Accounting Policies of Prima Agro Ltd. Company

Mar 31, 2024

2.3 SIGNIFICANT ACCOUNTING POLICIES

a. Property, Plant and Equipment

Subsequent to Transition

i. Recognition and measurement: Property, plant and equipment are carried at cost of
acquisition less accumulated depreciation and accumulated impairment loss, if any.
Subsequent expenditure related to an item of fixed asset are added to its book value only
when it is probable that future economic benefits associated with the item will flow to the
Company and the cost of the item can be measured reliably. All repairs and maintenance are
charged to the Statement of Profit and Loss during the financial year in which they are
incurred.

ii. Depreciation: Land is not depreciated. Depreciation of other items of Property, Plant and
Equipment are provided on a written down value basis over the estimated useful life of the
asset or as prescribed in Schedule II to the Companies Act, 2013. Estimated useful life of
items of property, plant and equipment are as follows:

Type of Asset Estimated Useful Life

Building : 30 Years

Plant &Equipment : 15 Years

Furniture &Fixtures : 10 Years

Vehicles (2 wheelers) : 10 Years

Vehicles (Others) : 8 Years

Office Equipment''s : 5 Years

Computer (End User Devices) : 3 Years

Computer (Others) : 6 Years

Cycle : 5 Years

The residual values, useful lives and methods of depreciation of property, plant and

equipment are reviewed at each financial year end and adjusted prospectively, if

appropriate.

Gains and losses on disposals are determined by comparing the sale proceeds with the
carrying amount and are recognized within exceptional items in the Income statement.

b. Biological Asset

Biological Asset includes livestock which is recognized at fair value less cost to sell as per

provisions of Ind AS 41 “Agriculture”.

c. Financial Assets

i. Financial assets at amortized cost - Assets that are held for collection of contractual cash
flows where those cash flows represent solely payments of principal and interest are
measured at amortized cost.

They are presented as current assets, except for those maturing later than 12 months after
the reporting date which are presented as non-current assets. Financial assets at amortized
cost are represented by trade receivables, cash and cash equivalent, employee advances and
other advances.

The Company has fixed deposits held under a bank guarantee of Rs. 13,13,943.00 having
renewal period less than 6 months. Since the management do not intend it to be realized
within 12 months from the Balance Sheet date owing to recurring nature of bank Equity
investments - Investment in associates are stated at cost.

ii. Financials assets at fair value through OCI-Financial assets that are held within a business
model whose objective is achieved by both, selling financial assets and collecting
contractual cash flows that are solely payments of principal and interest, are subsequently
measured at fair value through other comprehensive income. Fair value movements are
recognized in the other comprehensive income (OCI). Interest income measured using the
EIR method and impairment losses, if any are recognized in the Statement of Profit and Loss.
On de-recognition, cumulative gain or loss previously recognized in OCI is reclassified from
the equity to ''other income'' in the Statement of Profit and Loss.

iii. Financial assets at fair value through profit and loss - A financial asset not classified as either
amortized cost or FVOCI, is classified as FVTPL. Such financial assets are measured at fair
value with all changes in fair value, including interest income and dividend income if any,
recognized as ''other income'' in the Statement of Profit and Loss. These include funds
invested in mutual funds.

iv. Impairment of Financial Assets - The Company assesses at each balance sheet date whether
there is objective evidence that a financial asset or a group of financial assets is impaired. A
financial asset or a group of financial assets is impaired and impairment losses are incurred
only if there is objective evidence of impairment as a result of one or more events that
occurred after the initial recognition of the asset (a ''loss event'') and that loss event (or
events) has an impact on the estimated future cash flows of the financial asset or group of
financial assets that can be reliably estimated.

d. Financial Liabilities

i. Initial recognition and measurement

Financial liabilities are recognized when the Company becomes a party to the contractual
provisions of the instrument. Financial liabilities are initially measured at the amortized
cost unless at initial recognition, they are classified as fair value through profit and loss. In
case of trade payables, they are initially recognized at fair value and subsequently, these
liabilities are held at amortized cost, using the effective interest rate method.

ii. Subsequent measurement

Financial liabilities are subsequently measured at amortized cost using the EIR method.
Financial liabilities carried at fair value through profit or loss are measured at fair value
with all changes in fair value recognized in the Statement of Profit and Loss.

iii. De-recognition

A financial liability is derecognized when the obligation specified in the contract is
discharged, cancelled or expires. The difference between the carrying value of the financial
liability and the consideration paid is recognized in Statement of profit and loss.

e. Financial Liabilities- Preference Share Capital

The Company has outstanding Cumulative Redeemable Preference shares of
Rs.6,00,00,000.00. Being redeemable and non-convertible in nature it is classified as
Financial liabilities. They are recognized at issue price instead of amortized cost. The
dividend for the same was not provided from its initial recognition. The entity has not
recognized any financial liabilities with regard to the same.

f. Inventories

Inventories are valued at cost or net realizable value whichever is lower, cost being
determined on First-in First Out (FIFO) method.

g. Employee Benefits

The Company operates various post-employment schemes. Contribution to defined
contribution schemes like Provident Fund (PF) is accounted for on accrual basis. Post
retirement defined benefits (gratuity) as provided by the Company in accordance with
provisions of Income Tax Act 1961.

