans and interest on packing credit.

(9) Disclosure as required by the AS-18 on Related Party disclosure:

Related Party Disclosures, as required by Accounting Standard 18, "Related Party Disclosures", issued by the Institute of Chartered Accountants of India are given below :

Subsidiary Companies where Nil control exists

Group Companies where Scarlet International Pvt Ltd

common control exists Nestler Commodities Ltd.

Relatives of Key Management Nil Personnel

(13) Unclaimed dividends as on 31/03/2012 for FY 2007-08 is Rs.106,112/- (Rs. 1,06,373/-) and for FY 2008-09 Rs.52,650/- (Rs. 55,216/-) and FY 2009-10 Rs. 488,935/-.

(14) IDBI Bank had cancelled a term loan of Rs 17 crores and cash credit of Rs 3 crores, causing the project of hollow core blocks of Rs 47 crores to be aborted. .Project expense of Rs1912 lacs has not been written off and its relocation possibilities are still being explored.However certain amounts may still have to be written off after incurring relocation costs. Further estimated losses are expected to be Rs 8 to 9 crores on this account.

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Mar 31, 2012

(1) Basis of Preparation of financial statements:-

(i) The financial statements have been prepared under the historical cost convention and in accordance with the generally accepted accounting principles.

(ii) Accounting policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles.

(2) Inflation:

Assets and liabilities are recorded on historical cost to the Company. The costs are not adjusted to reflect the changing value in the purchasing power of money.

(3) Accounting of Incom^Expenditure:-

All income and expenditure items having a material bearing on the financial statements are recognized on accrual basis except as stated otherwise. However, Dividend Income if any is accounted for on receipt basis. Sales are inclusive of sales tax and revenue is recognized on accrual basis. Sales are inclusive of service charges. In case of export sales, the bills are discounted and the amount realized in rupees is credited to sales account

(4) Fixed Assets:-

Fixed Assets have been carried at historical cost, inclusive of incidental expenses, interest, less accumulated depreciation.

(5) Depreciation:-

Depreciation has been provided on Straight Line Method on pro-rate basis at the Rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956.

(6) Inventories:

i) Finished goods are valued at lower of cost or market price.

ii) Raw materials, stores and spare parts are valued at cost.

iii) Cost of inventory is generally on actual acquisition cost based on FIFO method.

(7) Investments:- Investment are valued at cost.

(8) Gratuity/Retirement Benefits:-

The Company accounts for gratuity and leave encashment on cash basis. Also non of the employees have completed 5 years of service.

(9) Miscellaneous Expenditure:-

Preliminary expenses, public issue expenses and expenses for increasing the Authorised Capital is written off over a period of ten years.

(10) Deferred Tax:-

The deferred tax during the year for timing difference is accounted using tax rates that have been enacted. The net difference arising there on is debited to Profit & Loss A/C.

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Mar 31, 2011

(1) Basis of Preparation of financial statements:-

(i) The financial statements have been prepared under the historical cost convention and in accordance with the generally accepted accounting principles.

(ii) Accounting policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles.

(2) Inflation :

Assets and liabilities are recorded on historical cost to the Company. The costs are not adjusted to reflect the changing value in the purchasing power of money.

(3) Accounting of Income/Expenditure:-

All income and expenditure items having a material bearing on the financial statements are recognized on accrual basis except as stated otherwise. However, Dividend Income if any is accounted for on receipt basis. Sales are inclusive of sales tax and revenue is recognized on accrual basis. Sales are inclusive of service charges. In case of export sales, the bills are discounted and the amount realized in rupees is credited to sales account.

(4) Fixed Assets:-

Fixed Assets have been carried at historical cost, inclusive of incidental expenses, interest , less accumulated depreciation.

(5) Depreciation:-

Depreciation has been provided on Straight Line Method on pro-rate basis at the Rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956.

(6) Inventories :

i) Finished goods are valued at lower of cost or market price.

ii) Raw materials, stores and spare parts are valued at cost.

iii) Cost of inventory is generally on actual acquisition cost based on FIFO method.

(7) Investments:-

Investment are valued at cost.

(8) Gratuity/Retirement Benefits:-

The Company accounts for gratuity and leave encashment on cash basis. Also non of the employees have completed 5 years of service.

(9) Miscellaneous Expenditure:-

Preliminary expenses, public issue expenses and expenses for increasing the Authorised Capital is written off over a period of ten years.

(10) Deferred Tax:-

The deferred tax during the year for timing difference is accounted using tax rates that have been enacted. The net difference arising there on is debited to Profit & Loss A/c.

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Mar 31, 2010

(1) Basis of Preparation of financial statements:-

(i) The financial statements have been prepared under the historical cost convention and in accordance with the generally accepted accounting principles.

(ii) Accounting policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles.

(2) Inflation :

Assets and liabilities are recorded on historical cost to the Company. The costs are not adjusted to reflect the changing value in the purchasing power of money.

(3) Accounting of Income/Expenditure:-

All income and expenditure items having a material bearing on the financial statements are recognized on accrual basis except as stated otherwise. However, Dividend Income if any is accounted for on receipt basis. Sales are inclusive of sales tax and revenue is recognized on accrual basis. Sales are inclusive of service charges. In case of export sales, the bills are discounted and the amount realized in rupees is credited to sales account.

(4) Fixed Assets:-

Fixed Assets have been carried at historical cost, inclusive of incidental expenses, interest , less accumulated depreciation.

(5) Depreciation:-

Depreciation has been provided on Straight Line Method on pro-rate basis at the Rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956.

(6) Inventories :

i) Finished goods are valued at lower of cost or market price.

ii) Raw materials, stores and spare parts are valued at cost.

iii) Cost of inventory is generally on actual acquisition cost based on FIFO method.

(7) Investments:-

Investment are valued at cost.

(8) Gratuity/Retirement Benefits:-

The Company accounts for gratuity and leave encashment on cash basis. Also none of the employees have completed 5 years of service.

(9) Miscellaneous Expenditure:-

Preliminary expenses, public issue expenses and expenses for increasing the Authorised Capital is written off over a period of ten years.

(10) Deferred Tax:-

The deferred tax during the year for timing difference is accounted using tax rates that have been enacted. The net difference arising there on is debited to Profit & Loss A/c.