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Mar 31, 2015

A. Basis for preparation of Financial statements

The Financial statements have been prepared and presented under the historical cost convention on accrual basis of accounting, in accordance with the Accounting Principles generally accepted in India and comply with the mandatory Accounting Standards issued by the Institute of Chartered Accountants of India to the extend applicable and the relevant provisions of the Companies Act, 2013. Except where otherwise stated, the accounting principles have been consistently applied.

B. Use of Estimates

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

C. Fixed Assets

Fixed assets are stated at cost of acquisition or construction less accumulated depreciation. Cost of fixed assets includes freight and other incidental expenditure related to the acquisition and installation of the respective assets. Borrowing cost directly attributable to acquisition or construction of qualifying assets are capitalized as part of the cost of the assets upto the date the asset is ready for the intended use or sale.

D. Depreciation

Depreciation on Fixed Assets is provided on a straight line basis at the rates specified in Schedule II of the Companies Act, 2013.

E. Impairment of Assets

The carrying amount of Fixed Assets are reviewed at each balance sheet date to assess whether they are recorded in excess of their recoverable amounts, and where the carrying values exceeds the estimated recoverable amounts, and assets are written down to their recoverable amount.

F. Investments

Investments (Non-trade) are considered as long term and are stated at cost .

G. Inventories

Inventories are valued at cost or net realizable value, whichever is lower.

H. Revenue Recognition

Revenue from sale of goods is recognized at the point of despatch to the customers net of sales returns. Income from job work and processing charges is recognized on accrual basis.

I. Employees Retirement and other Benefits

i. Provident fund/Pension fund - Contributions to Provident/Pension fund are accounted on Actual basis.

ii. The scheme of Gratuity covers gratuity liability of the employees including past services. The annual premium has been charged to Profit and Loss Account on accrual basis as per Company's own computation.

J. Accounting for Taxes on Income

i. Provision for current tax is made based on the liability computed in accordance with the relevant tax rates and tax laws.

ii. Deferred tax is recognized on all timing differences between accounting income and taxable income for the year, and quantified using the tax rates and laws enacted or subsequently enacted as on the Balance Sheet date.

iii. The deferred tax assets are recognized and carried forward to the extent that there is a reasonable / virtual certainty as the case may be that sufficient taxable income will be available against which such deferred tax assets can be realized.

K. Earnings per Share

In accordance with Accounting Standard (AS-20), 'Earnings per share' issued by the Institute of Chartered Accountants of India, basic and diluted earnings per share is computed using the weighted average number of equity shares outstanding during the period.

L. Accounting for Provisions, Contingent Liabilities and Contingent Assets

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 an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the Note forming parts of accounts. Contingent Assets are neither recognized nor disclosed in the financial statements.

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Mar 31, 2014

A. Basis for preparation of Financial statements

The Financial statements have been prepared and presented under the historical cost convention on accrual basis of accounting, in accordance with the Accounting Principles generally accepted in India and comply with the mandatory Accounting Standards issued by the Institute of Chartered Accountants of India to the extend applicable and the relevant provisions of the Companies Act, 1956. Except where otherwise stated, the accounting principles have been consistently applied.

B. Use of Estimates

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

C. Fixed Assets

Fixed assets are stated at cost of acquisition or construction less accumulated depreciation. Cost of fixed assets includes freight and other incidental expenditure related to the acquisition and installation of the respective assets. Borrowing cost directly attributable to acquisition or construction of qualifying assets are capitalized as part of the cost of the assets upto the date the asset is ready for the intended use or sale.

D. Depreciation

Depreciation on Fixed Assets is provided on a straight line basis at the rates specified in Schedule XIV of the Companies Act, 1956.

E. Impairment of Assets

The carrying amount of Fixed Assets are reviewed at each balance sheet date to assess whether they are recorded in excess of their recoverable amounts, and where the carrying values exceeds the estimated recoverable amounts, and assets are written down to their recoverable amount.

F. Investments

Investments (Non-trade) are considered as long term and are stated at cost.

G. Inventories

Inventories are valued at cost or net realizable value, whichever is lower.

H. Revenue Recognition

Revenue from sale of goods is recognized at the point of despatch to the customers net of sales returns. Income from job work and processing charges is recognized on accrual basis.

I. Employees Retirement and other Benefits

i. Provident fund/Pension fund - Contributions to Provident/Pension fund are accounted on Actual basis.

ii. The scheme of Gratuity covers gratuity liability of the employees including past services. The annual premium has been charged to Profit and Loss Account on accrual basis as per Company''s own computation.

J. Accounting for Taxes on Income

i. Provision for current tax is made based on the liability computed in accordance with the relevant tax rates and tax laws.

ii. Deferred tax is recognized on all timing differences between accounting income and taxable income for the year, and quantified using the tax rates and laws enacted or subsequently enacted as on the Balance Sheet date.

iii. The deferred tax assets are recognized and carried forward to the extent that there is a reasonable / virtual certainty as the case may be that sufficient taxable income will be available against which such deferred tax assets can be realized.

K. Earnings per Share

In accordance with Accounting Standard (AS-20),'' Earnings per share'' issued by the Institute of Chartered Accountants of India, basic and diluted earnings per share is computed using the weighted average number of equity shares outstanding during the period.

L. Accounting for Provisions. Contingent Liabilities and Contingent Assets

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 an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the Notes forming parts of accounts. Contingent Assets are neither recognized nor disclosed in the f inancial statements.

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Mar 31, 2013

A. Basis for preparation of Financial statements

The Financial statements have been prepared and presented under the historical cost convention on accrual basis of accounting, in accordance with the Accounting Principles generally accepted in India and comply with the mandatory Accounting Standards issued by the Institute of Chartered Accountants of India to the extend applicable and the relevant provisions of the Companies Act, 1956. Except where otherwise stated, the accounting principles have been consistently applied.

B. Use of Estimates.

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

C. Fixed Assets:

Fixed assets are stated at cost of acquisition or construction less accumulated depreciation. Cost of fixed assets includes freight and other incidental expenditure related to the acquisition and installation of the respective assets. Borrowing cost directly attributable to acquisition or construction of qualifying assets are capitalized as part of the cost of the assets upto the date the asset is ready for the intended use or sale.

D. Depreciation

Depreciation on Fixed Assets is provided on a straight line basis at the rates specified in Schedule XIV of the Companies Act, 1956.

E. Impairment of Assets:

The carrying amount of Fixed Assets are reviewed at each balance sheet date to assess whether they are recorded in excess of their recoverable amounts, and where the carrying values exceeds the estimated recoverable amounts, and assets are written down to their recoverable amount.

F. Investments

Investments (Non-trade) are considered as long term and are stated at cost.

G. Inventories:

Inventories are valued at cost or net realizable value, whichever is lower.

H. Revenue Recognition

Revenue from sale of goods is recognized at the point of despatch to the customers net of sales returns. Income from job work and processing charges is recognized on accrual basis.

I. Employees Retirement and other Benefits

i. Provident fund/Pension fund – Contributions to Provident/Pension fund are accounted on Actual basis. ii. The scheme of Gratuity covers gratuity liability of the employees including past services. The annual premium has been charged to Profit and Loss Account on accrual basis as per Company''s own computation.

J. Accounting for Taxes on Income

i. Provision for current tax is made based on the liability computed in accordance with the relevant tax rates and tax laws.

ii. Deferred tax is recognized on all timing differences between accounting income and taxable income for the year, and quantified using the tax rates and laws enacted or subsequently enacted as on the Balance Sheet date.

iii. The deferred tax assets are recognized and carried forward to the extent that there is a reasonable / virtual certainty as the case may be that sufficient taxable income will be available against which such deferred tax assets can be realized.

K. Earnings per Share

In accordance with Accounting Standard (AS-20), ''Earnings per share'' issued by the Institute of Chartered Accountants of India, basic and diluted earnings per share is computed using the weighted average number of equity shares outstanding during the period.

L. Accounting for Provisions, Contingent Liabilities and Contingent Assets

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 an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the Notes forming parts of accounts. Contingent Assets are neither recognized nor disclosed in the financial statements.

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Mar 31, 2012

A. Basis for preparation of Financial statements

The Financial statements have been prepared and presented under the historical cost convention on accrual basis of accounting, in accordance with the Accounting Principles generally accepted in India and comply with the mandatory Accounting Standards issued by the Institute of Chartered Accountants of India to the extend applicable and the relevant provisions of the Companies Act, 1966. Except where otherwise stated, the accounting principles have been consistently applied.

B. Use of Estimates.

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

C. Fixed Assets:

Fixed assets are stated at cost of acquisition or construction less accumulated depreciation. Cost of fixed assets includes freight and other incidental expenditure related to the acquisition and installation of the respective assets. Borrowing cost, directly attributable to acquisition or construction of qualifying assets are capitalized as part of the cost of the assets upto the date the asset is ready for the intended use or sale.

D. Depreciation Rs.

Depreciation on Fixed Assets is provided on a straight line basis at the rates specified in Schedule XIV of the Companies Act 1956.

E. Impairment of Assets:

The carrying amount of Fixed Assets are reviewed at each balance sheet date to assess whether they" " are recorded in excess of their recoverable amounts, and where the carrying values exceeds the estimated recoverable amounts, and assets are written down to their recoverable amount.

F. Investments

Investments (Non-trade) are considered as long term and are stated at cost.

G. Inventories:

Inventories are valued at cost or net realizable value, whichever is lower.

H. Revenue Recognition

Revenue from sale of goods is recognized at the point of despatch to the customers net of sales returns. Income from job work and processing charges is recognized on accrual basis. Insurance claim is recognized on realization basis.

I. Employees Retirement and other Benefits

i. Provident fund/Pension fund - Contributions to Provident/Pension fund are accounted on Actual basis. ii. The scheme of Gratuity covers gratuity liability of the employees including past services. The annual premium has been charged to Profit and Loss Account on accrual basis as per Company's own computation.

J. Accounting for Taxes on Income

i. Provision for current tax is made based on the liability computed in accordance with the relevant tax rates and tax laws.

ii. Deferred tax is recognized on all timing differences between accounting income and taxable income for the year, and quantified using the tax rates and laws enacted or subsequently enacted as on the Balance Sheet date.

iii. The deferred tax assets are recognized and carried forward to the extent that there is a reasonable / virtual certainty as the case may be that sufficient taxable income will be available against which such deferred tax assets can be realized.

K. Earnings per Share

In accordance with Accounting Standard (AS-20), "Earnings per share' issued by the Institute of Chartered Accountants of India, basic and diluted earnings per share is computed using the weighted average number of equity shares outstanding during the period.

L. Accounting for Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result pf past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the Notes forming parts of accounts. Contingent Assets are neither recognized nor disclosed in the financial statements.

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Mar 31, 2010

A. Basis for preparation of Financial statements

The Financial statements have been prepared and presented under the historical cost convention on accrual basis of accounting, in accordance with the Accounting Principles generally accepted in India and comply with the mandatory Accounting Standards issued by the Institute of Chartered Accountants of India to the extend applicable and the relevant provisions of the Companies Act, 1956. Except where otherwise stated, the accounting principles have been consistently applied.

B. Use of Estimates.

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

C. Fixed Assets:

Fixed assets are stated at cost of acquisition or construction less accumulated depreciation. Cost of fixed assets includes freight and other incidental expenditure related to the acquisition and installation of the respective assets. Borrowing cost directly attributable to acquisition or construction of qualifying assets are capitalized as part of the cost of the assets upto the date the asset is ready for the intended use or sale.

D. Depreciation

Depreciation on Fixed Assets is provided on a straight line basis at the rates specified in Schedule XIV of the Companies Act, 1956.

E. Impairment of Assets:

The carrying amount of Fixed Assets are reviewed at each balance sheet date to assess whether they are recorded in excess of their recoverable amounts, and where the carrying values exceeds the estimated recoverable amounts, and assets are written down to their recoverable amount.

F. Investments

Investments (Non-trade) are considered as long term and are stated at cost.

G. Inventories:

Inventories are valued at cost or net realizable value, whichever is lower.

H. Revenue Recognition

Revenue from sale of goods is recognized at the point of despatch to the customers net of sales returns. Income from processing is recognized on accrual basis. Insurance claim is recognized on realization basis.

I. Employees Retirement and other Benefits

i. Provident fund/Pension fund - Contributions to Provident/Pension fund are accounted on Actual basis. ii. The scheme of Gratuity covers gratuity liability of the employees including past services. The annual premium has been charged to Profit and Loss Account on accrual basis as per Companys own computation.

J. Accounting for Taxes on Income

i. Provision for current tax has not been made due to unabsorbed depreciation and carry forward business loss. ii. There was no material deferred tax liability at the beginning of the year as the timing differences, if any, were absorbed earlier to that date. Same is the case for the current year. Deferred tax asset is not created as a measure of prudence.

K. Earnings per Share

In accordance with Accounting Standard (AS-20), Earnings per share issued by the Institute of Chartered Accountants of India, basic and diluted earnings per share is computed using the weighted average number of equity shares outstanding during the period.

L. Accounting for Provisions, Contingent Liabilities and Contingent Assets

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 an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the Notes forming parts of accounts. Contingent Assets are neither recognized nor disclosed in the financial statements.